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The reason why many of the government’s well-intended measures fail is not far to seek. The actual problem that farmers face today is low incomes due to the absence of post-harvest infrastructure, low value addition and absence of organized marketing processes. The solution, in fact, lies in ensuring that farmers get a higher portion of the price paid by consumers, which will ensure higher incomes for them. This, in turn, will spur investment in agriculture, leading to increase in farm productivity and easing of supply-side constraints responsible for spiralling foodgrain prices.Organizing farmers in a structured mode that’s conducive to efficient value addition and marketing will be in the interest of millions of small and marginal farmers (primary producers).Let’s take a look how these companies can work.Producer companies, with the intention to organize farmers into a collective to improve their bargaining strength in the market, are owned and governed by shareholder farmers (or artisans) and administered by professional managers. They adopt all the good principles of cooperatives and the efficient business practices of companies and also seek to address the inadequacies of the cooperative structure.Producer companies can be formed by any 10 or more primary producers or by two or more producer institutions, or by a contribution of both. They can undertake activities related to production, harvesting, procurement, grading, pooling, marketing, processing, etc., of agricultural produce.
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