Farmers Producers Organizations in Bihar: An Overvierw

R K P Singh

Former advisor, State Farmers Commission, Bihar

Bihar had over 161 lakh farm holdings as per the Agricultural Census, 2011. Of this, about 147 lakh were marginal farm holdings i.e. having individual operational land holding of less than 1 hectare while another about 10 lakh were small farm holdings with individual operational land holding size less than 2 hectares. Therefore, the marginal and small farm holdings together accounted for a whopping 96.60 percent of the total farm holdings in Bihar in 2010-11. However, their share in the state’s total operated area was 76 percent.

Average size of operational land holding of each farm varied from 0.25 hectare in the case of the marginal farm holdings 1.25 hectares for small farm holdings to 15 hectares in the case of the large farm holdings, which worked out to 0.39 hectare for all farm holding categories taken together. Such is the predominance of marginal and small farms in Bihar agriculture. As per estimates, about 3 lakh new marginal farms are being added every year due to continued division   of farm holdings.

Being small farms they have natural disadvantage to achieve scale to justify high investment. Limited investment capacity of these small farms is also an area of great concern. Access to critical inputs such as quality seeds, fertilizers, irrigation water, power and institutional credit have created a hugely disabling environment for the small farms.

Most farms do not have access to consumer market and, therefore, are forced to sell their produce to the numerous intermediaries operate in rural area. This reduces their profit margin, making the farming business, in most cases, a non-viable one.

Therefore, at one hand, we have ever increasing prices of agricultural inputs, and on the other, profit margin of the farms are not increasing proportionately, leading to a situation of crisis where the small farms struggle to survive. The agricultural sector needs an urgent overhaul of governance to ensure agricultural growth keeps pace with the overall growth of the economy, guarantee food, particularly the weaker section of society and assure enhanced livelihood for the people engaged in farming.

As the small farms struggle to get access to inputs, market and credit they need a level playing field to be able to compete with other market players in equal terms. Due to factors beyond their control and absence of institutions to safeguard their interests, they are unable to integrate with the agricultural value chains, fight the risks and vulnerabilities such as commodity price volatility, crop failure, insect pest-attacks, natural calamities etc. on their own. Considering the legal environment and political sensitivity of the agricultural sector, there is a gradual recognition that one of the ways to overcome the challenges as described above, could be to collectivize the farmers into Producer Organizations (POs) - be they are producer companies, cooperatives or, any other form. The approach is Considered to be helpful in integrating the farmers directly, through producer companies to market, for both, inputs and output.

Presently , there are   more than 100 FPOs in Bihar which are sponsored by NABARD and these FPOs are working under guidance of different NGOs. JEEVIKA is a semi- govt. organization which also organized four FPOs in Bihar. Membership of FPOs varies from about 300 to more than three thousand however, some of FPOs reported that they are making efforts to increase number of members in the next year. While interacting with members of various FPOS for getting first hand information about their functioning we found a registered FPO in Bihar whose members even do not know that they are members of any FPO, indicating nothing is done after organizing FPO.

FPOs of Bihar are dealing with various agricultural commodities for marketing and some of them are engaged in arranging fertilizer, seeds and arranging training programme also with the help on line department and KVKs. The majority of FPOS located in Nalanda district are engaged in marketing of vegetables including potato and onion but the level is still very low. In 2016-17 one of FPOs of Nalanda district could arrange marketing of only 1230 MT of potato and 150 MT of onion but the FPO is planning to take this activity at larger scale.

The most of FPOs located in Muzaffarpur district are engaged in marketing of Litchi, mango and Green Gram. This activity was started in the last year and they are trying to link the fruits and vegetable marketing with BIG BAZAR which will help increasing the production and marketing of fruits and vegetables in the hinterland of these FPOs.

Winter maize has emerged as an important commercial crop in north Bihar and its further expansion depends on efficient marketing of the crop. Almost all FPOs of north Bihar, are concentrated their efforts to marketing of maize.

The most of FPOs have office and modest furniture and infrastructure however some of them do not have even office and working from residence of one of officials of FPO.FPOs of Bihar is ,no doubt, at infant stage and they lack institutional support and technical advice. Most of FPOs are organized but left uncared and working with low level activity. FPOs sponsored by Jeevika and some NGOs are either doing well or trying to do something.

FPOs are also unaware about proper market to sell their output and take remunerative price. There is a wide price variation between the rural and urban areas. However many small and marginal farmers find it easier to sell in the village haat. Lack of basic infrastructure is another bottleneck of FPOs. The existing FPOs of Bihar has involved in business activities but they are facing a problem of storage for even short time due to non- availability of warehousing. Delay in issuance of input license also affecting the business of the FPOs.

They lack of leadership initiative to run the FPOs in professional manner. FPO requires an external agent to train their directors and chairmen in professional manner. There is an urgent need to have strong Farmer Producer Organizations working closely with market to safeguard the interest of the small and marginal farmers. If the state government fails to strengthen the FPOs in the infant stage it will lose opportunity to develop rural sector through this institutional innovation



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