Backdrop: The economy of Assam continues to be predominantly agrarian, the dependence of rural labour force on agriculture and allied activities was nearly 53 per cent as per Population Census, 2001. Capital Deficiency and Marketing Problems are cited among others as reasons behind the poor show of Agriculture Sector in Assam. Commercial capital, i.e., loans from banks or other credit agencies, is not generally accessible to farmers in Assam. As a result, borrowing from unscrupulous lenders, who are not regulated by the state, at an extremely high interest rate is common in the state. Tragically, In many instances some borrowers lose their livelihood, i.e., their cultivable land, to these unscrupulous lenders. Although the amount of commercial loan for agricultural purposes was over Rs. 77 billion in 1990-91, most of these loans went to tea gardens. Agricultural markets in Assam are under-developed. Farmers sell to the nearest dealer/buyers, mostly immediately after harvesting when the price is at the lowest, instead of trying to find the best market for their products. Geographical isolation, weak transportation and communication systems, poor marketing facilities, poor or non-existent market intelligence (e.g., information on price and place to sell) are some of the principal marketing-related problems.
Silver Lining: A casual glance at the Statistics on the Agriculture Sector provided by the Directorate of Economics and Statistics, Assam throws in some surprise observations. Did you know that Cachar, Hailakandi and Karimganj are suited better for Winter Rice whereas Kamrup (R), Barpeta and Nagaon have stupendous records for Summer Rice? Wheat production is superb in Bongagaon and Kamrup (R). Sonitpur can produce Grams with good productivity levels. Goalpara, Bongaigaon and Nagaon can produce a lot of Jute. Karbi Anglong and N C Hills produce Cotton. Nagaon, Barpeta and Kokrajhar produce a lot of Mustard and Rape Seed. Darrang and Barpeta produce Potatoes in huge quantities. Nagaon, Golaghat and Karbi Anglong produce a lot of Sugarcane. This list will go on and on. Has anyone delve into the anormous potential the Agriculture Sector can offer?
The Solution: The concept of producer company was introduced in 2002 by incorporating a new Part IXA into the Companies Act enabling incorporation of cooperatives as companies and conversion of existing cooperatives into companies, while ensuring the unique elements of cooperative business with a regulatory framework similar to that of companies. In a ‘Producer Company’, only persons engaged in an activity connected with, or related to, primary produce can participate in the ownership. The members have necessarily to be ‘primary producers’. Primary produce has been defined as a produce of farmers arising from agriculture including animal husbandry, horticulture, floriculture, pisciculture, viticulture, forestry, forest products, re-vegetation, bee raising and farming plantation products: produce of persons engaged in handloom, handicraft and other cottage industries: by – products of such products; and products arising out of ancillary industries.
Formation of a Producer Company: Any ten or more individuals, each of them being a producer, that is, any person engaged in any activity connected with primary produce, any two or more producer institutions, that is, producer companies or any other institution having only producers or producer companies as its members or a combination of ten or more individuals and producer institutions, can get incorporated as a producer company. The companies shall be termed as limited and the liability of the members will be limited to the amount, if any, unpaid on the shares. On registration, the producer company shall become as if it is a private limited company with the difference that a minimum of two persons cannot get them registered, 3 the provision relating to a minimum paid-up capital of Rs. 1 lakh will not apply and the maximum number of members can also exceed 50. Members’ equity cannot be publicly traded but only transferred.
The Plan: Numerous places in Assam, as mentioned above, have special land composition, environment, weather conditions etc conducive to the prosperity in a specialised and concentrated farming. For eg, in Sorbhog in Barpeta district, there is an abundance of Milk and milk-based products to the tune that domestic consumption is shown as more than 3 litres! All of us would agree that these 3 litres are being forced as domestic consumption, as these remain unsold at normal rates. The Plan in Sorbhog is to form a PRODUCER COMPANY of Milk Producers and appoint a CEO of the company from the corporate Sector who would professionally manage the company. The CEO would have to build up a strong network for the products of the Producer Company. On one hand, he has to deal with the producers/farmers in the villages and on the other hand he should represent the company in National and International platforms for marketing and negotiations.
The Requirement: There is a forward looking group of Individuals proposing to start 3 Producer Companies in the near future in Assam and is looking for Passionate Assamese Professionals who are looking forward towards spending a year or two in the villages of Assam, taking a brief sabbatical from their overloaded work-life. Education or Degrees would not matter as much as passion for giving back to the society in Assam would. The CEOs can reshape the future of more than thousand families each in Assam and may continue to serve as the CEO even after the agreed period or service (1 or 2 years) is over. The CEO would be a salaried individual of the Producer Company.
Successful Examples of Producer Companies: From www.pradan.net “…Mr. Madhabananda Ray, the CEO of MASUTA Producer Company formed by about 2000 Tasar yarn producers in Bihar, Jharkhand and Chhattisgarh presented the success story of the company. A seven crore company now, the MASUTA Producer Company has set up joint ventures with Jharcraft (A Government of Jharkhand enterprise) for cocoon trading and with a private entrepreneur for Tasar Fabric Marketing – Eco-Tasar Limited. Ms. Sumita Ghose, CEO of Rangsutra a Producer Company of about 3,000 handicraft artisans from Assam, Rajasthan and Uttarkhand, spoke about the problems she faces with the mainstream commercial banks with regard to credit mobilisation. At the same time she also had problems with the donors in raising grants because of the commercial nature of the organisation. Given the difficulties Rangsutra has also been promoted as a Private Limited company, it has been easier to draw investments to this company. Mr. Sachin Oza of Development Support Centre, based in Ahmedabad spoke about the Producer Company they set up in Dhari, in Amreli district of Gujarat, comprising of over 1000 farmers. The Producer Company helps in support during production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce or import goods or services for their benefit. The Producer Company also looks at provision of techno-managerial services to farmers and also delivery of various financial services. Mr. Ravi Shankar of NDDB spoke about the new generation producer companies that NDDB is planning to float in Junagadh and Chittoor. Currently there are co-operatives there and they are being supported to transform into Producer Companies. NDDB is a major stakeholder in the idea of Producer Companies having worked very closely with Prof. Alagh in lobbying for the amendment of the Companies Act to create the new legislation…”
How to Apply: Anyone willing to spend a year or two in the villages of Assam, bringing life to the vision and mission of a Producer Company, most importantly bringing about a lasting change in Assam, please send in your application with your profile to firstname.lastname@example.org