True: Farmer producing companies in Maharashtra made almost Rs. 10 crore in out-of-mandi trade since new farm laws came into effect.

By: Shashi M
December 10 2020

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While new laws did boost FPCs, it is difficult to ascertain the extent of its benefit to grassroot farmers who mostly saved on transportation costsIndian farmers have been protesting against three bills that were passed in Lok Sabha in September 2020 touting them as ‘anti-farmer bills.’ These bills: the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill; the Farmers Produce Trade and Commerce (Promotion and Facilitation) Bill; and the Essential Commodities (Amendment) Bill, were passed amid protests from the opposition and farmers worried that moving towards privatizing the agricultural sector would lead to exploitation. Since the laws were enacted in September, MahaFPC, the umbrella body of farmer producing companies (FPC) in Maharashtra, estimates that FPCs in four districts have made worth Rs. 10 crore from trade outside mandis. The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 which curtails the power of APMCs to regulate agricultural marketing and levy market cess and other taxes helped record an "increased trade interest from edible oil solvent and extractors and animal feed manufacturers for directly procuring from their farmers," Indian Express reported. "For farmers, this meant savings in terms of transportation cost while companies benefited by not having to pay for mandi cess." FPCs are a corporate body registered as a producer company under Companies Act, 1956 (and later amended in 2002). FPCs main activities consist of production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the members. All profits and benefits are shared among members. Under Section 581C of the Companies Act, any ten or more individuals, each of them being a producer or two or more producer institutions or a combination of ten or more individuals and producer institutions, desirous of forming a producer company may form an incorporated company. So the structure of FPCs vary and it is difficult to predict how many gross root farmers are actually a part of the FPCs. The claim in question says that 4 FPCs in Maharashtra made Rs. 10 crore since the enactment of the laws while implying that most of the money might have gone to grassroot farmers. However, we are uncertain of how many money actually went to farmers in these FPCs. And FPCs across India could have over 1,000 farmers as part of the corporation. So while 10 crore seems like a huge figure, when divided amongst all stakeholders and members, including overhead costs, most grassroot farmers would eventually receive a nominal amount.