Kodagu’s first Agri Company – by farmers, for farmers

Selling branded agricultural products is now no longer the marketing preserve of MNC’s and huge Indian FMCGgiants like Patanjali. Both the Central and State governments have, through their farmer welfare schemes, provided an enabling mechanism to the ordinary famer to build their own brands. Indresh Coovercolly has more.

The Government of India under its RashtriyaKrishivikasYojana and the state government through its comprehensive horticulture development scheme provides all necessary support to establish acompany, process, packageand marketits products too. It is with this supportive structure that the Sri Bhagandeshwara horticulture farmers Producers Company (SBHFPC), limited was established two years ago – a first of its kindagricultural produce Company in the district of Kodagu.

A few progressive farmers of Bhagamandalawhich is just 10 kms from Talacauvery and 35 kms from Madikeri, the capital of the Kodagu district decided to start a Farmers Producers Organisation(FPO). It was a marathon but determined effort to bring together 1000 members for the FPO. They formed 52 farmers groups consisting of 20 farmers each. All the groups together formed the FPO whichnow has 1040 members with a share capital of Rs:10,40,000. The union and state governments provided Rs 15 lakhs towards working capital and Rs 25 lakhs for purchase of machinery. The government has even provided the salary for a CEO, (an MBA graduate) of the company and 4 resource persons forthree years according to information provided by the Company.

SBHFPC President, Hosur Satish told Karnataka Today, that it was very difficult to convince farmers to subscribe to the share capital of the Company. “They asked a lot of questions on the benefits of shareholding. However the progressive youth of the community came forward to convince them. It took a long time to get the minimum shareholders required to set up the FPO” he added.

SBHFPC is a registered Company under the Companies Act. It recorded a net profit of Rs: 4.36 lakhs in its first year of operation. However there may not be any dividend payout this year as it is still a start up the Satish said.

Interestingly, though the government provides financial assistance, the management is completely in the hands of the farmers themselves. The Bhagandeshwara FPO at present produces packaged and branded coconut oil, cardamom, coffee, honey and pepper and markets it both within and outside the state. The Company has grown in stature since its start and is now looking for additional office and godown space. They sell their products through the other FPO’s in the state.Satish said that the Company aims to provide a comprehensive package to its members to enable them enhance productivity. To this end the Company provides its shareholders with tillers, tractors, weed cutters and sprayers on a hire basis at 10% discount on the normal rental which the president says is otherwise too, reasonable.

ChakkraPramod, Assistant Director of Horticulture, Karnataka Govt. told Karnataka Today that the government would also provide 90 percent subsidy for constructing of the godown. He added, “the main aim of establishing a farmers company is to provide better price for the farmers produce and facilitate direct sales to consumers.”

Indian Society of Agribusiness Professionals (ISAP) a non-government, non-profit organisation working since 2001 for the empowerment of rural India through sustainable farm and non-farm livelihood development (http://www.isapindia.org/ Indian societies) is working as a nodal agency and monitoring the production and marketing activities.

According to sources at present 58 such companies operate in Karnataka of which SBHFPC finds itself at the number two position. SBHFPC’s President, speaking on the Company’s future plans said, “the Company is facing an acute shortage of office and godown space. It is planning to buy half an acre of land in Bhagamandala to construct its own office and godown building.We have enough money to purchase the land and for building construction, we understand the government will provide 90 percent subsidy. The Company plans to install machinery to manufacture coconut oil on a large scale here. It also plans to expand its retail network throughout the state starting with Mysuru and Bengaluru”.


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