Will the market economy prevail over the political economy in FPO movement? 


Even as politicians in Maharashtra form FPOs (farmer producer organisations) in the names of their henchmen, farmers and organisations active in the FPO movement say such organisations promoted by politicians will not sustain as the market economy will dominate the political economy in this movement.  

“Leaders across party lines are into FPO formation in the names of their party workers. FPOs are being set up with an eye on securing contracts to procure commodities for government agencies. In fact, traders and politicians have joined hands to hijack the movement,” says Seema Narode, leader of the Shetkari Sanghatana, the apex body of farmers in the state.

Ifran Sheikh, Director of Sahyadri Balaghat FPC, says politicians are encouraging their supporters to form FPOs to start procurement centres and receive subsidies from the government. “The majority of party workers are unaware of FPO rules and regulations. Also, these FPOs are not going to sustain. Beed district has 350 FPOs, only three or four of which are doing good business,” he said. He added that FPOs with clear objectives and market orientation will sustain   

Political economy 

The Managing Director of MahaFPC, a consortium of farmer-producer companies in Maharashtra, Yogesh Thorat, says politicians are trying to use FPOs as a tool to mobilise support. “But I think the market economy will dominate the political economy. Political exploitation is possible if you do business with the government, and it is not possible in a commodity-specific value chain. Now, the government’s role is restricted as a regulator,” said Thorat. He added that FPOs that are competitive will survive and sustain.   

Farmer Ashok Jadhav from Sangli says that politicians, having ruined the cooperative movement, are now encroaching on the FPO space. “Politicos fear that if farmers form their own company and start doing business, they will not listen to them. Farmers’ dependency is important for politicians. Farmers must not allow politicians to destroy the FPO movement,” he said.    

According to the Centre’s guidelines, FPOs are to be developed in clusters. Agricultural and horticultural produce is grown and cultivated to leverage economies of scale and improve market access for members.

Implementing agencies, which are responsible for formation and promotion of FPOs, further engage cluster-based business organisations (CBBOs) to form and provide professional handholding support to FPOs for a period of five years.

So far, 8,716 produce clusters have been allocated to IAs for the formation of FPOs, of which a total of 3,179 FPOs have been registered across the States. About 569 FPOs have been formed in Maharashtra till March 2022. 

Published on

August 22, 2022

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