“The first problem what everybody is facing is the adequate and affordable capital and at the same time timely capital,” said Chandra Sekhar Sakhamuri, Director of Agricultural Marketing and Agri Business, Government of Tamil Nadu, at a stakeholder consultation organised by Confederation of Indian Industry (CII) in association with Central Warehousing Corporation.
He said that Tamil Nadu has around 1686 FPOs and 213 markets.
FPOs are already engaged in aggregation, processing, sorting, grading and value addition, with some having moved into exports with their own branding.
The next step, Sakhamuri said is to make these organisations more commercially viable. Banks and financial institutions need to consider their business plans, capabilities and action plans while assessing their financing requirements, rather than assessing them purely on the lines of individual businesses.
He also called for a change in production planning, from production-led marketing to market-led production.
Farmers and FPOs need to work from market requirements, including export demand, while deciding what and when to produce, Sakhamuri said.
Tamil Nadu has 84 primary processing centres, and some FPOs have expressed interest in operating warehouses.
Sakhamuri said discussions could be taken forward on enabling FPOs to construct and operate their own godowns and warehouses for handling their produce.
The State is also putting in place new support mechanisms, including an FPO management cell, an Agricultural Guidance Bureau and an Agricultural Intelligence and Market Excellence Centre. The latter is intended to support farmers with price forecasting, fair-price information and access to export markets.
On logistics, Sakhamuri highlighted the difficulty of securing suitable containers for transporting perishable products by air at 4-10°C. The State has allocated refrigerated vehicles with a 50 per cent backend subsidy for farmers and FPOs on a pilot basis, with further support to be considered based on feedback.
He proposed bringing FPOs, financial institutions, logistics companies and other stakeholders onto a common platform to address operational requirements and improve access to services.
“The only thing missing is a bit of capital support, enough infrastructure, and hand holding. This is what is required,” Sakhamuri said.