Study Report on

“Learnings and experience of FPOs’ in

Exports”

Prepared by the
National Short-term Expert
Mr. Sunil Kumar
on behalf of the German project implementation
consortium of

January, 2022

Learning and experience of FPOs in export 0

Learning and experience of FPOs in export 1
Contents
Executive Summary................................................................................................................................. 4
1. FPOs background and status in India .............................................................................................. 6
2. Learning and experience of FPOs’ in export – Objectives and approach ....................................... 8
Approach and Methodology - ............................................................................................................. 9
Limitation of the study – ..................................................................................................................... 9
3. India’s agricultural export ............................................................................................................. 10
Agricultural Exports to European Countries ..................................................................................... 11
4. Findings and Observations ............................................................................................................ 13
Uttar Pradesh - .................................................................................................................................. 13
Interaction with the FPCs -............................................................................................................ 13
APEDA - ......................................................................................................................................... 15
Other stakeholders –..................................................................................................................... 16
Maharashtra –................................................................................................................................... 18
Farmers Producer Organisations (FPOs) – .................................................................................... 19
Visit to Orange Export Facility Centre (Warud) –.......................................................................... 20
Maharashtra State Agricultural Marketing Board (MSAMB) – ..................................................... 21
Interaction with Private entrepreneur and Exporters – ............................................................... 22
Tamil Nadu – ..................................................................................................................................... 22
Farmers’ Producer Organisations (FPOs)- ..................................................................................... 22
APEDA (Chennai) – ........................................................................................................................ 24
Tiruchirappalli Agribusiness Incubation Forum (TABIF)– .............................................................. 24
Conclusion: ........................................................................................................................................ 25
Drivers for getting into export: ..................................................................................................... 25
Barriers for FPOs to get into exports: ........................................................................................... 26
5. Challenges and key learnings ........................................................................................................ 27
Charting a new course – a case of exporting Mango to United Kingdom by GujPro –..................... 33
Taking exports to a new hight – a case of Sahyadri Farmers Producer Company: ........................... 34
6. Recommendations and way forward ............................................................................................ 36
Strategic Approach for FPOs export capacity building – .................................................................. 38
Specific recommendations for strengthening of FPOs for exports to Europe – ............................... 38
A. Shortlisting and selection of FPOs - ...................................................................................... 38
B. Recommendation on Operational interventions - ................................................................ 39
C. Recommendation on Institutional interventions - ............................................................... 41
Annexures ............................................................................................................................................. 45
Annexure: 1 – List of stakeholders approached for the study .......................................................... 45

Learning and experience of FPOs in export 2

 Annexure: 2 – Some of the important schemes for FPOs in India .................................................... 46
Annexure: 3 - List of MSAMB’s Export Facility Centres: ................................................................... 51
Annexure: 4 - Highlights of procedure of export of Chilli (activities at Packhouse) (Reference :
www.apeda.gov.in ) .......................................................................................................................... 52
Annexure: 5 – Brief description of discussion with the FPCs ............................................................ 53

Learning and experience of FPOs in export 3

Executive Summary
In India, Farmers’ Producer Organisations (FPOs) in various collective institutional forms, be it
cooperatives, producer companies (FPCs) or any other forms are being promoted on the principle of
aggregation with objectives of increased income and better participation in value chains. Traditionally,
in India, there have been farmers’ cooperative at the primary level and have been active in all the
areas of production, marketing, credit, and allied activities across the sectors (including handloom,
artisan etc.) in rural India. It has also been highlighted that the cooperatives have reach to almost
100% of India’s villages and have covered 80% of rural population. To facilitate the formation of FPCs
and for registration, the Companies Act 1956 was amended appropriately in 2003 (amendment of
Section 581). The FPCs are seen as a hybrid of cooperatives and of private limited company. There are
over 7900 registered FPCs (till 2020) in India.
The Indo-German Cooperation on Agricultural Market Development project is a part of bilateral
cooperation programme of Federal Ministry of Food and Agriculture (BMEL), Germany and is intended
to contribute to the sustainable economic growth of India’s agricultural sector and improve livelihoods
in rural regions through modernising agricultural markets. As part of this project, one key result area
is to integrate Farmers Producer Organisations (FPOs) into a sustainable and market-based value
chains. For this, it is imperative to identify the key learnings, drivers, and barriers that the Farmer’s
Producer Organizations (FPOs) have experienced in agricultural produce exports by compiling
empirical evidence and developing suitable strategy by undertaking a study.
The Agricultural exports accounts for approximately 10.24% of the country’s total exports. The total
value of agricultural commodities exported was approximately USD 20.67 Billion for the period 2020-
21. The growth in agricultural exports in recent years, has been primarily driven by the government’s
policy-level interventions as well as the expansion of products into new markets. Exports to European
markets from India have been growing consistently during last decade. Major markets for Indian
exports have been United Kingdom, Netherlands, Germany, Belgium and Spain etc. Important
products, exported to European markets are Basmati Rice; Fresh Grapes; Processed Vegetables;
Processed fruits, juice & nuts; Cashew kernels, guargums, cereal preparation, cucumber & gherkins
(preserved), fresh vegetables and spices (pepper, mint, fenugreek, Chilli, cumin) etc.
For FPOs, targeting European markets for agricultural export can be a good opportunity, provided they
can develop their supply chain (stating from production, aggregation, packaging, transportation,
logistics etc.) as per the market requirement. Given that stringent quality norms and traceability are
two critical criteria, FPOs need to strengthen their production processes, develop modern
infrastructure, and train their manpower to align with the requirement.
For assessing the potential of FPOs to participate in the agricultural export businesses, specifically to
European market, interaction was held with different stakeholders, including representatives of FPOs
in different part of the country, regional officials of APEDA, officials from state agriculture department,
marketing board, exporters and start-up. APEDA facilitated these discussions by providing introducing
the project team to many of these stakeholders. Key findings of these discussions are as under -
• FPOs are at different stages of maturity and therefore need customised strategy to make them
capable for exports.
• Need to increasing business patronage amongst FPC members for increasing business volumes.
• Most FPCs do not have business risk bearing capacities and therefore are interested in doing low
risk/ risk-free businesses
• FPCs lack in exposure and experience of export businesses, leading to low level of confidence,
which is becoming one of the major hurdles in taking business initiatives.
• Limited access to fund and infrastructure is also one major barrier at the level of FPCs.

Learning and experience of FPOs in export 4

There are many other challenges, which can be categorised into FPO management and governance
related; Production planning and back-end aggregation; quality control, advisory and input supply;
awareness of quality parameters, understanding of logistics, operation (sorting, grading, packaging
etc.); business finance and accounts etc.
Based on review of secondary literature on FPOs functioning in India and analysis of inputs received
from primary discussion, specific strategy and recommendations have been devised, which can be
implemented under the Indo-German Cooperation on Agricultural Market Development project.
Approach for interventions for strengthening the FPOs to make them export capable shall be
customized as per the maturity level, financial capabilities, governance structure and other variables.
For taking-up activities, there shall be a FPO selection process, which also categories the FPO to
accommodate it in relevant intervention segment. FPO shall be selected on various parameters such
as –
• Members producing or willing to produce export market-led crops / products
• Capable leadership at the helm
• Potential for scalability
• Willingness for adoption to change
Once selected, the FPOs shall be provided operational and/or institutional support. Operational
support shall be for improving exportability through interventions in the supply chain activities,
starting from production, aggregation, value addition and export; and Institutional support shall be
providing parallel support for convergence, partnerships and business facilitations.
Operation interventions –
Strategy for enhancing export capability of FPO will need support along with the export supply chain
of the product. The interventions for supporting FPOs for strengthening them for export shall be
complementing the efforts of existing agencies working with the FPOs (as sponsoring agency or
promoting agency). Also, the interventions shall explore convergence with initiatives of various
agencies providing technical and financial support. Given this background, the focus of operation
related interventions shall be focused more on production and post-harvest level.
• Strengthening Farmers Engagement (Enhancing scale and sustainability)
• Promotion and adoption of GAP and other improved production practices
• Creation of Export-oriented infrastructure
• Market Exposure
For implementation of operational interventions, services of qualified technical agencies (from Europe
as well as from India) shall be hired and medium-term (from 2-5 years) projects shall be
conceptualised.
Institutional Interventions –
Institutional interventions and strategies are required to further strengthen and ensure sustainability
of operational interventions. The focus of institutional interventions shall be developing institutional
mechanisms, which, once facilitated, are sustainable in nature and can bring continuity of the work.
Three specific interventions under this category are, multistakeholder partnerships, market
development activity and FPO trade facilitation.
Under the Indo-German Cooperation on Agricultural Market Development project, different strategies
and sub-projects can be prepared for a time-period ranging from two – five years. Conceptualization
and implementation of these projects shall be in close collaboration with some of the important
agencies including APEDA, SFAC, NABARD, NCDC and other state government agencies.

Learning and experience of FPOs in export 5

1. FPOs background and status in India
Indian agriculture system has been known for its small holdings and resource starved farmers, and
having insubstantial capacities to be player the market and play any vital role across the value chains.
Further, there are challenges of increased transaction costs, limited and high-cost access to finance to
farmers, uncertain market prices for outputs as well as increasing market risks due to direct exposure
and reducing government participation at market ends. Therefore, for becoming market competitive,
small holders need to create economies of scale through suitable institutional means, which are not
only able to reduce cost of transaction but also able to enhance bargaining power of the small farmers.
World over, there are examples establishing that farmers’ organizations have led to 50% increase in
profit of small farmers from the crops handled by these organization (Sukhpal Singh, 2013).

In India, Farmers’ Producer Organisations (FPOs) in various collective institutional forms, be it

cooperatives, producer companies (FPCs) or any other forms are being promoted on the principle of
aggregation with objectives of increased income and better participation in value chains.

Traditionally, in India, there have been farmers’ cooperative at the primary level and have been active
in all the areas of production, marketing, credit, and allied activities across the sectors (including
handloom, artisan etc.) in rural India. It has also been highlighted that the cooperatives have reach to
almost 100% of India’s villages and have covered 80% of rural population. However, due to various
challenges being faced by cooperative in terms of their functioning, interreferences of government in
day-to-day businesses and other inefficiencies, promotion of Farmers’ Producer Company (FPCs) was
proposed. To facilitate the formation of FPCs and for registration, the Companies Act 1956 was
amended appropriately in 2003 (amendment of Section 581). The FPCs are seen as a hybrid of
cooperatives and of private limited company. FPOs, in general are expected to reduce the
intermediaries in agricultural supply chains (both for inputs and outputs). As FPOs (both Cooperatives
and Producer companies) mature, gain operation and financial strength, they are expected to play
much bigger roles agribusiness and agricultural markets.

The promotion of FPCs was initially started with the State Government support. In Madhya Pradesh,
under District Poverty Initiative Project (DPIP), a World Bank funded project, 14 FPCs were registered
in the year 2005. Thereafter, various State and Central Government agencies and private sector
organizations have been involved in promotion of FPCs across India. In addition to Small Farmers
Agribusiness Consortium (SFAC), National Bank for Agriculture and Rural Development (NABARD),
National Agricultural Cooperative Marketing Federation of India (NAFED), National Cooperative
Development Corporation (NCDC), other agencies like North Eastern Regional Agricultural Marketing
Corporation Ltd. (NERAMAC), NDDB Services Pvt. Ltd., Coconut Development Board, state Agriculture
and Horticulture departments and state rural livelihood missions are also engaged in promotion of
FPCs. Government of India, in the annual budget of year 2019, has also announced a Central Sector
Scheme of "Formation and Promotion of Farmer Produce Organizations (FPOs)", wherein it has been
targeted to promote (additional) 10000 FPOs in five years with budgetary provision of Rs 6865 crore
(approx. 93 million USD).

Learning and experience of FPOs in export 6

Number of FPCs in India has grown from 156 in the year 2011 (Sukhpal Singh) to around 7900 in year
2020 (C. Sambhu Prasaad). In case of cooperatives, there are around 8.60 lakh cooperatives in India,
out of which approximately 63,000 are primary agricultural cooperatives (PACs). There are 340
multistate agro (including sugar mills and spinning mills) and dairy based cooperative societies in India.

FPOs, as institution and ecosystem, is still an evolving phenomenon in India, however looking at over
one and half decade of progress, there are wide range of FPOs, depending on various parameters,
such as membership and shareholder base, business types, equity base, business turnover,
organisational structure etc. These variations are basically driven by multiple factors, including
influence and support of FPO
Statewise number of FPCs registered promoting agency, social and
(uptp 2019-20) cultural background of the members,
progressiveness, product types,
Other States 585 state government policies and
Jharkhand 176
support and other factors. However,
Gujarat 211
Kerala 255 in general perception and in various
West Bengal 265 research papers, it has been found
Haryana 280
Andhra Pradesh 305
that, most newly formed FPOs are
Bihar 315 surviving with government support
Orissa 326 through various schemes, and it is
Telangana 421
Karnataka 421 going to be a long arduous journey
Rajasthan 448 until they sustain themselves
Madhya Pradesh 531 financially to be strong link in value
Tamil Nadu 585
Uttar Pradesh 818 chain. The current state of affair is,
Maharashtra 2013 absence of technical skill and
0 500 1000 1500 2000 manpower with the FPOs, lack of
access to credit and finance, poor
availability to infrastructure and access to market information and intelligence.

Learning and experience of FPOs in export 7

2. Learning and experience of FPOs’ in export – Objectives and
approach
India has aggressive targets of exporting agricultural commodities worth USD 100 billion in next few
years. Although India has wide production base and is a leading producer of some of the major
agricultural commodities in the world, however, share of India in global agricultural trade is
insignificant, a little over 2% of share of global trade. With current policy focus, there are huge
potential and possibilities of .

There are multiple challenges in export, which make Indian commodities uncompetitive in the global
markets. These challenges exist across supply chain, starting from production (quality and varietal
suitability of crop), logistics, infrastructure (inefficiencies, high costs, quality control in transit), export
financing, market intelligence and access etc 1. Given the continuous thrust on agricultural production,
India is becoming a surplus producer of many commodities and products and therefore, it is expected
that the agricultural export is going to see major growth in coming years.

Agriculture exports in India are in hands of big corporate, export houses, high value individual
entrepreneurs, and exporters. There has been hardly any direct participation of farmers in exports,
except from few farmers in some of the most export-oriented production districts (such as Nashik in
Maharashtra, where progressive grape farmers own the pack-houses and have active partnerships
with the exporters). Farmers Producer Organisations (FPOs) have also started finding their space in
the export value chains.

FPOs, with current thrust and financial support from the government, are emerging as important
institutions in agri value chains in India. However, many studies and individuals have highlighted
various challenges and weakness of FPOs, which are mostly relating to absence of required business
skill of FPOs, such as frail governance, poor financial capabilities, and lack of vision for growth.
Government, through its agencies, is trying to address some of these challenges. For example, SFAC
has schemes like, matching equity grant, credit guarantee scheme and venture capital assistance for
the FPOs to address their financial challenge. In various other schemes of Department of Agriculture
and Farmers Welfare (GoI), of other associated ministries and departments, separate financial
provisions have been made for supporting FPOs. Although there are some inherent issues in FPOs
ecosystem in India, however, it is expected that over period their role in agriculture will gain
prominence, including role in export of agricultural commodities from India.

The Indo-German Cooperation on Agricultural Market Development project is a part of bilateral

cooperation programme of Federal Ministry of Food and Agriculture (BMEL), Germany and is intended
to contribute to the sustainable economic growth of India’s agricultural sector and improve livelihoods
in rural regions through modernising agricultural markets. As part of this project, one key result area
is to integrate Farmers Producer Organisations (FPOs) into a sustainable and market-based value
chains. For this, it is imperative to identify the key learnings, drivers, and barriers that the Farmer’s
Producer Organizations (FPOs) have experienced in agricultural produce exports by compiling
empirical evidence and developing suitable strategy by undertaking a study.

Under this study of “learnings and experience of FPOs’ in exports”, FPOs which are exploring the
export markets have been targeted to understand their learnings. Efforts have been made to assess
specific expertise that these FPOs have acquired for becoming exporters of agricultural and food
products as well as highlight the specific activities, roles & responsibilities played by the FPOs. The

1 Indian Agri Exports: Study on difficulties faced by the exporters in the supply chain of agricultural products (APEDA)

Learning and experience of FPOs in export 8

study has also attempted to reveal relationships with various value chain actors and their specific
contribution in process (from production to export markets) has also be captured to analyse their
involvement and influence in enabling access to export markets.

Approach and Methodology -

For conducting the study, mixed approach of secondary and primary research was adopted. Secondary
research for the study included analysis of current agricultural export portfolio and trend analysis. In
addition to analysis of data, various reports and documents available in public domain were reviewed
to understand the perspective of Indian agricultural and allied sector export. This also included review
of some of the studies conducted by APEDA and export policy documents of the Government of India
and of state governments.

For conducting primary survey, five FPOs were selected, with help of APEDA, from different parts of
the country (Uttar Pradesh, Maharashtra and Tamil Nadu). In addition to interaction with
representatives of preidentified FPOs, various other stakeholders, including regional officials of
APEDA, government officials, exporters, pack-houses and logistic services providers were also
contacted for taking their inputs.

For purpose of interaction and recording inputs, structured questionnaire (for FPOs) and semi-
structured interview guides (for other stakeholders) were prepared.

Study team visited different locations (Varanasi and Bhadoi (in Uttar Pradesh), Nagpur, Warud, Pune
and Pandharpur (Maharashtra), Chennai, Tiruchirappalli and Theni (Tamil Nadu)) in different part of
the country for interaction as well as to assess the ground realities of FPOs engagement in exports.
List of representatives of FPOs and other stakeholders, with whom interactions were held during the
study period is enclosed in Annexure to this report.

Analysis of data and evaluation of qualitative inputs received from various stakeholders was done and
report has been prepared. The report includes analysis of activities, roles, processes, challenges,
capabilities, and specific recommendations for actionable interventions for AMD project.

Limitation of the study –

Indian agricultural and allied sector export is vast and diverse. Given the assortment of the products,
geography, activities, and type of stakeholders involved, this study had some limitations, which have
been discussed as under –

• There are not many FPOs / FPCs having direct experience of export, therefore, the outcome
and recommendations are based on the discussion with the limited number of respondents
only.
• Given the period of pandemic, primary interactions were held with limited stakeholders, and
it was not possible to organise group discussions with mixed audience.
• Export value chain stakeholders and service providers have limited experience of working with
the FPOs, therefore, their responses were mainly based on their limited experience of dealing
with collective institutions.

Learning and experience of FPOs in export 9

3. India’s agricultural export
The agriculture sector in India is the primary source of livelihood for about 70% 2 of India’s population.
It is the world’s largest producer of milk, pulses, and spices, and the second largest producer of rice,
wheat, cotton, sugarcane, farmed fish, sheep and goat, vegetables, and tea. Post Green Revolution,
the Indian agriculture has undergone transformational changes. Between the early-1970s and the
late-nineties, India’s annual farm Gross Domestic Product (GDP) expanded from about USD 25 Billion
to over USD 100 Billion. During this initial period, the growth was focused on cereals, limited to wheat
and rice. However, between 2000 and 2014, the country’s agricultural production increased from USD
101 Billion to about USD 367 billion, fuelled mainly by horticulture, dairy, poultry, and inland
aquaculture 3.
Government of India and its various agencies have been working on promoting agricultural exports
from the country. Ministry of Commerce and industries Government of India has introduced
agricultural export policy 2018 which aims to double the agricultural export from India by 2022. Export
policy has also identified 47 product districts clusters promoting export-oriented production. This
policy also targets increasing income of Indian farmers by harnessing export potentials. Fifteen states
have also prepared agriculture export plans.

The Agricultural exports accounts for approximately 10.24% 4 of the country’s total exports. The total
value of agricultural commodities exported was approximately USD 20.67 Billion for the period 2020-
21. The growth in agricultural exports in recent years, has been primarily driven by the government’s
policy-level interventions as well as the expansion of products into new markets. With this, India is
witnessing growth in the export of agricultural commodities like cereals, non-basmati rice, wheat,
millets, maize, and other coarse grains.

Agricultural Exports from India (In USD Mn)

25000,00 Wheat
Others
20000,00
Non Basmati Rice
USD Mn

15000,00
Miscellaneous Preparation
10000,00 Maize
5000,00 Groundnut

0,00 Cereal Preparations

2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Buffalo Meat
Basmati Rice
Source: Agricultural & Processed Food Products Export Development Authority (APEDA)

In volume terms, 32.11 Mn MT of agricultural commodities were exported from India for the year
2020-21. This excludes spices and tea etc. India is also one of the major exporters of spices, spices oils,
oleoresins to the world. During year 2019-20, India exported 1208 thousand MT of spices worth USD
3110.63 million 5.

2
Food and Agricultural Organisation of the United Nations (FAO)
3
Department of Commerce Ministry of Commerce and Industry Government of India
4
Agricultural & Processed Food Products Export Development Authority (APEDA)
5
Spices Board of India

Learning and experience of FPOs in export 10

 Agricultural Exports from India (000 MT)
40000,00
Wheat
30000,00 Others
Non Basmati Rice
000 MT

20000,00 Miscellaneous Preparation

Maize
10000,00
Fresh Onions
Buffalo Meat
0,00
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Basmati Rice

Source: Agricultural & Processed Food Products Export Development Authority (APEDA)

Share of India's Agricultural Export Value India exports its agricultural and processed
- Countrywise food products to over 200 countries
Bangladesh; globally. The largest markets for India’s
6,8% agricultural products are Bangladesh, UAE,
UAE; 6,0% USA, Vietnam, Saudi Arabia, Malaysia,
Indonesia, Nepal, Egypt and Iraq. As per
USA; 5,4% industry sources, there was a robust
demand for Indian cereals in 2020-21, with
Vietnam ;
4,1% shipments sent to several countries for the
Others;
52,5%
Saudi first time, such as rice to countries like
Arabia;
Timor-Leste, Puerto Rico, and Brazil.
6,9%
Malaysia;
Similarly, wheat was despatched to
4,3% countries such as Yemen, Indonesia, and
Indonesia; Bhutan, and other cereals have been
Iraq; 4,0% 3,3%
exported to Sudan, Poland, and Bolivia
Egypt; 2,1% Nepal; 4,5% among others. One of the main reasons for
large quantities of exports from India to
Gulf and other South-east Asian countries is lesser restriction compared to the European countries.
Additionally, India also has advantages of vicinity to these markets. European countries have stringent
quality norms, such as strict norms on acceptable level of pesticide residue and frequently changing
quality parameters. Any export to most European countries require detail documentation,
traceability, quality testing, food safety regulations etc.
Agricultural Exports to European Countries
Europe is also an attractive market for agricultural exports from India. From rice and buffalo meat to
perishables, such as grapes, India has been exporting major agricultural produce to different countries
in Europe. In 2020-21, the Indian agricultural exports to the European region were 1.42 Mn MT, with
a value of approximately USD 1.68 Billion.
Exports to European markets from India have been growing consistently during last decade. Major
markets for Indian exports have been United Kingdom, Netherlands, Germany, Belgium and Spain etc.
Important products, exported to European markets are Basmati Rice; Fresh Grapes; Processed
Vegetables; Processed fruits, juice & nuts; Cashew kernels, guargums, cereal preparation, cucumber
& gherkins (preserved), fresh vegetables and spices (pepper, mint, fenugreek, Chilli, cumin) etc.

Learning and experience of FPOs in export 11

 Leading European Destinations for Agricultural Exports from India

2020-21
Belgium
2019-20
France
2018-19
2017-18
Germany

2016-17 Greece
2015-16 Italy
Year

2014-15
Netherlands
2013-14
Others
2012-13
Russia
2011-12
Spain
0 200 400 600 800 1000 1200 1400 1600
UK
Volume in 1000 MT

For FPOs, targeting European markets for agricultural export can be a good opportunity, provided they
can develop their supply chain (stating from production, aggregation, packaging, transportation,
logistics etc.) as per the market requirement. Given that stringent quality norms and traceability are
two critical criteria, FPOs need to strengthen their production processes, develop modern
infrastructure, and train their manpower to align with the requirement. In following chapter,
experiences of FPCs, who have either exported or are planning to export to European markets will be
discussed and based on analysis of their learnings, recommendations shall be proposed for developing
strategy to make more FPCs export ready to cater to European markets.

Learning and experience of FPOs in export 12

4. Findings and Observations
For understanding the functioning of FPOs working domain in export segment, five different FPOs
were selected from different parts of the country, representing North, West and South India.
Interaction with a FPOs were coordinated with the help of local APEDA officials in different states. As
discussed in the approach in addition to interactions with the representatives of FPOs, Discussions
were also held with other stakeholders including local APEDA officials, Infrastructure services
providers i.e. pack house operators, logistic partners and packing materials suppliers, local
government officials from different departments, airport officials handling cargo and other concern
stakeholders engaged in export value chain.

Uttar Pradesh -
Uttar Pradesh is a landlocked state and traditionally is not known as major exporter of agricultural
commodities. With the efforts of APEDA local office at Varanasi, which has been set-up recently,
export activities have been initiated and within a year total export of 10000 MT is done with
consignments of fresh vegetables (1250 MT) and rice (approx. 8750 MT) have been exported in last
one year (mostly to UAE, Nepal, Bangladesh, Qatar and some sample consignments to UK and
Australia).

During field visit to Varanasi interactions were held with the APEDA officials, representatives from
Mother Dairy (coordinating with FPOs), in-charge of export pack-house operated by ITC, in-charge of
cargo centre at LBSI airport and management of three FPCs and their member farmers. Some of the
highlights of these interactions have been mentioned as under –

Interaction with the FPCs -

In Varanasi region, different FPOs have been promoted by various agencies as well as there are self-
promoted FPOs. Originally selected two FPOs, namely Ishani Agro Producer Company Limited (IAPCL)
and Jaya Seed Producer Company Limited (JSPCL)are promoted by Foundation for Advancement of
Agriculture and Rural Development (FAARD Foundation). Both FPOs were registered in year 2015-16.
IAPCL has 1000 shareholders with paid up capital of Rs. 15,95,000, and is engaged in business of agri
input marketing, mainly seed marketing and trading of Paddy. Company procures paddy from farmers
and sell it to the millers. IAPCL has also installed infrastructure such as warehousing (10,000 MT) and
seed processing plant. IAPCL had exported three quintals of green peas through an exporter based
out of Mumbai. This export was done to UAE. JSPCL has 400 members as a shareholder. Seed
processing and marketing is the main business of the JSPCL. Company has invested in setting up its
own seed processing plant with assistance from state government under DRISHTI scheme. JSPCL Also
has licenses for trading of seed, pesticide, fertiliser and has also got import export code opened.
Company facilitated export of three containers of mango and around 4 MT of green peas to UAE.
Mango was procured from a single orchard / single farmer only. Export was done by the exporters
from the Mumbai. Both the companies have been able to achieve turnover of approximately INR 25 -
30 lakh during last financial year. Brief description of discussion with the representatives of FPCs have
been provided in the Annexure - 5.

Learning and experience of FPOs in export 13

 Interaction with FPO representatives

In addition to above these two FPCs, which were selected for interaction, a third FPC by name of
Trisagar Farmer Producer Company was also approached for discussion. Trisagar is self-promoted
producer company without any help from any support agency. Trisagar is the main FPC engaged in
facilitation of export from the region. As of now Trisagar has been able to organise export of around
eight containers of chili to UAE. However, even Triagar is also not engaged directly in the export,
current export is done through an exporter based out of Mumbai. Trisagar FPC organise all the back-
end activities of aggregating the produce, sorting-grading, packing and transportation of produce to
JNPT, Mumbai. Custom sealing of container is done at JNPT itself.

Some of the important points highlighted by the representatives of FPCs regarding participation in
export of agricultural commodities and specific, export to European markets, are as under –

• Current production practices in the region are mostly traditional and are not aligned to exports
led production system. Because of this, most produce from the region does not qualify export
criteria, specifically to European markets.
• During recent export activities, FPCs organised empty containers from Mumbai, for which they
had to bear extra cost for one side transportation of empty container. This high cost of
transportation put them at a disadvantageous position compared to farmers exporting from states
such as Maharashtra and Karnataka.
• Availability of required infrastructure for handling product is poor. Back-end infrastructure
starting from aggregation of produce at the farm, logistic infrastructure e.g. transportation from
field to pack-houses and pack-houses are almost absent in the area.
• For some of the selected local crop / varieties, such as local rice, which needs specialized
processing facilities are not available locally and this gap restricts exports.
• Amongst farmers and farmers’ producer companies, there is lack of awareness of certification
requirement and export documentation for participating in the export trade.
• FPCs lack availability of trained main power who can handle export operations, starting from
quality control, packaging, logistic, negotiation and documentation and follow-up.
• Although APEDA has organised many buyer-seller meets in the area, FPCs Have not been able to
establish any significant market linkages in major export markets.

Learning and experience of FPOs in export 14

• FPC's are note in position to take market risks, associated with export markets including price
fluctuation, currency fluctuation and payments related risks. This is one of the main reasons
wherein FPC management would prefer to sell their produce at site on a fixed price basis to the
exporters, instead of they themselves participating in the export trade.
• Lack of availability of funds with FPCs and poor response from banks and other financial
institutions, for providing loan or access to credit is also a limiting factor for the FPCs to target
export-oriented activities.

Key observations on FPCs –

• FPC formed in the area in general, do not have much idea on their roles and responsibilities
towards members, business prospective, long term vision and clarity on way forward.
• Most of these FPCs are being run by part-time employed team members or management,
who are otherwise engaged in other income activities such as full-time job with other
companies / enterprise, working at their own farm or running their individual businesses.
• Participation and business patronage amongst FPC members is limited. Generally, the FPC's
are being run by individual or a small group of family relatives.
• FPC management lacks training on business planning, financial management, compliance
and statutory regulations.
• Due to lack of access to credit and finance, FPC's are unable to scale up their business to the
extent, where they can become financially sustainable and compete in the market.
• FPC's have very limited or no access to technical manpower for value addition, processing
and accessing export markets.
• In absence of exposure to modern businesses practices and technologies; FPC management
in most cases is unable to envision growth prospect for the FPC.
• Government has extended its support to the FPCs by providing subsidies for setting up
processing plants such as seed processing and warehousing, now for making these FPCs
viable, technical training, hand holding and marketing linkages support, in form of access to
market information, intelligence and market access is the key for their growth.

APEDA -
As per officials from APEDA, there were no activities of export before 2019 from Varanasi region. Once
APEDA office was started, coordination was initiated with various agencies for facilitating export
activities from the region. These initiatives
included introduction of exporters to FPOs in the
Varanasi region, opening up of bottlenecks at the
airport for export facilitation, including initiating
custom clearance facility and quarantine clearance
facility at the airport. APEDA has been able to
register 15 FPOs with them for exports of
agricultural commodities and has organised
various training programs in the Varanasi region
(More than 15 trainings have been conducted by
APEDA for sensitisation and capacity building of
FPOs and exporters). APEDA has also organised
seven International and domestic buyer-seller meets have also been organised in physical and virtual

Learning and experience of FPOs in export 15

form which has facilitated more than 5000 farmers and FPOs to get first-hand exposure of
international markets. The current export destinations for exports from Varanasi and the surrounding
areas are UK, UAE, Bangladesh, Vietnam, and Nepal etc.

Some of the important observations of APEDA officials, with regards to promotion of export through
FPOs from this region, are as below –

• Most of the FPOs are new in the business and they have limited understanding of agricultural
trade in general and export in particular;
• FPOs have very small capital base and have limited access to capital therefore they face major
financial crunch to handle large export orders which require huge working capital;
• Most farmers and representatives of FPOs are not aware of export quality requirements for
different global markets. Farmers are not following Global GAP certification or any other
suitable package of practices for production, which can help them in complying to the export
requirements.
• Required infrastructure is not available at the back end for aggregating the products from
farm and packing as per the norms of various buyers.
• Varanasi region being landlocked area, transportation from here to any nearest seaport makes
product uncompetitive in the
market.

With these above observations, it

was highlighted that the region
has wide range of products which
can be exported to different global
markets, however promotion of
export will need special focus from
the government in terms of
building capacity of farmers and
FPOs for export competitive
production system, infrastructure
for handling export and financial
support for logistic
competitiveness.

Other stakeholders –
During field visit to Varanasi, interactions were also held with other stakeholders facilitating the
agricultural exports. Some of the important stakeholders amongst these are charge of perishable
cargo centre at Raja Talab, Cargo centre in charge at Lal Bahadur Shastri International (LBSI) Airport
Varanasi and officials from mother dairy.

Perishable Cargo centre is being operated by the ITC (e-chaupal), a major private sector player
engaged in agribusinesses. The facility has four cold storages chambers of 100 metric ton each,
automated grading machine and space for sorting, grading, packing and loading. This facility is
available to farmers, Farmer Producer Companies and other enterprises on utilization charges basis.
Farmers can avail cold storage and other facilities at PCC on per day basis wherein, they need to pay
Rs. 0.10 per kg per day, up to 10 days of storage. From 11th day onwards charges are Rs. 1.00 per kg
for one month. In case of entrepreneur, there is charge of ₹ 1 per kg per month. As of now, PCC has
been able to handle one container of mango and two containers of chilli for the export. ITC, under its
CSR activities, is also working with the farmers for promoting good agricultural practices and adoption

Learning and experience of FPOs in export 16

of modern production technologies at farm. Company has organised various demonstrations of
tomato (20 acre), chilli (20 acre), cauliflower (20 acre) and carrot (20 acre) in the area, wherein, it has
provided quality seed, mulching materials and support of technical team in the field. Company also
provides marketing support to farmers for better market access.

As per the representative of ITC, export activities from this region have started just recently. Although
the potential for agricultural exports exists in the area, however, it has not been fully exploited due to
lack of awareness about export markets and logistics challenges of the area. It is expected that, as the
awareness about quality production, better production practices and adoption of modern production
technologies will improve in the area, exportable marketable surplus will also increase. These
increased volumes of exportable products will help in achieving economies of scale, reducing the costs
of product handling, transportation and logistics and will make the region export competitive.

Visit to Perishable Cargo Centre at Centre

At LBSI Airport (Varanasi), in addition to the cargo facility, support infrastructure for plant quarantine
and custom clearance has also been established. Currently there is only one international flight going
to Sharjah from Varanasi, however, it is expected that after COVID-19 restrictions are over, a greater
number of international flights will be added. Other airline operators also provide cargo facility
through their transit cargo facilities at major airports. Agricultural products are being exported as belly
cargo in the flights, instead of Unit Load Devices (ULDs). For facilitating export of fresh produce, such
as fruits and vegetables, a facility of transit cold storage of a 5 MT capacity has also been established
at the cargo. Airport Authority of India charges ₹3.26 plus GST per Kg of cargo handling, this includes
terminal storage charge, processing, and X-ray charges. generally, C&F agents handle documentation
part at airport cargo on behalf of the exporters.

As per the officials at airport, creating additional infrastructure at the airport is not a major issue
however utilization is a big challenge. Current export volumes are very low because of lack of general
awareness about agricultural exports amongst entrepreneurs, farmers and farmer producer
companies in the area.

Mother Dairy, which is one of the major players in trade of fresh fruits and vegetables in Varanasi also
works with Farmer Producer Organizations. Company is also engaged in exports of processed
vegetables such as peas, cauliflower, cabbage etc. from its processing facility at Ranchi. While
discussing with the local representative of Mother Dairy, it was highlighted that currently they are
fulfilling their local requirement by bringing material from other parts of the country and from mandi.
Highlighting the local challenges, Mother Diary representative mentioned, the farmers in the region
are not following modern production practices, are also not using quality inputs and the production
system is not aligned with the market demand. Most of the farmer producer companies working in
the area have limited resources to develop deep engagement with their member farmers for
improving production practices and increase productivity. Small and marginal holdings is another

Learning and experience of FPOs in export 17

 Visit to LBS International Cargo Centre, Varanasi

major challenge for the Farmers Producer Companies to raise required equity or convince their
member farmers to invest at farm. He also highlighted that most companies have very week
management system and governance. Therefore, they lack leadership and vision for the growth.

Maharashtra –
Maharashtra is one of the leading states in country in terms of progress of agriculture, in general and
agricultural export, in particular. Many products from Maharashtra have been established in export
markets Gulf and Europe. State, a leading exporter of grapes to Europe Bangladesh and Gulf, is also
major exporter of pomegranate, onion and numerous other agricultural commodities. In addition to
advantage of agro-climatic conditions of the state, which is suitable for production of wide variety of
agricultural crops, Maharashtra also has locational advantage by having direct access to sea-port,
which gives it a competitive advantage over various other states. Maharashtra has also remained at
forefront when it comes to experimenting various institutional frameworks for farmers collectives.
State has some of the largest and successful sugar cooperatives running in the country. In case of
formation of FPOs / FPCs, Maharashtra is again a leading state in the country. In addition to the FPCs
being promoted under various central sector schemes, state government, through its various
departments, agencies and projects, has created schemes, not only for promotion of FPCs but for
strengthening the FPCs, by providing them technical training, providing financial support and by
creating an eco-system for collective based enterprises.

In case of engagement of FPCs in export, Maharashtra is again leading the path from front. Sahyadri
Farmers Producer Co. Ltd (SFPCL), which is one of the leading exporters of grapes to the Europe from
India is from Maharashtra. Although Sahyadri is an exceptional case, there are other smaller FPC's
state, which are engaged in export activities and doing it successfully.

Learning and experience of FPOs in export 18

Farmers Producer Organisations (FPOs) –
For this assignment two farmers producer companies selected namely, Shramjivi Nagpur Orange
growers Company Limited (Warud, Amaravati) and Farmer’s Delight Agro Producer Company Limited,
Pandharpur (Pune). In addition to these two farmer producer companies, a third company by name of
Yeoti Agro Producer Company Limited was also contacted for taking its input for the assignment.

Shramjivi Nagpur Orange growers Company Limited (SNOGCL) was registered in year 2015 by TCS
under Convergence for Agriculture Interventions in Maharashtra (CAIM) Project. Company has 470
equity shareholders spread across 60 - 65 villages in Amravati district. Main business activity of the
company is trading of oranges. Company is also engaged in input marketing which is a very small
business for the company. It deals in neem-powder, Trichoderma and other growth promoting inputs
for the agriculture. FPC has set-up its own pack-house with all modern machinery for washing, sorting,
and grading of oranges. FPC has invested Rs. 1.6 Cr. (approx. USD 225 thousand) for setting up the
sorting and grading plant. Out of this FPC has received subsidy of ₹ 93.00 lakh (approx. USD 130
thousand) from the state government. Directors of FPC have given a lone of ₹30 lakh to the FPC.

During last four years, SNOGCL has increased its turnover from ₹ 34.33 lakh (approx. USD 47.00
thousand) in year 2017-18 to ₹ 4.17 Crore (approx. USD 580.00 thousand) in year 2020-21. Company
has got two types of business model, 1) it facilitates buyers in purchasing oranges (as orchard) from
its member farmers and charges for its services of harvesting, sorting, grading and packaging and 2) it
has its own brand of Orange (Snoco Orange), which it sells in different wholesale markets. Company
has supplied oranges to almost all big organised retailers and new-age agri start-ups such as Big
Basket, More Retails, HOPCOM, GoFresh, StarBazar, Citrus India, Taj Fruits and MKC Agrofresh etc.
Company has exported only one container of citrus to Bangladesh and that too is through Taj Fruits
Co., not directly as an exporter. One of the main reasons for the success of SNOGCL, is experienced
leadership and efficient FPC management. Company has got a full time CEO, who has been working
with the FPC since last six years and has overall 35 years of experience in the same sector.

Farmer’s Delight Agro Producer Company Limited, Pandharpur (Pune) was another FPC, which
was contacted for the assignment. However, after meeting the representatives of the FPC, it
emerged that the FPC has not yet started any business activity. The registration process has
been completed and the FPC has got a layout prepared for setting-up of a pack-house for
handling fruits such as pomegranates and grapes for domestic as well as export markets.

Visit to Shramjivi Nagpur Orange growers Producer Company Limited (Warud), Nagpur
In addition to the above two FPCs, interaction was also held with another FPC, by name of Yeoti Agro
Producer Company Limited (YAPCL), which has got some experience of export. YAPCL has 870
members and paid-up capital of ₹ 8.70 lakhs. Before COVID-19 lockdown and movement restrictions,
YAPCL has been working with various organisations such as Shayadri Farmer Producer Company
Limited, INI Farms and NextOn etc. FPC also has a banana pack-house along with two ripening
chambers. YAPCL has been working in crops such as banana, pomegranate and corn. For corn, YAPCL
had also organised contract farming on behalf of NextOn, wherein it had facilitated corn cultivation

Learning and experience of FPOs in export 19

on 600 acre in its catchment area. However, most farmers did not remain loyal to the FPC and large
quantity of corn was sold in open market out of the contract agreement. Similarly, FPC also had a bad
experience of organising pomegranate supply to another large company for export, wherein,
uncertainty of prices and irregularities in orders affected its relation with the farmers. FPC
management is again in the revival mode after COVID-19 impact.

Based on these discussions with FPCs in Maharashtra, some of the key observations, which are
emerging out, are as under –

• Overall, there are wide variation in the characteristics and business capabilities of FPCs in
Maharashtra.
• FPCs, having mature leadership and clear vision, are doing good business and are also trying to
participate in the export markets.
• In Maharashtra, state government, under various schemes and program, is helping FPCs in setting
up infrastructure such as pack-houses. This infrastructure is helping FPC's in developing engaging
linkages with its member farmers, as well as, has helped in creating business proposition for
forward market linkages.
• Based on discussions with different FPCs’ management and understanding of their priorities, it
has emerged very clearly that FPC's are more interested in taking up activities, which have lesser
financial risks.
• Lake of exposure of export markets, such as quality requirement, negotiations, market intelligence
and market linkages are also limiting factor for FPCs to participate in the export activities.
• For expanding the business, availability of working capital is the serious and major concern for the
FPCs.

Interaction with FPC representatives at Pandharpur (Pune)

Visit to Orange Export Facility Centre (Warud) –
Maharashtra State Agriculture Marketing Board (MSAMB) is promoting exports of selected fresh
produce by setting-up Export Facilitation Center for these products at identified clusters. One such
export facilitation centre has been established at Warud for facilitation of export of orange. The facility
has mechanical sorting & grading line, covered area for packaging, cold storages and dispatch dock
etc. From perspective of quality of infrastructure, this is one of the best facilities available in the
cluster. However, utilization of this facility is almost negligible because of various technical as well as
administrative reasons. While discussing with the local traders in the Warud market, it was highlighted
that, if the Board would have conceptualised this facility in consultation with local traders and in
partnership with exporters, there would have been a different scenario of use of this facility. It was
observed that any kind of public-private partnership model for operation of such post-harvest
infrastructure, if possible, only if these infrastructures are designed and installed as per market trends.

Learning and experience of FPOs in export 20

 Orange Export Facilitation Centre (MSAMB), Warud (Nagpur)
Maharashtra State Agricultural Marketing Board (MSAMB) –
Maharashtra State Agricultural Marketing Board is headquartered at Pune. Board is the nodal agency
for developing agricultural markets and administrating Agricultural Produce Marketing Committees
(APMCs) at the state level. MSAMB is also the nodal agency for implementation of agriculture export
policy in the state of Maharashtra. Under this policy various initiatives have been undertaken, such as
creation of export-oriented infrastructure, establishment of forward and backward value chain
linkages for export, capacity building of growers to comply with international quality standard by
implementation of good agricultural practices (GAP). Board also facilitates export by providing market
information and intelligence to farmers and is working in close coordination with APEDA and NPPO
for protocol finalization. For promoting export board also organise training courses, take up trail
consignments and participate in various international exhibitions.

MSAMB has also taken initiatives under the World Bank funded State of Maharashtra Agribusiness
and Rural Transformation (SMART) project and Asian Development Bank assistant Maharashtra Agri.
Network (MagNET) project for agricultural value chain development. Under both of these projects,
special emphasis has been given to bring at FPCs on board, to make them active partner in developing
marketing and post-harvest infrastructure in the state as well as for making these FPCs to take lead
role in developing domestic and export market linkages.

As per MSAMB officials, intensive handholding of FPC is required for developing competitive market
linkages. This need adoption of market practices by FPCs in a manner in which the markets function.
Traceability of produce is one area, where FPCs can play an important role. Already, APEDA has
promoted HortiNET, in manner GrapeNET was promoted. This is facilitating traceability and has made
the work easy for any institution, who would like to participate in the export. MSAMB is promoting
HortiNET amongst the farmers and FPCs. Through HortiNET, buyers are also given access of detail of
a product, and they can also know the source of product. Another major issue is use of spurious / non-
labelled pesticides in the horticultural crops. FPCs can be conduit in creating awareness about use of
label-claimed pesticides, which can effectively control pesticide residue level in the product and will
lead to reduced risk of product rejection at importing port (specifically for Europe) for MRL related
issues. FPCs shall be facilitated for direct interaction and collaboration with the potential buyers, in
this manner, FPC officials can get direct exposure of market and can learn from real time trade
negotiation.

In many of the export markets, specifically in Europe, buyers have specific choice and preference for
specific varieties. FPCs shall be made aware of these varieties and thereafter the FPC shall work with
the farmers in promoting these varieties for production by the member farmers.

Learning and experience of FPOs in export 21

Various infrastructure created by the MSAMB and initiatives taken for export facilitation have also
been described in Annexure.

Interaction with Private entrepreneur and Exporters –

In addition to representatives of FPCs and government officials, interactions were also held with
enterprises, including start-ups (working with the farmers and FPCs) and exporter. One start-up based
out of Nagpur, engaged in production planning, farm-advisory, contract farming and marketing of
fresh produce, shared that it is very challenging to work at backend with the farmers and FPCs due to
variety of uncertainties (lack of commitment, no loyalty for working together during production
period, poor quality assurance, price commitment), . Another start-up, working with multiple FPCs in
Nashik district for onion procurement, highlighted that the FPCs have not become mature enough,
wherein an enterprise can trust them 4 continuous supply and a dependable partnership. Therefore,
as of now they have been procuring from FPCs as one of the many suppliers. Representatives of start-
up highlighted that as the FPCs have got subsidy from the government and they can create collection
centre / aggregation centre, these infrastructures are one of the key attractions for the private sector
to partner with the FPCs. According to him FPC's are yet to achieve scale wherein they can optimise
their operational costs and become effective aggregators of output, compared to other aggregators
in the market. Similar opinion was also shared by one of leading exporter of pomegranate from India.
Exporter, who has been exporting pomegranates since last 15 years, has now shifted his procurement
base for pomegranate from Maharashtra to Gujarat. According to him, if FPCs would like to get into
exports, they shall understand the market dynamics with a broad perspective and shall be knowing
what is happening in other production clusters of same crops. According to him, FPC representative
need exposure of market to understand the competition.

Tamil Nadu –
Tamil Nadu is known as one of India's major export-hub for all types of products starting from
agricultural commodities to automobile and other consumer goods product. State is ranked at 3rd
position in Niti Aayog’s export preparedness index 2020. The Tamil Nadu State Agricultural Marketing
Board (TNSAMB) has been designated as the nodal agency for Agro-Export promotion in the State.
Twenty-three commodity clusters from agriculture, horticulture, animal husbandry, and fisheries
sector along with potential districts have been identified for promotion of Agri exports in the State.

In its Export Promotion Strategy 2021, state has identified Food Processing as one of the champion
sectors for the export. Special focus has been given on promoting exports of marine products to
developed markets including Europe. It has been highlighted in the report that the European nations
viz. the UK, Germany, Italy, France, Spain, and the Netherlands account for 30% of the global imports
in the prepared marine food products segment. Prepared products of tuna, shrimp, salmon, cuttlefish,
squids, etc. are some of the topmost exported items globally. Another important identified product
category for the export under food sector is breakfast cereal.

Tamil Nadu also has strategic locational advantage wherein; it has got access to some of the finest
ports and export infrastructure. Chennai, Kattupalli, Kamarajar and VOCPT are the main ports in Tamil
Nadu, all of which cater to various sectors. Six Inland Container Depots (ICDs) in Coimbatore, Madurai,
Chennai (2), Tirupur, and Thoothukudi; four Agri export zones in Dharmapuri, Krishnagiri, Nilgiris,
Theni, and Cuddalore districts are important export facilitating infrastructure.

Farmers’ Producer Organisations (FPOs)-

In Tamil Nadu, there are more than 350 FPOs have been registered by various promoting agencies
including SFAC Delhi, Tamil Nadu Small Farmers Agri-business Consortium (TNSFAC), Coconut Board

Learning and experience of FPOs in export 22

etc. These FPOs have anchor products such as pulses & millets, maize, paddy, groundnut, tamarind,
coconut, banana, milk, honey, jackfruits, vegetables, tea etc.

Western Ghats Banana Producer Group (Cumbum) is part of Tamil Nadu Banana Producer Company
Limited. Group and the FPC have been engaged in marketing of banana both in domestic as well as for
export markets. For exports, FPC has done multiple arrangements with various exporters in the past,
including Desai Fruits, which is one of the major exporters. Through these arrangements, banana has
been exported mainly to gulf countries only. Tamil Nadu state agricultural marketing board has
provided state of art banana pack-house to the FPC for facilitating banana export. However, in recent
years there is very small quantities of export due to unviable prices offers from the buyers. During
discussion with the FPC representatives, it was highlighted that during last few years there have been
issues relating to prices in the export markets. Companies, like Desai Fruits, had done tie-ups with the
FPC for procuring banana for exports, but these arrangements could not last long. One of the main
reasons for discontinuation of this tie-up was also because farmers did not supply Banana on pre-fixed
price, as prices in domestic market had gone up.

Secondly, farmers in the area have started opting for production of local varieties (such as Yelki,
Nalipovam, Red Banana) compared to Grand Nain variety, which is preferable in the export.

For promotion of exports through FPCs, the management highlighted that long term planning is must
for preparing crop for export. Production practices at farm need to be started at least six months
before harvesting for preparing export quality banana. This also requires extra input and manpower
which adds to the production cost. Therefore, banana export is only viable, if the purchase prices from
farmers, for exports are at least Rs. 1 – 2/- higher than the domestic prices.

For targeting European markets, FPC representatives also demanded that market development
activities shall be initiated for promoting and establishing local varieties. Some small experimentation
had been done in past for market-testing of Red Banana in Austria. Similar experimentations are
required at large scale for promoting exports of local varieties.

Learning and experience of FPOs in export 23

 Interaction with Tamilnadu Banana Producer Company Limited and field visit

APEDA (Chennai) –
During discussion with APEDA officials, Banana is one of the key agricultural products for export from
Tamil Nadu. Currently, Grand Nain (G-9) is the most common variety in export. Under the Agri Export
Policy three major clusters have been identified, namely Thenni, Trichi and Polachi (near Coimbatore).
In Thenni cluster, good area has been covered under the G-9 variety, but in other clusters, local
varieties are grown predominantly. From export perspectives, local varieties have two major concerns,
One, there is limited market acceptance for local varieties in Europe and other export markets and
Two) the shelf life of local varieties are shorter and it becomes difficult to export these varieties.

As per APEDA officials, training and adoption of Good Agricultural Practices (GAP) is one of the
important areas for intervention to ensure quality of production, which can be accepted in the
markets. For promotion of GAP at ground level, there is need for active cooperation from the
Department of Agriculture at the district level and by the field officials. Field officials of the
Department also need awareness about the export requirements, their role in facilitating the export
as well as for smooth documentation at the field level. APEDA has facilitated development of a modal
banana farm of 100 acre in Thenni cluster for promotion of GAP certification and production.

Need has been highlighted for developing demand in European markets for local varieties. Given that
area under G-9 varieties is decreasing due to various reasons, including spread and vulnerability of G-
9 variety for TR-4 disease, which has become a global concern amongst banana producers. APEDA is
planning a proposal for conducting a trial consignment of Nandrin variety of banana to Austria. For
this particular consignment, buyer has already been identified who has given his consent for trying a
new variety in Austrian market.

Visit to APEDA office, Chennai Visit to TABIF, Tiruchirappalli

Tiruchirappalli Agribusiness Incubation Forum (TABIF)–

In Tamil Nadu, Tamil Nadu Agricultural University (TNAU) has promoted Agribusiness Incubation
Forum at Madurai and at Tiruchirappalli. These incubation forums are working with agri-startups,
entrepreneurs as well as with the FPOs in the state. Visit was made at TABIF to meet CEO and to
understand its role in promoting FPOs for export was explored. TABIF has been helping FPOs in
developing marketing strategy, branding and provides support for developing value added and
processed product, if any FPO would like to explore these areas.

TABIF has been organising regular training programmes and interaction events between FPOs and
start-ups in the area. These events also include meetings with officials of various departments
including APEDA.

Learning and experience of FPOs in export 24

Conclusion:
From interaction with FPCs in different parts of the country, agencies engaged in promotion of exports
as well as supporting promotion and development of FPOs and other stakeholders in the export value
chains, some key observations have emerged. There are few general observations and others,
highlighting driver for FPOs to get into export and Barriers.

• Different FPCs have different organisational, financial, marketing and business capabilities. For
example, amongst all the FPCs visited, Sharmjivi Orange (Warud) has relatively better
organisational structure (permanent staff) and access to finance (Credit from bank) and Trisagar
has good marketing and business capabilities (professional approach and qualified BoD).
• Capabilities of FPCs are directly correlated with few factors, important amongst these factors are
involvement of member farmers in FPCs business activities, FPCs’ governance structure,
leadership team, exposure of FPC’s leaders (BoDs and CEOs).
• There is wide scope for increasing member farmers engagement in the FPC’ business activities.
While interaction with all the FPCs, it has emerged very clearly that the patronage level amongst
all the FPCs is very less. This is one of the most important factors, due to which the FPCs are unable
to achieve desired economies of scale as well are incapable to bring operational efficiencies and
needed business margins.
• Most FPCs are interested in doing risk-free business. In case of exports also, FPCs which are
engaged in export value chain are more interested in selling the produce at a fix price at their
pack-house / aggregation centre to the buyers / exporters, which reduces the logistics and market
risks.
• Most FPCs, either do not have or have only limited exposure and understanding of market
functioning (be it domestic or of export markets). They are not very well trained in negotiation,
accurately calculating marketing costs (limited knowledge of costs involved in marketing, such as
time cost, capital cost, arbitrage, discounts etc.) and considering factors in determining pricing.
• Lack of confidence amongst FPC management / leadership brings hesitation in exploring new
markets and business avenues.
• In addition to lack of availability of disposable funds and capital for business activities, complex
governance structure, lack of experience of FPC promoting agencies in dealing with financial
institutions restricts the FPCs in availing finance through market mechanisms.
• Most FPCs management are not aware of quality parameters, preferences for crop varieties,
documentation processes and other prerequisites for participating in the export markets.
• While visiting the FPCs, one common thing which emerged is that no FPC, except Sharmjivi Orange
(Warud) are able to afford any permanent manpower on their parole. In absences of dedicated
manpower for handling operation, marketing and business development etc., it cannot be
imagined that FPCs will be able to develop or serve the market demand, be it for domestic or
export markets.

Drivers for getting into export:

Following are the key drivers for FPCs to explore opportunities in export markets -

• For maximum number of FPCs, major driver for getting into export is for realisation of better prices
for their produce.
• There has been special drive from APEDA to sensitize FPCs to get into exports and due to this
sensitization also, some of the FPCs have started exploring avenues in export.
• Availability and access to quality infrastructure for facilitating export is also one key facilitator for
FPOs to enter into export business.

Learning and experience of FPOs in export 25

Barriers for FPOs to get into exports:
Although, some of the FPOs are trying to export agricultural commodities and explore better
marketing options for their member farmers, however, at this stage, FPOs are facing multiple
challenges.

• One of the major challenge and barriers to export is limited knowledge of export markets, quality
parameters and export processes amongst the FPOs’ management and employees.
• As the FPOs have limited financial strength, they have limited ability to take marketing risk and
therefore are generally afraid of getting into uncertain markets.
• Most FPCs do not have access and availability to quality infrastructure for taking-up exports. For
targeting exports, specifically to European markets, it requires APEDA certified pack-house facility.
However, people involved in FPC management are not aware of these requirements.

With this background, the recommendations proposed in this study will try to address some of these
issues highlighted here as well as issues and challenges emerging out of analysis of export value chains
from FPCs perspective.

Learning and experience of FPOs in export 26

5. Challenges and key learnings
Department of Commerce, Ministry of Commerce and Industry, Government of India has come up
with an agriculture export policy. The Policy has been framed with a focus on agriculture export-
oriented production, export promotion, better price realization to farmer and synchronization within
policies and programmes of Government of India. Under the new agriculture export policy, there are
two categories of recommendations, namely strategic and operational have been proposed. Under
the strategic recommendations, thrust has been given on Stable trade policy regime, reform in APMC
Act and streamlining of regulated markets. Other strategic recommendation includes robust
infrastructure and logistics; holistic approach to export, greater involvement of state governments in
export promotion etc. Under the operational recommendations, thrust has been given on cluster
approach; promotion of export of value-added products, including value addition in indigenous
commodities, organic, research & development activities and skill development; marketing and
promotion of “Brand India”; attraction of private sector investment in export infrastructure; focus on
quality regime and various other recommendations.

Now, if FPOs are analysed from perspective of recommendations made under the agriculture export
policy, there seems a certain extent of alignment for promotion of agricultural exports through the
FPOs as enterprises. However, based on the current study and interactions with various stakeholders
across export value chains, it has also emerged, that the FPOs may need support beyond the
recommendations of agricultural export policy or at least some of the recommendations may need
customisation for the FPOs. Additionally, there are areas, where interventions from other agencies
can contribute in making FPOs export ready. Table below, is an attempt to capture the involvement
of FPOs in export value chains and challenges being faced by these FPOs in active participation in
export markets. Some of the areas highlighted in the table are directly linked to the exports and others
are indirectly impacting the export capabilities of the FPOs.

Learning and experience of FPOs in export 27

 S.
Activity / Stage Current Status Challenge Recommendation area
No.
Although, the FPOs have BoD in place, In absence of paid permanent staff,
however most FPOs do not have any most FPOs are unable to conduct their In current government scheme of
permanent staff and technical manpower business in full time manner. It restricts promoting new FPOs, provision has been
FPO
to run the FPOs’ business on full-time in conducting regular meetings (of BoD made for salary of CEO and accounts
1 management
and members) and fulfilling regulatory manager. Similar support mechanism is
and governance basis (except for Shramjivi Nagpur
and compliance related requirements. needed for existing FPOs to bring them at
Orange growers Producer Company
This impacts business planning and a level of financial sustainability.
Ltd.). execution activities of the FPCs.
FPOs do not have inhouse technical
FPOs need to be introduced and
expertise to guide member farmers on
No FPO was found engaged with its collaborated with institutions (such as
crop planning and selection. Further,
member farmers in production planning KVKs, ARS) and private sector companies
selection of crops and production plan
Production related activities, such as selection of (providing online crop planning and
2 for exports, need specialized
planning crops, fixing of crop cycles, selection of extension services). These collaborations,
knowledge as per the market
crop varieties, working on scheduling the initially, can be project based and
requirement, which, in general is note
crop as per market inputs etc. thereafter can be on service charges
available even with local institutions
based.
such as KVKs etc.
Production advisory, from export
perspective need advice on GAP practices, – Lack of awareness and knowledge
which are some codes, standards, about GAP is a big challenge at the
regulation followed in Farm Practices. field level.
New age start-ups in area of digital farm
In general, FPOs do not have capability – Secondly, not many agencies and
advisory, need to be brought on board
and trained manpower to support institutions are present in field,
for partnering with the FPCs. These types
Production farmers on adapting to improved who can support FPOs in adoption
3. of partnerships can also help FPCs in
advisory production practices as well As for the and training on the GAP practices.
bringing individual members’ farms on
GAP. – Thirdly, as it was highlighted by the
traceability platforms (e.g. HortiNet,
FPOs, those who are striving to participate other stakeholders, adoption of
Peanut.net, TraceNet, Basmati.net etc.)
in export markets expressed their GAP and certification involves cost,
limitations in this regard and others were which is relatively higher for small
just not aware of the requirement of GAP and marginal farmers to afford.
and its processes.

Learning and experience of FPOs in export 28

 S.
Activity / Stage Current Status Challenge Recommendation area
No.
– FPOs need to get dealership /
distributors license from major
input companies (seed, pesticides,
fertilizers). In major markets, there
is competition for getting dealer /
Out of five selected FPOs, three are
distributor license for good brands – Technical training on knowledge of
engaged in agri-input supplies, such as
and quality product manufacturing agri-inputs (validity, quality
seed, biofertilizer and growth promoters
companies; parameters, basic knowledge of
to their member farmers.
– Input business, with a complete molecules), permitted and banned
However, the input supply business of
product basket needs good amount chemicals for exports, scientific
these FPOs is very small. In most cases,
of working capital, for advance manner of input usage etc. to add to
3. Input supply these are trading of unbranded, locally
booking of the products for season advisory to the farmers and enabling
packed input (e.g. OP variety seeds,
and long credit period at farmers’ in taking informed purchase decision.
growth promoters etc.) which are not
end. However, most FPOs have – Training and capacity building on
famous brands and are manufactured by
highlighted issue of finance and running the input businesses (credit
local suppliers.
availability of working capital. management, negotiations, availing
For targeting exports, quality input for
– Due to poor financial management, discounts).
crop production is a prerequisite.
FPOs are unable to compete with
the Private input retailers / dealers,
who give huge discounts and
longer credit periods to the
farmers.
This is one area, where all the FPOs have – Lack of understanding of quality of
been performing relatively in better product leads to high level of – Technical training on quality
manner. Most private sector enterprises, rejections by the buyers / parameters of the products.
traders and exporters also would like to exporters. – SoPs for operating Pack-houses and
Output
4. work with the FPOs for getting product – FPO procures all grades / quality other marketing infrastructure.
Aggregation
collected and for FPOs’ reach to the (mixed lot) of products from – Mechanism for verification of buyers
farmers for aggregation. farmers, however, exporters want to build trust and to avoid payment
Procurement through FPOs provide a big only the selected quality (A grade) defaults.
advantage to buyers / exporter, as local of product. FPO, therefore, need to

Learning and experience of FPOs in export 29

 S.
Activity / Stage Current Status Challenge Recommendation area
No.
presence of FPOs and their credibility look for alternate local market for
amongst farmers, can help in getting a selling of left out product. Many
certain credit period. times, if the ratio of quality (A:B:C
Secondly, procurement through FPO also grade) is not as per the assessment
provide risks cover for issues relating to of FPO’s procurement team (higher
handling farmers (e.g. payment disputes, ratio of B & C grade), it causes
quality disputes etc.) losses for the FPO.
– Other stakeholders in the trade
have also highlighted the payment
risk for the FPO from the buyers.
Out of seven FPCs, with whom
– FPC's do not have sufficient capital
interactions were held, five FPCs have
to invest in infrastructure such as
been doing primary value addition to the
collection centers, aggregation
products before supplying it to the
centers pack-houses for primary
exporters. Basically, these FPCs are doing – Financial support for creating quality
value addition.
sorting, grading and packaging of the infrastructure.
– FPCs, having limited exposure and
products as per the requirement of – Technical Support for creating
inadequate idea of design
exporters. However out of these 5 FPCs Facilities, such as pack-houses as per
parameters for export oriented
only one FPC has it's own Pack House. All the technical designs recommended
infrastructure.
Primary value others have either been working from for handling exports and shall be
5. – Operation of facilities such as
addition rented facilities or conducting these accredited by the APEDA. In case of
collection centre, pack-houses and
activities at field from make-shift targeting exports to Europe, these
other infrastructure need technical
arrangements. facilities sometimes need
teams, having idea of product
In most cases, the sorting, grading and accreditation or certification from
quality parameter, product
packing activities have been done under designated agency from the
handling and storage protocol,
the supervision of the buyers / importing countries.
documentation process etc., which
representative of buyers. FPCs do not
is not readily available with the
have required manpower in the field to
FPCs.
supervise these activities and ensure the
quality of the product as per the

Learning and experience of FPOs in export 30

 S.
Activity / Stage Current Status Challenge Recommendation area
No.
requirement (except for Sharmjivi Orange
FPC).
Transportation and logistics are big
challenges for the FPCs in the landlocked
area such as Uttar Pradesh. Currently FPCs – High cost of transportation from
in Uttar Pradesh are paying much higher pack house to the nearest port is
transportation charges as they need to making the product price
– Financial support for creating logistic
Transportation bring empty containers from distant uncompetitive in the market.
6. infrastructure, until certain minimum
and logistics locations. Other FPCs also highlighted – Sometime uncertainty of availability
level of volumes are achieved.
challenges of transport of products from of vehicle create problem for the
farms to the pack-houses. Unsuitability of FPC in meeting committed
available vehicle for transportation of deadlines.
perishable products causes quality
damage.
– Lack of data and business
Marketing of member farmers produce, in
management skills of the FPC
a collective manner, is the one key area,
management (e.g. assessing
on which, the FPC's have been
availability of product, seasonality,
conceptualised and established.
market networking and market
Theoretically, FPC management including
trends and practices);
BoDs and CEOs shall take proactive – Need is to create an institutional
– Absence of market information and
actions for product marketing. However, support mechanism for export
intelligence for taking market
Marketing and in most cases marketing activities by FPCs business facilitation. (to support
7. decision.
exports are result of push from the external market information, intelligence,
– Absence of dedicated staff for
agencies, instead of drive from within. marketing support, verification,
market network development and
For exports, in Uttar Pradesh, it was the market linkages etc.)
marketing operation.
efforts of APEDA, which led to tie-up of
– Lack of exposure to export market,
FPCs with the exporters for aggregating
process of export, documentation
and supplying the products. In
requirement.
Maharashtra, again it was only a single
– Inability to take market risks
demand from a buyer for export.
(rejections / quality risk, price

Learning and experience of FPOs in export 31

 S.
Activity / Stage Current Status Challenge Recommendation area
No.
It was observed that there has been fluctuations, payment recovery
limited efforts from FPCs to work on the etc.)
marketing and export actively and
strategically. The current approach is not
a sustainable approach in long-term.
All the FPCs have highlighted availability
of fund and access to credit a big concern
in their growth and business
development.
Out of five FPCs which were selected for
interaction, four have got funds under
different government schemes for capital – Lack of access to credit for working
expenditure (setting-up infrastructure for capital requirement. – Handholding support, through a
seed-processing, pack-house, – Poor financial management at FPC technical agency in preparing strong
warehousing or any other infrastructure). level is restricting development of business plans, project reports /
Financing value
8. However, all the FPCs have limited or no positive credit history. bankable projects, accessing bank
chain activities
access of credit from financial institutions – Very high interest rate of credit finance and other possible
for working capital requirement. from NBFCs is making it very costly partnerships for availing capital at
It was highlighted that any loan from for business purpose. affordable rate.
financial institution need collateral
guarantees from Directors (as FPCs do
not have any mortgageable fixed assets
of their own). Given that bank officials
are not much aware of credit guarantee
scheme of Government of India, many
times they are not processing the loan.

Learning and experience of FPOs in export 32

In above analysis of status and challenges of FPCs, some of the issues look more generic in nature (of
governance, management, capital, technical know-how etc.), however, all these challenges have
direct impact on ability of an FPC to participate in export.

Charting a new course – a case of exporting Mango to United Kingdom by GujPro –

Gujpro Agribusiness Consortium Producer Company Ltd. (GUJPRO) is a federation of FPOs formed to
advance the business and policy interests of FPOs in Gujarat. GUJPRO in the role of a state level
producer Company use market-based strategies to enhance the livelihoods of small and marginal
farmers, use their collective strength to negotiate with market players like manufacturers, suppliers
of goods and services, technology providers, traders, processors, financial institutions, service
providers, etc. The idea is to enhance the income and knowledge of the farmers, thus making
agriculture a viable and profitable profession. The company was registered on 31st October 2014,
under the Companies Act 2013. Currently, the company (as federation of FPOs) has 30 FPOs as its
shareholder members and >20 FPOs as associates with whom Gujpro is directly engaged with. The
partners of GUJPRO are in different regions of Gujarat which includes Saurashtra region, Kutch, North
Gujarat, Central Gujarat, South Gujarat and Tribal areas of the state. Diversified set of crops are grown
in these regions and the partners are involved in varied types of business activities.

GUJPRO is engaged in various businesses, such as aggregation and processing of groundnut, trading
of grains & pulses, seed business and marketing of horticulture crops. During the year 2020, Gujpro
supplied processed peanuts to more than 10 different firms. Company also use online trade portals
and NEML spot exchange for marketing and sale of groundnut and processed products. In horticulture,
Gujpro is into marketing of only two horticulture commodities at present i.e. tender coconut and
mangoes. While the company has been marketing mangoes directly to customers since last four years,
it as also tried to explore exporting of mangoes to European markets.

Initiation of export:

Gujpro has always believed that working on value chains to enhance the value of produce through pre
and post-harvest interventions will enhance the value of the farmers produce and he/she will get
better price for the same. Since, company had its presence in Saurashtra region, mango from Gir
region has been identified as a potential product to market in domestic and export markets.
Therefore, when the company got the opportunity to export mango to Europe, the management
started working on this opportunity meticulously. Export planning and export involved following
activities -

● Gujpro got a demand for mango from a London based importer and after initial discussion a face-
to-face meeting was organized with the importer in Ahmedabad for detail understanding on trade
terms.
● Gujpro decided to export Kesar mango and for this, at back-end mango farmers were identified
and the fields were registered with APEDA. Kesar mango farmers were registered in Talala and
surrounding area.
● Mango procured from registered farmers was processed at a pre-identified Pack-house in
Saurashtra region. This was a new packhouse and was providing services for exports for the first
time.
● Gujpro organized its packaging material, and each box was packed with 12 mangoes, weighing
approximately 3.0 – 3.30 Kg.
● The mangoes were exported from Ahmedabad airport to Heathrow airport.

Export experience –

Learning and experience of FPOs in export 33

● Gujpro team had spent a lot of time on finalizing the packaging box for export, however, given
that this was first experience of export for the whole team, there was lack of understanding on
technical aspects of strength of boxes. This resulted into inferior quality of boxes and boxes got
damaged by the time it reached to London.
● The packhouse operator was new in business and did not have experience of mango processing
for export and specifically for exports to UK, hence, the packaging team made many mistakes
while packing and damaged the first lot completely. Since the company had commitment with
the buyer, it purchased a second lot and prepared it for export.
● Inadequate knowledge of pack-house operator about post-harvest management, therefore of
mango ripening process, reduced marketability of mango in the market. The fruits appeared
green even after seven days of ripening. This should not have been the case, if an experienced
operator would have handled the fruit ripening process.
● With initial damages, the Gujpro team also got to know of importance of selection of right
quality of mango at orchard itself. Adhering to adequate parameters such as water content and
TSS level are very important for ensuring product quality till it reaches market.
● For saving on the transportation, Gujpro team sent packed mangoes in normal container,
instead of refer container from pack-house to airport, due to high temperature, quality of fruits
got deteriorated to some extent.
● Selecting reliable business partners, such as logistic services provider, pack-house operator is
very important for making export business a success.
● High transport cost through refer truck (from Gondal to Ahmedabad airport) is a big deterrent
for remaining price competitive in the market.
● Air freight charges from Ahmedabad to London is very high due to limited air connectivity. This
needed booking of cargo space well in advance. In air cargo, Gujpro had to compete with
pharma companies for booking the space.
Key Learnings -

● Sourcing of quality products is the most important task in this whole supply chain. This needs
technical / scientific and practical training of procurement team.
● FPO shall select technically sound business partners for various services and packaging
material etc. Preferably, the logistic service provider, box manufacturers should have
experience of working with exporters in past and shall be aware of consequences, if anything
goes wrong.
● FPO management and its team shall be trained on post-harvest management, customized
SoPs of pack-house and all other associated operations. Preferably, the packhouse shall be
owned by the FPO.
● For exporting horticultural products, cold chain should be maintained throughout the supply
chain. Only than the quality of the produce can be maintained till it reaches to end consumer.
● FPO team shall have capability of planning all the activities at micro level in advance and there
shall always be back-up plan to address issues related to quality, fulfillment commitment at
market end, price commitment at farmer end etc.

By experiencing a full cycle of export trade and by burning its hand, GujPro is now better prepared
for targeting the export market and is planning again to take-up export in scaled-up manner during
next season.

Taking exports to a new hight – a case of Sahyadri Farmers Producer Company:

Sahyadri Farmers Producer Co. Ltd (SFPCL) was incorporated in 2010, Nashik, Maharashtra based in
Sahyadri which is a 100% farmer owned and engaged in procurement, post-harvest management,

Learning and experience of FPOs in export 34

processing, storage, logistics, marketing and sale of fresh fruits, vegetables and processed foods like
aseptic/frozen fruit pulps, purees, IQF fruits & vegetables etc. in domestic and international markets.

SFPCL also provides technical support, financial assistance, farm input supply and other allied services
to the member farmers. FPC has 7900 plus shareholder farmers, spread in around 120 villages in
district of Nashik. These farmers are engaged in production of various fruits & vegetables on more
than 24000 acres of farmland 6. The company also has retail presence through its 18 retail stores (8
own stores and 10 exclusive franchise) in Nashik & Mumbai for selling fresh fruits, vegetables and
other processed foods in domestic market. Sahyadri Farmers Producer Co. Ltd is the largest FPC in
export of fresh and processed products from India, mainly table grapes, to Europe, USA, Middle East
and Asia. The bulk of income of the company comes from export of grapes to countries like USA,
Europe and West Asian Countries.

FPC started exports of

Exports by Sahyadri FPC (No. of Containers) grapes, as soon as it was
2000 formed. There has been
1481 consistent growth in the
1500
1150 1162 export, which was started
904 with 156 containers in year
1000
625 570
450 2011 and had reached to
500 221
156 1481 containers in year
0 2019.
Yr. 2011 Yr 2012 Yr 2013 Yr 2014 Yr 2015 Yr 2016 Yr 2017 Yr 2018 Yr 2019

Individuals’ vision led to formation of an institution -

Sahyadri Farmers Producer Co. Ltd is the realisation of idea and vision of Mr. Vilas Vishnu Shinde, a
Post-Graduation in Agricultural Engineering and a first-generation entrepreneur. Mr. Shinde himself
has been a grape farmer and had dream of becoming an exporter to get maximum realisation for hi
farm produce, by eliminating the intermediaries in the export supply chain. At initial days, he sold his
grapes directly to exporters, bypassing the export agents, and later he started procuring from his
fellow farmers, to attain economies of scale and for better bargaining and slowly he himself become
an exporter.

In year 2010, he came-up with the idea of forming a Farmers’ Producer Company, where all the fellow
farmers become shareholder and by doing so, he envisioned controlling the complete supply chain of
export starting from production, productivity, quality, cost of production, bank finance, risk
management, post-harvest and marketing. FPC acquired its own land at Mohadi (in Nashik district)
and established state of the art Pack-house and Food processing facility, which is now of the most-
modern pack-house in the industry. Spread over 90 acre of the land, the facility has installed capacity
of handling 800 MT / Day for Exports, Domestic, Processing & Consumer Products for all the major
fruit and vegetables. In this manner, he could bring better predictability and could develop sustainable
supply chain. In 2015, SFPCL has overtaken Mahindra Agribusiness to become India’s largest grape
exporting company. For further diversifying the business and markets, FPC added retail division, food
processing and agri-inputs division at the later stage.

Today, the Sahyadri FPC is one of the largest exporters of the grapes from India. The FPC has scaled-
up its operations, with steady growth reported year-on-year and moving to better margin based

6
https://www.sahyadrifarms.com/

Learning and experience of FPOs in export 35

processed foods and retail businesses. The company’s operating income grew at a CAGR of 27% in last
five years and stood at Rs.532.6 crore in FY2021, encouraged by increase in sales in export market as
well as domestic market.

There have been multiple challenges in this journey, which the FPC management has overcome
collectively.

Success Factor –

Today, Sahaydri Farms has become a popular brand and a benchmark FPC competing big corporate in
export as well as in domestic market. Some of the key success factors of Sahyadri are as under –

a. A visionary leadership, who had clear objective and ability to widen the vision as the FPC grew.
b. Successfully organising required capital for huge investments in infrastructure as we well as
mobilising working capital for financing trade and exports.
c. Adopting to intensive member farmers engagement model (advisory, finance, market
linkages, inputs, marketing solutions for non-anchor crops of the FPC and significant profit
sharing with the member farmers).
d. Adopting to and investments in new technologies relating to operation (pack-house) and
management (adoption to IT options for efficient management) to remain competitive in the
market.
e. Continuous exposures, by meeting all types of stakeholders and new business partners across
globe.

One important thing which has emerged very clearly from the inputs from field visits, interaction with
various stakeholders, from the secondary research (learnings of various other institutions) and case
studies of Sahyadri Farms, that the FPCs have strategic advantage in organising back-end for exports.
FPCs can leverage, their linkages with the farmers, can work on improved production practices, can
organise aggregation activities efficiently, and can also organise post-harvest and pack-house activities
for exporters. However, for Exploiting full potential of this strategic advantage, FPCs need to be
strengthened in the desired manner and they need to overcome their existing challenges and
weaknesses. The approach and strategic recommendations for realising their potential has been
discussed in the next chapter.

6. Recommendations and way forward

Exporting agricultural commodities (including fresh fruits and vegetables), requires relatively higher
standards of food quality, safety and environmental sustainability aspects. To ensure these
requirements are fulfilled, exporters need to comply with the regulations of importing country and in
many cases need certification from various accrediting agencies. One of the most common

Learning and experience of FPOs in export 36

parameters, which has been put in place to minimise the health and environmental risks, is maximum
residue level for pesticide in all the food products. Exporters not only have to comply the MRL levels
with the government regulation /European Union regulations, but many times they also need to
comply the parameters set by the importer / supermarkets buying the product.

Managing MRL levels requires monitoring of use of pesticide during the production period. In some
cases, buyers also ask for spraying schedule and molecules used as pesticides. Global GAP certification
has also become a pre-requisite and this can also resolve many requirements of importers (e.g.
Traceability, record keeping, site history, spray schedules, workers and environment related issues
etc.). Export to Europe laboratory testing of material (plot / lot) to comply with health and
phytosanitary related issues. In this case, importer sometime also suggest the exporters to get the
product tested from a recommended laboratory only. Mandatory certificates are also issued by the
local authorities. Exporter must familiarise himself / herself with the phytosanitary rules for particular
country, certification requirement from the buyers as well as documentation process.

There are also regulations and standards relating to packaging (such as packaging material to be
used, labelling etc.) and marketing. Above background explains that for targeting export to Europe,
the whole process from production to marketing has some or other regulation and also need wide
range of certification, documentation to comply with.

Therefore, any FPOs, which would like to

target the European markets for their
produces, must have capabilities to comply
with these requirements. Now, based on
discussion with various FPOs and other
stakeholders, it has emerged clearly that
each FPO has different capabilities and
business maturity and will need different
strategy to make them export capable.

For developing the strategy to strengthen

the FPOs to participate actively in export,
the FPOs can be divided into four categories,
based on two-by-two matrix. From their
capability perspective, two-by-two matrix
can be developed based on two major
parameters, on X-axis FPC’s management
capabilities (which broadly can have
qualified BoDs and CEO, proven track record of adopting to governance processes, such as regularly
organising BoD meeting, filing of RoC documents etc.) and Y-axis can depict FPC’s financial strength,
which is mainly availability of equity (may be due to large membership base), access to fund
(government subsidy etc.) and access to bank loans. FPCs, which were visited under this assignment
can be placed in this matrix as under –

Learning and experience of FPOs in export 37

 Jaya Seeds Farmers’ Producer Company Shramjivi Nagpur Orange Growers Producer
Financial strength and infrastructure Limited (Varanashi) Company Limited.
Ishani Agro Producer Company Limited - Full time CEO and permanent staff.
(Varanashi) - Own pack-house.
Western Ghats Farmer producer Company
- Growing business turnover.
Limited (Theni)
- No full-time professional staff, BoDs are
- Supplier to most organised / online
retailers.
family members.
- Good amount of fund has been received
under state government scheme for
setting-up processing and warehousing
infrastructure.
Farmer’s Delight Agro Producer Company Trisagar Farmers Producer Company Limited
Limited - Qualified Chairman / Promoter of FPC
- FPC management does not have any - Good experience of dealing with
idea of future action. organised sector players / exporters.
- Solely depend on external assistance for - No infrastructure ownership.
decision making.
- Unable to start any business due to
paucity of fund.
Management Capability

Strategic Approach for FPOs export capacity building –

In India, there is a campaign and dedicated programme being run by the Government of India for
promoting FPOs and additionally, various other agencies are also engaged in promotion of FPOs. In
various studies by different institutions, it has emerged that many all of these FPOs may not attain
business sustainability in near future. Many of these FPOs will have issues relating to governance,
finance, legal and operation. Therefore, for implementing any strategic intervention, it becomes a pre-
requisite to shortlist and select FPOs, which
qualify certain criteria for becoming eligible
to be brought under export capacity
building initiatives.

Once selected, the FPOs shall be provided

operational and/or institutional support.
Operational support shall be for improving
exportability through interventions in the
supply chain activities, starting from
production, aggregation, value addition and
export; and Institutional support shall be
providing parallel support for convergence,
partnerships and business facilitations.
Based on this approach, detail
recommendations for preparing FPCs have been discussed in the following section.

Specific recommendations for strengthening of FPOs for exports to Europe –

A. Shortlisting and selection of FPOs -
Most FPOs will not have suitability for getting into export business, only a few will either be interested
or will be suitable for the export businesses. Therefore, careful selection of most suitable FPOs will be

Learning and experience of FPOs in export 38

important aspect for ensuring higher rate of success and effective use of resources available. Suitable
FPOs can be selected based on following criteria –

Particular Description
Members FPOs which are producing crops / products, suitable for export or are ready
producing or willingto work on diversifying into export-oriented crops, shall only be selected for
to produce export extending support and capacity building.
market-led crops / For this, agency shall get a preliminary assessment done based on crop-
products profile of FPO’s catchment area and of member farmers.
Assessment of leadership of an FPO shall be done in more professional
manner and objective driven, instead of a mechanical / theoretical method.
Capable leadership Education qualification shall not be a sole criterion to define the capability of
at the helm an individual. Therefore, the assessment of BoDs, CEO and Managers shall be
done in a professional manner, wherein their aptitude and desire towards
growth is considered and weighed.
Selected FPO shall either have significant membership base and area under
production or shall be willing to increase the membership to ensure
availability of minimum required quantity of produce. There is possibility,
that at current stage, the FPO may not have the required quantity produced
Potential for
by its member, however, there should be potential for increasing it to
scalability
targeted level over period.
Another approach of shortlisting of FPOs on this parameter can be based on
crop-cluster, wherein multiple FPOs can be selected in a contiguous area for
achieving desired level.
FPO management and its member farmers shall have progressive outlook
and shall be willing to adopt to new package of practices, SoPs,
Willingness for documentation requirement and other changes needed for exploring export
adoption to change as a potential business. Readiness to accept the change is a critical factor and
shall be gauged very cautiously by the agency before on-boarding any FPO
for interventions.

Once FPOs are selected based on above parameters, they shall further be divided into categories, as
mentioned in the previous section of this chapter. Based on categorisation, mix of operational and
institutional interventions targeting each FPO can be selected.

B. Recommendation on Operational interventions -

Strategy for enhancing export capability of FPO will need support along with the export supply chain
of the product. As it has been discussed in earlier sections, export to Europe requires comprehensive
checks on product quality and traceability, across supply chain, starting from field to until the product
reaches end customer. Secondly, from interaction with the FPOs, it has also emerged that most FPOs
are comfortable on taking-up back-end activities of production, aggregation, sorting-grading,
packaging etc. FPOs have expressed their keenness to supply material to exporter at pack-house
instead of directly participating in export; to avoid uncertainty and risks associated with the markets.
However, over period, as FPOs get exposure, they may get interested in involving themselves in direct
exports as well.

The interventions for supporting FPOs for strengthening them for export shall be complementing the
efforts of existing agencies working with the FPOs (as sponsoring agency or promoting agency). Also,
the interventions shall explore convergence with initiatives of various agencies providing technical
and financial support. Given this background, the focus of operation related interventions shall be

Learning and experience of FPOs in export 39

focused more on production and post-harvest level. Some of the specific interventions have been
proposed as under –

Particular Description
In theory, the FPO shall be working with all its members in close coordination
and shall facilitate technical know-how, farm-services and market linkages
(for inputs and outputs) at an aggregated level. However, in most cases the
engagement level is very low and only few farmers are actively doing any
business through the FPOs.
For targeting exports, scale of operation is important for achieving volumes
as well as for meeting the consistent demand of an importing partner.
Strengthening Therefore, the FPO shall be trained on developing active and participatory
Farmers engagement with the member farmers. Target shall be that atleast 50% of
Engagement members are compulsorily doing business with the FPO.
(Enhancing scale This will need developing services and business models (e.g. production
and sustainability) planning, farm-services (mechanisation, custom-hiring centre) contract
farming, collective / joint farming, quality input supply etc.; which are
financially sustainable and can also start showing immediate benefits to the
farmers.
One of the main reasons for poor engagement is lack of permanent staff with
the FPO. Therefore, proposed intervention shall provide technical guidance
for identifying services / activities, which are financially sustainable and
handholding support to showcase the impact.
While discussion with export value chain actors; mainly the exporters, it
emerged clearly that product quality, traceability and high-level of rejection
at importing port due to MRL level / health and safety related concern; are
key issues for export to European markets. Given that FPOs, relatively have
advantage of organising back-end effectively, due to local presence, they can
be conduct in promoting improved production practices and adoption of
Good Agricultural Practices (GAP / Global GAP).
Promotion and
At individual level, getting Global GAP is a costly affaire, therefore, FPC can
adoption of GAP
facilitate in getting group certification. For this, FPC management and team
and other improved
coordinating with farmers shall be trained and shall maintain internal audit
production
requirements. Additionally, technical training on use and schedule of various
practices
agri-inputs and molecules allowed for use at farm etc.
Such interventions, of promoting improved production practices and Global
GAP can be implemented in collaborative manner, wherein FPOs can be
provided with support of a technical agency, which shall coordinate with all
other concerned organisations such as local authority (Inspection agency,
Government authority and FPO team). This support can be extended until the
FPO team become capable of taking-up activities on their own.
Any FPO, which is interested in exporting agricultural produce to Europe,
need to create infrastructure for sorting, grading, packaging etc., which
comply with technical specification and processes defined by the APEDA and
other agencies of importing country. Post-harvest infrastructure shall also be
Creation of Export- customised as per the requirement of product to be handled (fresh
oriented vegetables, fruits, grains, organic products etc.). Infrastructure is one
infrastructure business, which provides strategic advantages to the FPOs for becoming a
strong link between farm and market.
However, most FPOs and their teams do not have know-how to design and
develop infrastructure, operational procedures and other documentation
requirement. Therefore, FPOs shall be provided technical advisory and

Learning and experience of FPOs in export 40

 Particular Description
guided on setting-up state-of-the-art infrastructure. Assistance, in terms of
preparing detailed project report, engineering layout, vendor selection,
supervision of installation to ensure compliance with technical norms and
training of operation team are essential components of this intervention.
Technical team shall also be trained on other associates aspects, including
training on post-harvest management practices of a product (harvesting
techniques and time, collection in field, transportation from field to pack-
house, storage conditions at pack-house, product handling), logistics,
product sampling, testing, certification, documentation etc.
During interaction with the FPOs, it has become apparent that no FPO
(amongst the selected one) has got any direct exposure or idea of export
markets. A few FPOs, who have supplied material to exporters, have also
conducted operation such as sorted, graded and packed the material in
supervision of exporters team.
Market Exposure FPOs shall see some of the markets (in Europe), first-hand and develop their
own understanding of product quality, packaging type, packaging unit &
material, competing production areas (countries), relative pricing etc.
Direct interaction with some of the end buyers, supermarkets and other
stakeholders can also help FPOs in gaining knowledge of the market trends,
practices, compliances, documentations and other requirements.

For implementation of operational interventions, services of qualified technical agencies (from

Europe as well as from India) shall be hired and medium-term (from 2-5 years) projects shall be
conceptualised.

C. Recommendation on Institutional interventions -

Institutional interventions and strategies are required to further strengthen and ensure sustainability
of operational interventions. The focus of institutional interventions shall be developing institutional
mechanisms, which, once facilitated, are sustainable in nature and can bring continuity of the work.
These mechanisms shall focus on developing partnerships, establishing products in the markets and
setting-up institution for constant upgradation and handholding of stakeholders to remain compatible
and competitive in the market.

Implementation of institutional interventions shall be in the project form at initial stage and shall have
exit strategies with defined objectives over period of time. Some of these outcomes may be evolving
in nature along with evolving markets, regulations, and trade need.

Three specific interventions under this category, namely, multistakeholder partnerships, market
development activity and FPO trade facilitation centre have been discussed in detail.

Learning and experience of FPOs in export 41

Learning and experience of FPOs in export 42
 Particular Description
For developing sustainable export value chains for European markets there
is need for developing strong partnerships amongst importers (Imported
item distribution houses; Super Markets chains; Processors etc.) from Europe
and FPOs in India.
Innovative Based on matchmaking, collaborative projects can be designed, wherein
multistakeholder buyers, exporting FPOs, an intermediary institution for facilitating the
partnerships developmental work and / or any other agency having direct or indirect role,
shall define the partnership along with roles and responsibilities for
everyone. Objective of such partnership should be to work towards target
oriented (quantity or value) export facilitation. A brief concept of this has
been described in diagram below.

Particular Description
For entering European market, from product perspective, two specific issues
were mentioned by the most stakeholders: First, the challenge of adhering
to the quality norms and Second, Lack of market demand for some of the
traditional varieties / crops.
For this, specific efforts are needed, wherein under the market development
Market
project, market development activities shall be planned in targeted market,
development
in collaboration with the FPOs. During field visit, two such cases were
activities
highlighted, wherein such initiatives were taken-up in the past in small ways
(for export of Nagpuri oranges and another one is local Banana variety to
Austria). Under this initiative, following activities can be planned –
- Identification and selection of crop / product / varieties having export
potential.

Learning and experience of FPOs in export 43

 Particular Description
- Conducting test marketing and commercial piloting of exports.
- Facilitating in development of distribution network in importing markets.
- Ensuring placement of product on market shelves and consumer
feedback
- Helping FPOs in developing marketing strategies (packaging, branding,
advertisement etc.)
One big question, which all the FPOs have is, if they want to start export
business to Europe, where should they go for getting basic information?
There are many other questions related to knowing buyers, knowing costs of
exporting, knowing quality requirement and getting introduced to the buyers
at other side of the business.
To answer all these queries, there is need for a FPO export facilitation and
trade centre, which shall organised targeted activities as well as shall
approach to FPOs for creating awareness and facilitating the trade. This
FPO-Export centre shall work in manner, any other trade centre works to facilitate the
Facilitation & Trade trade (organising delegations, buyer-seller meet, virtual programmes,
Centre matchmaking, facilitating partnerships etc.), but the differentiator for such
trade centre is understanding of working with the FPOs.
Under the project, such trade centre can be housed with a capable agency
having experience of working with FPOs, knowing export business and
understanding of compliances, documentation and functioning of various
government agencies engaged in agricultural exports.
Such Export & Trade facilitation centre shall also facilitate FPOs in availing
other supports at local level (e.g. Working Capital, government subsidy etc.)
which can add to export competitiveness.

Under the Indo-German Cooperation on Agricultural Market Development project, different strategies
and sub-projects can be prepared for a time-period ranging from two – five years. Conceptualization
and implementation of these projects shall be in close collaboration with some of the important
agencies including APEDA, SFAC, NABARD, NCDC and other state government agencies.

Learning and experience of FPOs in export 44

Annexures
Annexure: 1 – List of stakeholders approached for the study
S. No. Name Agency Contact number
1. Mr. C. B. Singh APEDA, Varanasi +91 8334905777
2. Ms. Shobana Kumar APEDA, Chennai +91 9013730865
3. Mr. Prashant Waghmare APEDA, Mumbai +91 9538133387
4. Mr. Satish Worade Maharashtra State Agricultural +91 8551954198
Marketing Board (MSAMB), Export
Desk, Pune
5. Mr. Ravindra Pandey Perishable Cargo Centre (Raja +91 8090354436
Talab) & ITC
6. Mr. K N Yadav AGM (Cargo), LBS International +91 8122991184
Airport, Varanasi
7. Mr. Shardool Vikram Director & CEO, Jaya Seeds +91 8896131008
Chaudhary Producer Company Limited
8. Mr. Surendra Singh Chairman, Jaya Seeds Producer +91 9415981940
Company Limited
9. Mr. Ajay Singh CEO & Director, Ishani Agro +91 9198560499
Producer Company Limited
10. Mr. Sashwat Pandey CEO & Director, Trisagar Farmers +91 9310280536
Producer Company Ltd., Badhoi
11. Mr. Dinesh Patidar Procurement Manager, Mother +91 9057207545
Dairy (SAFAL), Varanasi
12. Mr. Ramesh Jichkar Director, Shramjivi Nagpur +91 9823253501
Orange growers Producer
Company Ltd. (Warud)
13. Mr. Kunalsingh Kantilal Chairman, Farmer’s Delight +91 7775896999
More Agro Producer Company Ltd.
(Pandharpur)
14. Mr. Yogesh Godshe CEO, Yeoti Agro Producer +91 9890536453
Company Limited (Pandharpur)
15. Mr. Dinesh Jagdale Leading Exporter (Grapes, +91 8975504030
Pomegranate)
16. Mr. A P Karuppaiah Chairman, Confederation of
Farmers Producer Companies of
Tamilnadu
Chairman , Tamilnadu Banana
Growers Federation
Chairman, Tamilnadu Banana
Producer Company
17. Mr. Ajeethan Managing Director, Tamilnadu +91 9360014352
Banana Producer Company
18. Mr. Sivamani Banana Exporter & Entrepreneur +91 9363272316
(operating Banana Pack-hose)
19. Mr. Aganth Procurement Executive, Desai
Fruits (major exporter), Theni

Learning and experience of FPOs in export 45

Annexure: 2 – Some of the important schemes for FPOs in India
Below list is a comprehensive list, wherein some schemes are exclusively for the FPOs and in other
schemes, FPOs are also eligible beneficiaries in addition to other entities.

S. Name of Name of Organization Brief description

No Scheme
1 Equity Grant Small Farmers Equity Grant Scheme extends support to the
Scheme Agribusiness equity base of Farmer Producer Companies
Organization (FPCs) by providing matching equity grants
subject to maximum of Rs. 15.00 lakh per FPC
in two tranches with in a period of 3 Years.
2 Credit Small Farmers The Fund has been set up with the primary
Guarantee Agribusiness objective of providing a Credit Guarantee Cover
Scheme Organization to Eligible Lending Institutions (Scheduled
Commercial Banks included in 2nd schedule of
RBI Act), RRBs, NCDC, NABARD and its
subsidiaries) to enable them to provide
collateral free credit to FPCs by minimizing their
lending risks in respect of loans.
3 Venture Capital Small Farmers Venture Capital Assistance is financial support
Assistance Agribusiness in the form of an interest free loan provided by
Organization SFAC to qualifying projects to meet shortfall in
the capital requirement for implementation of
the project.
4 Management SFAC, NABARD, NCDC, Administrative and management support cost
Support Cost to NAFED and other of FPO to provide the financial support of Rs
FPOs agencies 18lakh/FPO for the period of 3 years to make
them sustainable and economically viable.
FPOs promoted by implementing agencies are
only supported, as of now self-promoting FPOs
are not supported.
5 Producers National Bank for The Producer Organization Development Fund
Organization Agriculture and Rural (PODF) will be used to support Producers
Development Development (NABARD) Organizations including Producer Companies.
Fund (PODF) The assistance will be provided for the below
type of activities:
• Training/ Capacity Building
• Market Linkage
• DPR Preparation
• Administrative Cost
• Incentive for the Promoting Agency
• Mobilization of Farmers
• Establishment & Registration
• Training to Board of Directors
• Administrative Expenses of PO
• Preparation of Business Plan
• Training to Chief Executive Officer of
POs
• Support to POPIs for handholding/
nurturing of POs

Learning and experience of FPOs in export 46

 S. Name of Name of Organization Brief description
No Scheme
6. Producers’ National Bank for PRODUCE Fund of Rs 200 crores was created by
Organization Agriculture and Rural the Government of India in NABARD in 2014-15
Development Development for building 2,000 Farmer Producer
and Upliftment (NABARD) Organizations (FPOs) in the country. The aim of
Corpus’ the PRODUCE Fund is to promote new FPOs and
(PRODUCE) Fund support their initial financial requirements, to
make them credit worthy, commercially vibrant
and sustainable business enterprise of farmers.
7 ISAM sub DAC&W through The AMI sub-scheme of ISAM is applicable for
scheme -New NABARD new credit linked projects, where term loan has
Agricultural been sanctioned by eligible financial
Marketing institutions from 22.10.2018 onwards. NABARD
Infrastructure is the channelizing agency for release of subsidy
(AMI) @ 25% to 33.33% of the capital cost for
institutions eligible for refinance by NABARD or
any other FI such as State Financial
Corporations (SFCs) approved by DAC&FW.
8 MIDH - NHM DACFW – State Govt, 1. PH Management and Cold chain component
SFAC for FPOs such as Cold storage, Pusa zero
energy cool chamber, Pack house, Precooling
unit, Ripening chamber, Low cost onion
storage
2.Market research and promotion -Rs. 6.00
lakhs to FPO’s.
9 PM Kisan Ministry of Food The following schemes will be implemented
SAMPADA Processing under PM Kisan SAMPADA Yojana :
Yojana Industries (MOFPI)
1. Mega Food Parks Integrated Cold Chain and
Value Addition Infrastructure: Integrated cold
chain and value addition infrastructure projects
can be set up by Partnership/ Proprietorship
Firms, Companies, Corporations, Cooperatives,
Self Help Groups (SHGs), Farmer Producer
Organizations (FPOs), NGOs, Central/State
PSUs, etc. with business interest in cold chain
solutions and also by those who manage supply
chain.

Creation/ Expansion of Food Processing/

Preservation Capacities (Unit Scheme) FPO
engaged or propose to engage in creation/
expansion/ modernization of food processing
and preservation capacities. Eligible project
components for grant includes the cost of plant
& Machinery and Technical civil work.

Infrastructure for Agro-processing Clusters

Basic enabling infrastructure: Includes site
development, development of industrial plots,

Learning and experience of FPOs in export 47

 S. Name of Name of Organization Brief description
No Scheme
boundary wall, roads, drainage, water supply,
electricity supply including power backup,
effluent treatment plant, parking bay, weigh
bridges, common office space etc.

Core infrastructure: Includes food testing

laboratory, cleaning, grading, sorting and
packing facilities, steam generation boilers, dry
warehouse, cold storage, pre-cooling
chambers, ripening chambers, IQF, specialized
packaging, other common processing facilities,
etc.

Creation of Backward and Forward Linkages

a. Backward Linkage:
Integrated Pack-house(s) (with mechanized
sorting & grading line/ packing line/ waxing
line/ staging cold rooms/cold storage, etc.),
Milk Chilling Centre(s) /Bulk Milk Cooler(s), Pre
Cooling Unit(s)/ Chillers, Reefer boats.
Machinery & equipment for minimal processing
and/or value addition such as cutting, dicing,
slicing, pickling, drying, pulping, canning,
waxing, etc.
Machinery & equipment for packing/
packaging.

b. Forward Linkage:
Retail chain of outlets including facilities such as
frozen storage/ deep freezers/ refrigerated
display cabinets/cold room/ chillers/ packing/
packaging, etc.
Distribution center associated with the retail
chain of outlets with facilities like cold room/
cold storage/ ripening chamber.

c. Transport:
Refrigerated/ Insulated transport / Reefer Vans
in conjunction with backward and forward
linkages.
10 Operation Green MoFPI through NAFED NAFED will be the Nodal Agency to implement
Short term Price price stabilisation measures. MoFPI will provide
Stabilisation 50% of the subsidy on the following two
Measures - components:
i. Transportation of Tomato Onion Potato(TOP)
Crops from production to storage;
ii. Hiring of appropriate storage facilities for
TOP Crops;

Learning and experience of FPOs in export 48

 S. Name of Name of Organization Brief description
No Scheme
11 Operation Ministry of Food Integrated Value Chain Development Projects
Greens- Processing through PM Kisan SAMPADA Yojana online
Integrated Value Industries (MOFPI) portal
Chain
Development A. Capacity Building of FPOs & their
Projects consortium
i. Formation of New FPOs in the clusters
selected for TOP;
ii. Promotional Activities, Training/Workshop
of Farmers and FPOs;
iii. Professional Management Support to FPOs
& Federation;

B. Quality production
i. Provision for quality inputs such as seeds;
i. Setting up of Nursery and greenhouses;
ii. Setting up of protected cultivation;
iii. Mechanisation of farm practices;
iv. Promote Contract farming;
v. Varietal change based on market;

C. Post-harvest processing facilities

i. Appropriate storage at Farm level;
ii. Collection centre (CC)/Pack house;
iii. Primary processing such as sorting, grading
and packaging facilities;
iv. Secondary processing – any mechanised
and mobile processing facilities;
v. Appropriate transportation infrastructure;

D. Agri-Logistics
i. Integrated multi-mode appropriate
transportation;
ii. Controlled temperature/ Ventilated trucks
with or without raking;
iii. Crates, rakes etc;
iv. Medium/large scale storage at regional,
state and national level;

E. Marketing / Consumption Points

i. Appropriate storage facilities at aggregation/
market level;
ii. Sorting, grading and packaging facilities;
iii. Setting-up of retail outlets;
iv. Setting-up of marketing yards at the cluster
level;
v. Creation of e-market;
11 Financial The Agricultural and The Financial Assistance Scheme (FAS) is an
Assistance Processed Food export promotion scheme run by APEDA. The
Products Export

Learning and experience of FPOs in export 49

 S. Name of Name of Organization Brief description
No Scheme
Scheme (FAS) by Development scheme aims to facilitate the export of agri-
APEDA Authority (APEDA) products by providing assistance to exporters.
Financial assistance is provided in three broad
areas, namely: Development of Export
Infrastructure, Quality Development and
Market Development.
12 National Small Farmers National Agriculture Market (eNAM) is a pan-
Agriculture Agribusiness India electronic trading portal which networks
Market Organization the existing APMC mandis to create a unified
(e-NAM) national market for agricultural commodities.
13 National Food NFSM- State Govt, SFAC Marketing support for pulses:
Secuity Mission and similar organization 1. Establishment of mini dal mills by farmers,
(NFSM) at Central and State farmer groups or registered FPOs (@ Rs. 10.00
level lakhs, or 30% of the total cost, whichever is
lower, as one-time support)
2. Support for branding and marketing of milled
pulses (available only to registered FPOs @
Rs.5.00 lakh per FPO, for one time support only)
3. Marketing support to un-registered farmer
groups, SHGs, SHG federation etc. for local
marketing of pulses (@Rs.2.00 lakh per group
of 15 farmers, for one time support only).
4. Support to registered FPOs to set up and
equip procurement centres to grade and
process pulses (@Rs.5.00 lakh per FPO for one
time support only)
14 Sub-mission on Through State FPO need to submit proposal to State Govt.
Agricultural Government to 75% grant in aid for purchase of agricultural
Mechanization DAC&FW drone and its attachments for conducting demo
(SMAM) on farmer’s field. Use of ‘Kisan Drones’ will be
Mechanization promoted for crop assessment, digitization of
and Technology land records, spraying of insecticides, and
Division , nutrients.
DAC&FW

Learning and experience of FPOs in export 50

Annexure: 3 - List of MSAMB’s Export Facility Centres:
1. Atpadi, Sangli
2. Indapur, Pune
3. Chandwad, Nashik
4. Khadkewake (Tal. - Rahata), Ahemdnagar
5. Beed, Dist – Beed
6. Warud, Amrawati
7. Irradiation Facility Centre (IFC), Vashi, Navi Mumbai
8. Talegaon, Pune
9. Satara Dist. – Satara
10. Dindori, Nashik
11. Vapour Heat Treatment (VHT), Vashi, Navi Mumbai
12. Nachane, Ratnagiri
13. Jamsande, Sindhudurg
14. Jalna, Dist. - Jalna
15. Agri Produce Centre, Indapur, Pune
16. Ice Making Unit, Indapur, Pune
17. F&V Centre, Indapur, Pune
18. Baramati, Pune
19. Basamatnagar, Hingoli
20. Raver, Jalgaon
21. Ashti, Wardha
22. Latur, Dist. - Latur
23. Kalvan, Nashik
24. MIDC, Talegaon, Pune

These EFCs have following infrastructure components –

A. Pack-Houses
B. Pre-Cooling
C. Cold-Storages
D. Ripening Chambers
E. Material Handling System

Learning and experience of FPOs in export 51

Annexure: 4 - Highlights of procedure of export of Chilli (activities at Packhouse)
(Reference : www.apeda.gov.in )
Packhouse, intended to export chilli from India shall be certified by the APEDA as per its
requirement.

A. Role in sampling of product for testing –

- Packhouses shall apply to laboratories for sampling of green chillies meant for export in the format
of sample slip
- The laboratory shall sample green chillies meant for exports as per method of sampling from the
harvested material at APEDA recognized Pack House or directly from the registered farms.
- In case of samples drawn at the packhouse, the exporter/recognized packhouses shall maintain
segregation of produce in such a manner it should be tracked to the farm(s) or farm(s) following
uniform pre harvest practices and the producing farms are in contiguous area.
B. Responsibilities of APEDA recognised Pack-house
- All APEDA recognized Pack Houses shall maintain record of the farmers of green chillies in such a
manner that the consignment exported can be traced back to the farm. The farm record and spray
record shall be made available to the laboratory representative at the time of sampling.
- Overall responsibility for compliance with the MRLs of importing countries shall be of the exporter
and recognized Pack House(s)
- The recognized Pack Houses shall ensure that each box will carry a label with a Unique
Identification Code (UIC). For example AAA Exports from Mumbai could be AAAPHL000FFF (AAA
denotes the packhouse name, PHL denotes location of packhouse and 000 denoted Packhouse
Certificate Number and F123 denotes farm registration number). The same UIC shall be
mentioned in packages by the exporter.
- Only upon receipt of analysis reports from the laboratory stating that the produce complies with
the market specific such as (i) EU MRLs (ii) GCC-SFDA MRLs, the consignment shall be shipped by
exporter along with Health Certificate and PSC wherever applicable.
- The exporter shall report to APEDA about rejection of green chillies by the importing countries
within a week from the date of such rejection, failing which the pack house would be suspended.
- Onus of maintaining appropriate good practices required by the importing countries shall be of
exporter/packhouse including sorting, grading, handling, processing, packing and transportation.
- Recognized pack house(s) shall maintain detailed log sheet of all the lots and consignments of
green chillies exported from its facility. This needs to be submitted to APEDA as and when required
and can be inspected by APEDA at any time.
- In case of EU shipments, the APEDA recognized pack house(s) shall label green chillies
consignment of each box as per the format given.

Learning and experience of FPOs in export 52

Annexure: 5 – Brief description of discussion with the FPCs
Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
Sponsoring Agency Convergence of NAABRD SFAC SFAC TNSFAC
Agricultural Interventions
in Maharashtra (CAIM),
IFAD funded project
Promoting Agency TCS Yashaswi Agro FAARD Foundation FAARD Foundation Tamilnadu Banana
Producer Company Ltd. Growers Association
(Solapur)
Address of FPC APMC Mandi area, Warud, Ghat No. 180/3, Chale, Village – Jayapur, VPO – Imliya (Via – SAS Garden,
Amravati, Maharashtra Pandharpur (Solapur), Varanashi (Uttar Sayadraja), Chandoli Ganesapuram,
Maharashtra Pradesh) (Uttar Pradesh) Thottiyam (Tamilnadu)
Registration Year 2015 2019 2016 2015 2014
Number of 470 520 400 1000 1000
shareholders
Share Capital INR 470,000/- INR 620,000/- - INR 15,95,000/- INR 20,01,000/-
Financial support INR 93.00 lakh NA INR 100.00 lakh (from - INR 60.00 lakh NA
received (Department of Government of Uttar grant from
Agriculture, Maharashtra) Pradesh) for seed Government of UP
processing unit. for setting-up seed
processing unit.
- INR 3.50 lakh for
Custom Hiring
Centre (CHC)
- INR 5.01 lakh
(Equity grant from
SFAC)
Composition of Male – 5 Male – 4 Male – 4 Male – 4 Total 11 directors
Board of Directors Female – 2 Female – 1 Female – 1 Female – 1
(BoD) Total – 7 Total – 5 Total – 5 Total – 5

Learning and experience of FPOs in export 53

 Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
Incentive / No No No No -
remuneration for
BoDs
Trainings Not applicable Documentation of FPC Seed production - Seed production - FPC management
undertaken by Vegetable production (ICAR & IRRI) and governance.
BoDs - Fisheries - Participated in
- Mushroom various types of
cultivation programmes at
- FPO Governance state level.
and marketing
(BIRD)
Details of CEO • Mr. Ramesh P. Jichkar • Mr. Sameer Sekh • Mr. Vikash Singh • Mr. Harbansh • Mr. G. Ajeethan
• Education – B. Sc. • Educatzion – B. Sc. • Education – MBA Singh
(Agri) • Experience – Nil • Experience – Nil • Education – B. Sc.
• Experience – 35 years (Agri)
in agriculture sector • Employment with Employment with FPC • Experience – 35
• Employment with FPC FPC since last 1 since last 4 years years in agriculture
since last 6 years year sector
• Employment with
FPC since last 5
years

Salary to CEO Yes Yes Nil (working as part Nil (working as part -
(Rs. 25,000/- per month, (Rs. 25,000/- per time) time)
paid by company) month, paid by
NABARD)
Training of CEO • Production Farmers’ Mobilisation No formal training Seed processing (at General training on
enhancement and Documentation of received BHU and IRRI) FPC management.
• FPC Management (3 FPC
days)

Learning and experience of FPOs in export 54

 Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
• Technology
dissemination
• General Training of
Trainers (ToT)
Catchment area of 60 villages 6 villages 20 villages 32 villages 6 PPC
FPC
Decision making Jointly by BoDs and CEO Yet to work on this Informally by BoDs Based on regular BoDs and Managing
system meeting of BoDs and Director jointly takes
CEO the decision
FPC’s asset - Pack-house (equipped NA A seed processing plant - Warehouse Banana pack-house
ownership with sensor-based (Investment of Rs. 1.30 (10,000 MT) (with taken on lease from
sorting, grading line) Cr.) capital investment Tamil Nadu Supply
with an investment of of Rs. 40.00 lakh) Chain Management
Rs. 1.60 Cr. - Seed processing Project for Fruits,
- Mini soil testing lab plant (with capital Vegetables and Other
investment of Rs. perishables.
30.00 lakh)

Business Turnover - FY 2018-19 - INR 60.22 - FY 2019-20 - INR - FY 2018-19 - < INR - FY 2018-19 - < INR -
lakh (no export) 4.90 lakh (no 10.00 lakh (no 20.00 lakh (no
- FY 2019-20 - INR export) export) export)
176.00 lakh (no export) - FY 2020-21 – INR - FY 2019-20 - INR - FY 2019-20 - INR
- FY 2020-21 – INR 7.50 lakh (No 15.00-20.00 lakh 24.00-20.00 lakh
417.50 lakh (No export) (no export) (no export)
export) - FY 2020-21 – INR - FY 2020-21 – INR
15.00-25.00 lakh 34.00-25.00 lakh
(No export) (Export of peas of
Rs. 1.00 lakh)

Learning and experience of FPOs in export 55

 Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
Business activities - Output marketing Output marketing - Output marketing - Input sale – 50%
contributing to (Domestic) – 98% (Domestic) – 100% (Domestic & (Approx.) (Seed
turnover (approx.) (Pomegranate and milk export) – 50% marketing)
- Input sale – 1% marketing) (approx.) - Output marketing
(Approx) (Supplied mango from (Domestic) – 50%
- Output marketing 2 farmers to exporter). (approx.) (Paddy
(supply to exporter) – - Input sale – 50% procurement for
1% (Approx) (Approx.) (Seed local millers).
marketing) - Output marketing
(export) – nominal
- CHC rents –
nominal
Licenses / - Input sale (Seed, - Input sale (Seed, - Input sale (Seed, - Input sale (Seed,
Certificate / Pesticide, Fertilizer, Pesticide, Pesticide, Fertilizer, Pesticide,
Accreditation - FSSAI registration Fertilizer) - Registration with Fertilizer)
- Udhyog Aadhar APEDA and IEC - Registration with
- Mandi license APEDA and IEC
(FPC does not have IEC
code and pack-house is not
APEDA accredited (as it
need fee of Rs. 19,000/-)
Export Business Only one vehicle of orange Not yet 30 MT of mango and 3 quintal of peas
(26.5 MT) is supplied to 4.5 MT of peas exported to UAE.
exporter for Bangladesh. supplied to an exporter Sample of black rice
based out of Mumbai also sent for exports
Challenges for Export to Europe has never Not aware FPC team does not - Lack of knowledge Local variety of Banana
exporting to EU been explored by the FPC. have awareness about and understanding is not established in
In past, Maharashtra export opportunity and of export European markets.
Orange Growers market demand in EU. marketing;
Association has tried by

Learning and experience of FPOs in export 56

 Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
sending some sample, but - Poor quality of
the product does not have products,
demand in the European therefore, high risk
markets. of rejection;
- Unavailability of
quality testing
laboratory in
vicinity.
Business activity As back-end aggregator, Not aware As back-end aggregator As back-end aggregator Aggregation from
undertaken in service provider to on behalf of exporter. on behalf of exporter. farmers for supplying it
export value chain exporter (not as a direct to Desai Fruits
exporter) (Exporter).
Challenges in
export
- Raw material Indian oranges have loose NA Not aware (as supplied Quality inputs is not For export to Gulf
skin, which is not preferred bulk to the exporter) available to the countries, area under
in European market. farmers and they are G-9 is reducing.
not aware of quality of Demand for Indian
product required for varieties is limited.
export. Need
awareness on export
oriented PoPs.
- Access to For Bangladesh, existing NA Not aware (it was Specialised milling is There is no specific
infrastructure infrastructure is ok, responsibility of required for local issue for exporting to
however for exporting to exporter) variety of rice, to meet Gulf countries, but
Gulf (and for Europe), pre- international specific APEDA
cooling facility and cold standards. certified Pack-houses is
storage is required. needed for exporting
to Europe.

Learning and experience of FPOs in export 57

 Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
- Working capital This is a major challenge NA NA Banks are not Farmers need upfront
for increasing business cooperating, and it is payment, in export,
volumes and for export. In difficult to avail receipt of payment
export, as transit period is working capital for takes long time.
long, requirement for WC expanding business.
increases.
- Market prices NA NA Worked on Fixed price There will always be a This has remained a big
and business basis. Not aware of market driven price chllanges for export of
margins export market prices. and the FPC need to G-9 variety. Farmers
match the market. are getting very less
prices in exports and
therefore are
preferring domestic
markets.
- Compliances Not much aware so unable NA NA Lack of awareness NA
and to comment about certification,
Documentation accreditation etc.
Therefore, need
training on this aspect.
- Issues at Unable to comment NA NA Not aware Payment guarantee
market end / and price assurance
Terms of trade are needed.
Key areas to 1. Ensuring quality of Not aware 1. Strong connection 1. Quality 1. Establishing Indian
become export product at field and network with infrastructure for varieties in global
competitive 2. Export oriented the buyers / milling and markets.
infrastructure Importers. packaging to match 2. Developing
3. Inputs fulfilling 2. Setting-up the quality advanced plan for
requirement of export infrastructure for parameters. export to prepare
(for quality and food export. 2. Training and field accordingly.
safety purposes) capacity building of

Learning and experience of FPOs in export 58

 Particular / Name Sharmjivi Nagpuri Santra Farmers’ Delight Agro Jaya Seeds Producer Ishani Agro Producer Tamilnadu Banana
of FPC Producer Company Ltd. Producer Company Company Ltd. Company Ltd. Producer Company Ltd
Ltd.
4. Capacity building of 3. Team shall be various aspects of 3. Developing
farmers and FPC trained on export. export activities appropriate pricing
employees (starting from mechanism to
production to ensure sufficient
packaging); extra value for
3. Organising cost- additional care
effective logistics required in the
services. field.
4. Export facilitation
and information
access.
FPC Governance - AGM and BoD Not many activities are - Farmers - Regular meetings - Regular meetings
meetings are regular being organised. engagement is very of BoDs are of BoDs are
- FPC has permanent Currently NABARD less; organised; organised;
staff (CEO, Accountant appointed agency is - Mainly decisions - RoC returns are - RoC returns are
and Operation Head) maintaining the are taken by key filled timely, and filled timely, and
- No activities are being accounts and other promoters, who compliances are compliances are
undertaken for new activities. are relatives to fulfilled. fulfilled.
members each other. - Engagement and - Engagement and
- No formal mechanism - No formal patronage level is patronage level is
for member’s feedback campaign for relatively less. relatively less.
- Patronage is limited. adding new - No fulltime staff to - No fulltime staff to
members. conduct daily conduct daily
business activities. business activities.

Learning and experience of FPOs in export 59