India CSR Awards wining CSR Story: Bhumitra Self Reliant Farmers Producer Company

Three CSR projects of Reliance Foundation, CSR arm of Reliance Industries Limited,  India’s largest private sector enterprise has been honoured with India CSR Community Initiative Awards (India CSR Awards) by India CSR, world’s popular CSR Newswire. India CSR organized ‘3rd Annual CSR Awards Ceremony’ on 27 August 2016 at Davanam Sarovar Portico Suites, Bengaluru, India. The event was supported by Birla Institute of Management Technology (BIMTECH) and Pehel, the CSR arm of Dainik Jagran Group. CSR projects – Bhumitra Self Reliant Farmers Producer Company (Agriculture) has been honoured at the gala award function.

India CSR News Network

BANGALORE: Reliance Foundation (RF) works towards creating and supporting meaningful and innovative activities to address some of India’s most pressing developmental challenges. It has a holistic approach towards development and lays emphasis on leveraging technology for development solutions. 

The organisation has a model of direct engagement and is involved directly with the community through trained professionals. Within a span of over five years, RF has worked with some of the most vulnerable and marginalised communities across India, integrating them into the mainstream development process of the country. Since inception, RF has clearly defined its focus areas of operations which are rural transformation, health, education, disaster response, sports for development, urban renewal, and arts, culture and heritage.

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Producer companies

Under rural transformation, RF works on a holistic intervention to bridge the development gap between rural and urban areas with a 360 degree approach. It involves and strengthens the community in its development process for promotion of sustainabe agricultural practices, and creates linkage with market for better income of farm produce. The programme creates awareness among community members about various government schemes, such as Maharashtra Agriculture Competitiveness Project (MACP) and Department of Agriculture, Government of Maharashtra for leveraging its funds.

Community being the forerunners of its own development efforts, the programme encourages villagers to contribute voluntarily for their village development, both monetary and non-monetary contributions. RF has worked in over 500 villages with marginal farmers and uniting them through village associations. So far, 48,500 farmer households are enrolled in the programme. While the land of these farmers are fragmented and smaller in size, it often do not yield them profitable returns. The programme supports these farmers in establishing Producer Company, registered under the Companies Act, which could add value to their agricultural produce.

Objectives

The objectives of producer companies are to develop village level leadership and integrated at a single point for the benefit of the community in an organized structure; to provide agriculture inputs in time with a fair price like the certified seeds, fertilizers and pesticides; to provide necessary infrastructure required for carrying out transactions in a transparent manner at market-yards; and to build the strong backward and forward linkages minimize farm input cost and maximize margins on farm produce.

This case presents one of the case studies on producer company that was established with support of RF in Yavatmal district, Maharashtra. 

Strategy and executuion of “Bhumitra Self-Reliant Farmer Producer Company Limited, Yavatmal”

Bhumitra Self Reliant Farmer Producer Company Ltd (BSRFPCL) established on July 26, 2012 at Mouda, Nagpur with a vision to create effective mechanism for minimizing the agricultural input costs and making agriculture a profitable business. The strategy is to address the problems related to farming, allied business and constraints to the value chain process, develop skilled leadership and set up efective governance for wealth creation and for holiostic village development.

In Yavatmal, 24 village associations of rural transformation programme jointly established BSRFPCL. All 2,447 farmer houseolds of these village associations got connected with the company. During inception, the company had only a lakh as its fund and five lakh of authorised capital. After completion of legal requirements, this company transferred to Yavatmal in October 2013. To acquire more awareness and information about Producer Companies, exposure visit was arranged for members of village association to the existing, operational producer companies in Yavatmal district. Through this exposure visit, the members realised the requirement of capital for running the company. But, concern the members had was they did not had any financial capital to invest in.

To find localised solutions to this concern, RF engaged with the association members to find means for capital. This meeting resulted in donation of one quintal of soyabean per household who could afford to donate to the producer company. The contribution from 872 farmers helped in aggregating 77.5 MT of soyabean. The sale from this donation helped in raising a share capital for the company of up to Rs. 35 lakh.

Following a democratic way, the shareholders elected three member representatives from each Village Association for aggregation and procurement, marketing and coordination, and social inclusion commitees, each having 24 members. Furthermore, one CEO and five directors were nominated of which three were women. The directors held responsible in taking care of all PC related activities.

Results

In 2013-14, with the help of capital, the company procured 102.2 MT soybean of worth Rs 33.81 Lakh. While the company invested Rs. 17.25 lakh, the remaining Rs 16.56 lakh soybean was procured on credit. For facilitating procurement process, training was arranged by RF for procurement sub committees on the quality parameter at Agricutuire Produce Market Committee (APMC), Yavatmal district. With the help of the training, the procurement of soybean was done using post-harvest technique like grading, measuring moisture, etc.

The knowledge obtained through training helped in purchasing good quality and graded soyabean. In 2015-16, after 15 months of storage, this soybean stock sold to M/s Suguna Foods Pvt Ltd and earned Rs. 38.65 lakh. After deducting tax and overheads, the profit realised was Rs. 25,000. In this entire process of the selling, BoDs learnt about commodity trading in tie up with M/s Suguna Foods Pvt Ltd and applied for the Direct Marketing License for future commodity trading.

Meanwhile, the donation from Reliance Foundation helped BSRFCL to procure one dal mill with a capacity of 20 qt/hr. After verifying different elements, the dal mill was set up in Sant Khateshwar Shetkari Samitee, Khangaon village. With the availability of lease land, it was decided that the a farm produce processing centre will be set up, including other product like mirchi powder, flour mill and packaging of value added farm produce. To start this activity, BSRFPCL constructed 2,500 Sq.ft infrastructure building and machinery set up with name of Bhumitra Farm-produce Processing Center (BFPC), Khangaon.

For the processing of dal, BSRFPCL procured 15.43 Qtl tur dal of worth Rs. 93,000. In order to sell dal in the retail market to reap more benefit, Bhumitra PC decided to work out on packaging and branding. In this connection, an application is submitted to the Food Safety and Standards Authority of India for license which in the pipeline. At present pockets weighing one kg in the name of “Bhumitra Tur Dal” have been made available for sale in market.

Agriculture Technology Management Agency (ATMA) Yavatmal noticed Bhumitra self-Reliant Farmer Producer Company limited work. Through Maharashtra Agriculture Competitiveness Project (MACP) under the Farmers Common Service Center (FCSC) they sanctioned a proposal to construct a warehouse to store the value added farm produce.

The construction estimated Rs. 16.65 lakh which had 200 MT storage capacities. ATMA Yavatmal sanctioned and released Rs. 7.5 lakh subsidy for the same. One of the member of BSRFPCL donated his road side land for its construction. Now this Bhumitra Farmers Common Service Center (BFCSC), Belapur Heti Construction work is completed. It is noteworthy that this is the first ever warehouse constructed under FCSC in Maharashtra and it also generated employment to landless members of up to Rs. 4 lakhs from Pimpalkuti, Wadhona Khurd and Shivni village associations. This saved the construction cost to the tune of Rs. 3.5 lakhs (22%) from an estimated cost of Rs.16.65 lakhs and the construction was completed at Rs. 13 lakhs.

BSRFPCL took initiatives in providing accident insurance benefit for the 872 members who contributed in raising capital for the producer company through their donations. Identify cards were also made to them for using the benefits of company’s different schemes in future. This collective effort of community members stood as a good example in the form of Bhumitra Producer Company and for several other companies.

Learnings and scale up plans

The producer company was successful in generating the interest and cooperation among producers to join and reap its benefits. Being the initial stages of its development, the company transacted produce worth Rs. 40 lakhs, almost half of the investment it made through paid up capital. The company has plans of expansion to not only procure, aggregate and sell more of value added produce, but also to strengthen the capacity of its members who could effectively contribute and being part of this journey. Buidling on this successful experience of Yavatmal producer company, Reliance Foundation plans to strengthen all its 10 producer companies to make them strong, sustainable and profitable in the long run for the direct benefit of farmers to fetch higher market value for their produce as well as indirectly contributing to the inclusive village development.