The Jhambukhand Kisan Agro Producer Company Limited (JKAPCL) came to life under a National Agriculture Innovation Project (NAIP) program entitled Livelihood and Nutritional Security of Tribal Dominated Areas through Integrated Farming System and Technology Models. With the guidance and support of organizations including Maharana Pratap University of Agriculture and Technology (MPUAT), Krishi Vigyan Kendra (KVK), and ACCESS development Services, JKAPCL has taken great strides towards becoming a self-sustaining organization capable of empowering small and marginal farmers. The use of self-help principles to create Farmer Business Groups (FBGs) has helped facilitate savings, enhance the aggregation of farmer surpluses to generate more marketing power, and allowed for training and capacity building sessions to directly benefit well over 1,000 farmers throughout 11 villages of the Banswara District.
Institutionalization
The institutional structure of the JKAPCL is highly decentralized, thus promoting heightened autonomy and leadership at all levels while allowing for the demands at the individual level to be reflected in company actions. Currently, the JKAPCL is comprised of 724 members spanning 11 villages. These members are organized into FBGs ranging in size from 10-20 farmers. A total of 54 FBGs split between two clusters, Garhi and Talwara, hold monthly meetings to collect savings, discuss any concerns and determine agricultural input demands for the upcoming month. Each FBG has three leadership positions – president, secretary and cashier. The president represents their FBG at a monthly cluster meeting where member fees are collected and business issues pertaining to agricultural input demand and commodity prices are discussed. Groups have
demonstrated a robust 90% attendance rate, as absent groups are held accountable through a financial penalty. Through their savings efforts to date the FBGs have generated cumulative savings of Rs 4,00,000.
Governance
JKAPCL is self-governed by a fourteen person Board of Directors comprised of eleven members each representing a village, two expert directors from MPUAT and ADS, as well as the company Chief Executive Officer (CEO) as an ex-officio member. The Board appointed CEO manages JKAPCL’s staff and business operations. The staff currently consists of two production managers, a village institution expert and an account/administrative manager. The production managers aggregate the demand from various villages through the eleven service providers, one situated in each village. The service providers are the key representatives in each village for demand inquiry, output aggregation, as well as product, service, and information dissemination. The village institution expert extensively monitors the FBGs and serves as a communication platform for all the actors in JKAPCL. The account/administrative manager keeps the financial accounts of the company. The Producer Company has been federated into a legal entity, thus creating significant opportunities for further expansion, raising additional capital, establishing marketing linkages, and bolstering overall member empowerment.
Business Activities
JKAPCL is currently engaged in several business activities, with its main focus on providing agricultural inputs in a more affordable and timely manner. Though JKACPL has a long-term preference for output marketing, the large scale demand for input supplies has led the company to intervene in order to more aptly supply these goods. In 2009-10 JKAPCL achieved INR 12.5 lakh turnover while attaining 481 members. Thus far in 2010-11 (through 31st December 2010) JKAPCL has achieved INR 24 lakh turnover and impacted more than 1,000 households. Currently input supply is predominantly seed and fertilizers while a majority of output marketing comes through the sale of wheat and maize.
JKAPCL is currntly utilizing four avenues to generate ample working capital to facilitate their operations; share capital, credit extension from input providers, loans from FBGs and additional farmer savings. JKAPCL has an authorized share capital of Rs 10,00,000 with a paid up capital of approximately Rs 1,10,000. The credit extended by several companies in certain input varieties has supported JKAPCL in more efficiently providing input supply regardless of the level of working capital. Members are now making substantial monthly savings, thus allowing JKAPCL to take out short term loans from 17 of the FBG’s to help in carrying out its business. Lastly, JKAPCL has benefited from supplementary working capital of approximately Rs 1,40,000 provided by 74 farmers as additional savings.
Impacts
The JKAPCL has catalyzed a diverse set of direct and indirect benefits for farmers choosing to engage in the services provided. Direct economic impacts are quantifiable by analyzing the savings generated through several of the subsidized inputs provided to farmers. The table below reveals that Rs 2.8 lakh have been saved through the first three quarters of the current fiscal year with at least 576 farmers sharing the savings. When looking more broadly at the complete array of inputs provided by the JKAPCL the cash realization is even more impressive. During the previous fiscal year of 2009-10, 463 farmers realized a combined Rs 5.08 lakh.
Farmers engaging in JKAPCL activities benefited additionally through the windfall of social empowerments. Several such positive impacts include: bolstered leadership capacity, increased market sensibilities, and a widened knowledge base ideal for forward thinking. The JKAPCL currently has 54 well functioning FBGs making regular savings. Eight training sessions have been conducted to enhance the leadership within these FBGs. Furthermore, the FBGs have even begun meeting regularly outside of the JKAPCL required times, thus revealing a heightened understanding of the importance of a strong group. Each FBG representative attends a monthly cluster level meeting with approximately 30 other leaders in attendance. At these meetings the representatives must depict leadership in order to make known any group issues or demands. Similar leadership is being bred at the Board of Directors level. Here village representatives must understand how to manage accounting, conduct performance reviews, understand legal compliance and be active in the decision making process.
Very limited market information was available to prior to JKAPCL intervention, and most farmers underestimated their ability to benefit from better prices for their inputs and outputs. Increased market knowledge is the product of ongoing trainings, regular meetings and overall exposure to the Producer Company’s operations. Now members more fully understand the market power they have when pooling their output surpluses. Many members even inquire daily as to the prices being given for certain crops. Consequently, local traders are far less able to capture unjust margins from these farmers.
Lastly, increased incomes, savings, leadership, market knowledge and overall social capital have combined to give the farmers the opportunity think in the long-run. Members use their newfound advantages to plan more properly in terms of purchasing, selling, and making investments for their households.
Current Challenges
JKAPCL is faced by two challenges at this stage of development with the primary issue being limited working capital. The strained working capital held by the Producer Company is tied up in transactions most pertinent for members; consequently the undertaking of large-scale investment to begin proper output marketing is not feasible. A substantial portion of the working capital is channeled to purchasing the agri-inputs demanded by members. Several of the input providers are extending credit to JKAPCL thus mitigating the working capital constraint; however, credit in itself is not enough to generate sufficient working capital for expansion in output marketing. Furthermore, the supply of fertilizer is insufficient during peak demand seasons, thus it is in the interest of JKAPCL to generate a stock during low demand seasons. This too is not currently possible because any funds are channeled towards meeting present demands. New avenues for working capital generation are essential for JKAPCL to expand business and reach self-sustainability in more timely fashion.
The other primary challenge faced by the JKAPCL is the impending lack of grant capital. The NAIP funding for capacity building of staff and Board members terminates in March of 2013. It is necessary for JKAPCL to work in anticipation of losing this funding in order to ensure the funds needed for capacity building until the Producer Company reaches self-sustainability.
Future Business
JKAPCL has several key business endeavors in preparations for the upcoming years. The primary focus for business expansion will focus on output marketing of surplus member produce and production of agricultural seed for sale. The Producer Company’s goal is to shift focus to expand output marketing of wheat, maize, and other vegetables, as the resources become available. This will include proper certification, branding and marketing so as to achieve high levels of sales. JKAPCL also intends to engage in the marketing and sales of maize and wheat seed.
Institutionalization
The institutional structure of the JKAPCL is highly decentralized, thus promoting heightened autonomy and leadership at all levels while allowing for the demands at the individual level to be reflected in company actions. Currently, the JKAPCL is comprised of 724 members spanning 11 villages. These members are organized into FBGs ranging in size from 10-20 farmers. A total of 54 FBGs split between two clusters, Garhi and Talwara, hold monthly meetings to collect savings, discuss any concerns and determine agricultural input demands for the upcoming month. Each FBG has three leadership positions – president, secretary and cashier. The president represents their FBG at a monthly cluster meeting where member fees are collected and business issues pertaining to agricultural input demand and commodity prices are discussed. Groups have
demonstrated a robust 90% attendance rate, as absent groups are held accountable through a financial penalty. Through their savings efforts to date the FBGs have generated cumulative savings of Rs 4,00,000.
Governance
JKAPCL is self-governed by a fourteen person Board of Directors comprised of eleven members each representing a village, two expert directors from MPUAT and ADS, as well as the company Chief Executive Officer (CEO) as an ex-officio member. The Board appointed CEO manages JKAPCL’s staff and business operations. The staff currently consists of two production managers, a village institution expert and an account/administrative manager. The production managers aggregate the demand from various villages through the eleven service providers, one situated in each village. The service providers are the key representatives in each village for demand inquiry, output aggregation, as well as product, service, and information dissemination. The village institution expert extensively monitors the FBGs and serves as a communication platform for all the actors in JKAPCL. The account/administrative manager keeps the financial accounts of the company. The Producer Company has been federated into a legal entity, thus creating significant opportunities for further expansion, raising additional capital, establishing marketing linkages, and bolstering overall member empowerment.
Business Activities
JKAPCL is currently engaged in several business activities, with its main focus on providing agricultural inputs in a more affordable and timely manner. Though JKACPL has a long-term preference for output marketing, the large scale demand for input supplies has led the company to intervene in order to more aptly supply these goods. In 2009-10 JKAPCL achieved INR 12.5 lakh turnover while attaining 481 members. Thus far in 2010-11 (through 31st December 2010) JKAPCL has achieved INR 24 lakh turnover and impacted more than 1,000 households. Currently input supply is predominantly seed and fertilizers while a majority of output marketing comes through the sale of wheat and maize.
JKAPCL is currntly utilizing four avenues to generate ample working capital to facilitate their operations; share capital, credit extension from input providers, loans from FBGs and additional farmer savings. JKAPCL has an authorized share capital of Rs 10,00,000 with a paid up capital of approximately Rs 1,10,000. The credit extended by several companies in certain input varieties has supported JKAPCL in more efficiently providing input supply regardless of the level of working capital. Members are now making substantial monthly savings, thus allowing JKAPCL to take out short term loans from 17 of the FBG’s to help in carrying out its business. Lastly, JKAPCL has benefited from supplementary working capital of approximately Rs 1,40,000 provided by 74 farmers as additional savings.
Impacts
The JKAPCL has catalyzed a diverse set of direct and indirect benefits for farmers choosing to engage in the services provided. Direct economic impacts are quantifiable by analyzing the savings generated through several of the subsidized inputs provided to farmers. The table below reveals that Rs 2.8 lakh have been saved through the first three quarters of the current fiscal year with at least 576 farmers sharing the savings. When looking more broadly at the complete array of inputs provided by the JKAPCL the cash realization is even more impressive. During the previous fiscal year of 2009-10, 463 farmers realized a combined Rs 5.08 lakh.
Farmers engaging in JKAPCL activities benefited additionally through the windfall of social empowerments. Several such positive impacts include: bolstered leadership capacity, increased market sensibilities, and a widened knowledge base ideal for forward thinking. The JKAPCL currently has 54 well functioning FBGs making regular savings. Eight training sessions have been conducted to enhance the leadership within these FBGs. Furthermore, the FBGs have even begun meeting regularly outside of the JKAPCL required times, thus revealing a heightened understanding of the importance of a strong group. Each FBG representative attends a monthly cluster level meeting with approximately 30 other leaders in attendance. At these meetings the representatives must depict leadership in order to make known any group issues or demands. Similar leadership is being bred at the Board of Directors level. Here village representatives must understand how to manage accounting, conduct performance reviews, understand legal compliance and be active in the decision making process.
Very limited market information was available to prior to JKAPCL intervention, and most farmers underestimated their ability to benefit from better prices for their inputs and outputs. Increased market knowledge is the product of ongoing trainings, regular meetings and overall exposure to the Producer Company’s operations. Now members more fully understand the market power they have when pooling their output surpluses. Many members even inquire daily as to the prices being given for certain crops. Consequently, local traders are far less able to capture unjust margins from these farmers.
Lastly, increased incomes, savings, leadership, market knowledge and overall social capital have combined to give the farmers the opportunity think in the long-run. Members use their newfound advantages to plan more properly in terms of purchasing, selling, and making investments for their households.
Current Challenges
JKAPCL is faced by two challenges at this stage of development with the primary issue being limited working capital. The strained working capital held by the Producer Company is tied up in transactions most pertinent for members; consequently the undertaking of large-scale investment to begin proper output marketing is not feasible. A substantial portion of the working capital is channeled to purchasing the agri-inputs demanded by members. Several of the input providers are extending credit to JKAPCL thus mitigating the working capital constraint; however, credit in itself is not enough to generate sufficient working capital for expansion in output marketing. Furthermore, the supply of fertilizer is insufficient during peak demand seasons, thus it is in the interest of JKAPCL to generate a stock during low demand seasons. This too is not currently possible because any funds are channeled towards meeting present demands. New avenues for working capital generation are essential for JKAPCL to expand business and reach self-sustainability in more timely fashion.
The other primary challenge faced by the JKAPCL is the impending lack of grant capital. The NAIP funding for capacity building of staff and Board members terminates in March of 2013. It is necessary for JKAPCL to work in anticipation of losing this funding in order to ensure the funds needed for capacity building until the Producer Company reaches self-sustainability.
Future Business
JKAPCL has several key business endeavors in preparations for the upcoming years. The primary focus for business expansion will focus on output marketing of surplus member produce and production of agricultural seed for sale. The Producer Company’s goal is to shift focus to expand output marketing of wheat, maize, and other vegetables, as the resources become available. This will include proper certification, branding and marketing so as to achieve high levels of sales. JKAPCL also intends to engage in the marketing and sales of maize and wheat seed.
