The Centre’s latest plan to promote Farmer Producer Organisations (FPOs) aims to help small farmers by increasing their incomes. Critically Analyse (200 Words)
Refer - Business Line
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IAS Parliament 4 years
KEY POINTS
· The Centre’s latest plan to promote 10,000 new Farmer Producer Organisations (FPOs) by 2023-24 is well intended as it aims to help small farmers reap benefits of collective selling.
· Also, the new policy places needless emphasis on building cluster-based, single-commodity FPOs, which will introduce risks of monoculture. The policy also ignores the role of ground-level institutions in mobilising FPOs. The success of the SHG movements can be attributed to the work of the localised resource institutions.
· Also, an institution needs AAA rating to be eligible to lend to FPOs. This means NBFCs specialising in agri-credit are out of the ambit. Demanding credit ratings from the lender doesn’t make sense at all; it is the borrower’s credit position that can be vulnerable.
· The new FPO policy promotes the concept of ‘one-district, one-product’ in order to encourage product specialisation. This can impact the Centre’s objective of increasing farmers’ income. The concept will result in monoculture upsetting the ecosystem and making plants less resistant to climate change.
· These practices will see the soil lose fertility resulting in higher usage of chemical supplements, adding to the cost of farming. Single-commodity FPOs have been a limited success across the country, with the exception of Amul in milk. In India, farmers usually sow at least two crops a year.
· The new policy is silent on funds for infrastructure building at the FPO level. While it promises funds for running the FPO and in staff pay, it has failed to link the Agriculture Infrastructure Fund (AIF) to FPOs.
