Project Idea

Collectivization of producers, especially small and marginal farmers, into producer

organizations has emerged as one of the most effective pathways to address the many challenges
of agriculture but most importantly, improved access to investments, technology and inputs and
markets.
What is FPO1

The main aim of PO2 is to ensure better income for the producers through an organization
of their own. Small producers do not have the volume individually (both inputs and produce) to
get the benefit of economies of scale. Besides, in agricultural marketing, there is a long chain of
intermediaries who very often work non-transparently leading to the situation where the producer
receives only a small part of the value that the ultimate consumer pays. Through aggregation, the
primary producers can avail the benefit of economies of scale. They will also have better
bargaining power vis-à-vis the bulk buyers of produce and bulk suppliers of inputs.
It is one type of PO where the members are farmers. Small Farmers’ Agribusiness
Consortium (SFAC) is providing support for promotion of FPOs. PO is a generic name for an
organization of producers of any produce, e.g., agricultural, non-farm products, artisan products,
etc.

1
Farmer Producer Organization
2
Producer Organization
 PROJECT PROFILE

VISION: To build a prosperous and sustainable agriculture sector by promoting and supporting
member-owned Producer Organizations, that enable farmers to enhance productivity through
efficient, cost-effective and sustainable resource use and realize higher returns for their produce,
through collective action supported by the government, and fruitful collaboration with academia,
research agencies, civil society and the private sector.

MISSION
 To promote economically viable, democratic, and self governing Farmer Producer
Organizations (FPOs)
 To provide support for the promotion of such FPOs by qualified and experienced Resource
Institutions (RIs).
 To provide the required assistance and resources policy action, inputs, technical
knowledge, financial resources (if possible), and infrastructure – to strengthen these FPOs.
 To remove hurdles in enabling farmers access the markets through their FPOs, both as
buyers and sellers.
 To create an enabling policy environment for investments in FPOs to leverage their
collective production and marketing power.

PRIMARY OBJECTIVES
The primary objective of mobilizing farmers into member-owned producer organizations,
or FPOs, is to enhance production, productivity and profitability of agriculturists, especially small
farmers in the country. The participant farmers will be given the necessary support to identify
appropriate crops relevant to their context, provided access to modern technology through
community-based processes including Farmer Field Schools; their capacities will be strengthened
and they will be facilitated to access forward linkages with regard to technology for enhanced
productivity, value addition of feasible products and market tie-ups. Farmers will be organized
into small neighbourhood informal groups which would be supported under the programme to
form associations/organizations relevant to their context including confederating them into FPOs
for improved input and output market access as well as negotiating power.

PROJECT OBJECTIVES ARE:

 Mobilizing farmers into groups of between 15-20 members at the village level (called
Farmer Interest Groups or FIGs) and building up their associations to an appropriate
federating point i.e. Farmer Producer Organizations (FPOs) so as to plan and implement
product-specific cluster/commercial crop cycles.
 Strengthening farmer capacity through agricultural best practices for enhanced
productivity.
 Ensuring access to and usage of quality inputs and services for intensive agriculture
production and enhancing cluster competitiveness.
 Facilitating access to fair and remunerative markets including linking of producer groups
to marketing opportunities through market aggregators.
Location

Kyaukkyi FPO – NGO for to initiate the Farmer Producer Organization

Kyaukkyi is situated in the eastern part of Bago Region, Myanmar and according to the
topography it is situated at the base of eastern highland. There are (34) village tracts and (134)
villages in its area. 75% of populations are farmers and focusing on the small and marginal
farmers, small land holders, crop sharing farmers will be set up as Farmer producer organization
by the NGO.

Project Beneficiaries

For the pilot project: (2) village tracts (or) any other (2) village tracts which are recommended
by the resource institutions e.g., Agriculture Department, Rural
Development Department, General Administration Department, and the
NGOs
(12) villages
Village Tract Village
Ma Eu Pin Seik 1) Ma Eu Pin Seik
2) Kyauk Kel Gyi
3) Seik Gyi
4) Thel Gone
5) Done To
6) La Patt
Yae Le 7) Yae Le
8) Htwa Ni Gone
9) Yae Le Burma
10) Anyar Su
11) Ma Yan Sein Lay
12) Ma Yan Sein Gyi

Stakeholders

Team members
Township Administrator
Agriculture department, Kayukkyi Township
Village Tract Administrator
Heads of 100 households
Populace who are farmers and the family members
Approximately (20) farmers per village = 240 farmers
FPO Management Committee
The FPO promotion development process shall be done by the Kyaukkyi FPO
management committee which is formed by the each members of RI (Agriculture Department,
Rural Development Department, General Administration Department, and the NGOs)
Responsible person Department Responsibility
3
a) Township Administrator GAD President
b) Agricultural Officer AG4 Secretary
c) Community Facilitator NGO5 Member
d) Field officer other relevant NGO Member
e) Village tract Administrator Project Village Member
f) Head of 100 households Project Village Member
g) Volunteer Farmer Project Village Member

FPO Promotion Development Process

Cluster Identification
Depending upon the implementation of the pilot project, the Cluster areas are to be
selected by the RI6 and the FPO management committee in consultation with the respective
departments. However, it should be ensured that a cluster of 500-1,000 farmers should be
formulated, within four or five village tracts, identifying 80 to 100 contiguous villages of a
particular township.

3
General Administration Department
4
Agricultural Department
5
NGO (Community Driven Development Project)
6
Resource Institution
Diagnostic Study
A Diagnostic Study is to be conducted by the FPO implementation committee in the selected
cluster area. The Diagnostic Study is conducted to assess the preliminary situation of the farmers
and level of agriculture in the area. The study will also help in identifying the potential
interventions required and understand the specific project implementation context.

Feasibility Analysis
Feasibility Analysis for the formation of FPCs should be carried out by FPO management
committee and then appraised by hired external experts (or) any volunteer from respective NGOs
in various technical areas. A normal feasibility study should cover aspects such as financial,
technical, legal, political, socio-cultural, environmental, economic, and resource feasibility.

Baseline Assessment
Baseline Assessment, to be carried out by FPO management committee, will help in
generating data related to the current prevailing situation of farming and small, marginal and
tenant farmers. Baseline assessment will cover a variety of factors to identify the potential
interventions, to plan development and business plans and to establish the base figures based on
future outcome indicators that can be measured to understand the change contribution. The
assessment shall be conducted using stratified random sampling through structured household-
level interviews and open-ended focus group discussions with a variety of stakeholders.

Business Planning
Business Planning will be carried out by FPO management committee with the help of
selected farmers’ representatives. Business planning is a process through which the strategic and
operational orientation of an emerging FPO is shaped. While baseline assessment figures will be
important inputs to understand the level from which products and services for farmers’ members
should be developed, more important will be the collective visualization of the future of the FPO.
Using a variety of tools and systematic collective reflections, a business plan with proper
projections on various aspects needs to be developed. The key is to develop business plans in
detail with FPO farmer members to provide clear vision.

Mobilization of Farmers
Once a strong case has been established by management committee with the help of a
select group of farmers through the business planning process, it is time to mobilize farmers into
FIGs7 and eventually as farmer-members of FPOs. Mobilization of farmers should be done with a
variety of communication aids like – pamphlets, documentary movies (India context), posters,
regular village-level meetings, proper vision development of promoter farmer-members (members
of management committee). Promoter farmer-members are those who are eager to form a FPO on
voluntary basis, having understood the importance and potential benefits of forming FPOs,
obtained through training programmes and exposure provided by the management committee.

Organizing and Formalizing

FIGs in an aggregated cluster together form FPOs. Typically, around 10-20 FIGs can
come together to form a FPO. For the pilot project the FPOs needs not to be registered and after
pilot project the FPOs need to be registered by the guidance of General Administration
Department.

Resource Mobilization
Before initiating the operations of a FPO all required resources should be mobilized by the
management committee with the help of FPO representatives and board of directors. Financial,
7
Farmer Interest Group
human (staff), technical and physical resources should be developed during this particular step.
Based on the business plan the management committee should liaise with various financing
agencies and mobilize resources for hiring/purchasing and developing various resources.

System Development
Management Committee should facilitate the development of management systems in the
FPO. Guidelines for management systems should be able to address all requirements related to
financial services, input and output management services. Systems related to management of
finance, human resources, stock and inventory, procurement and quality management, marketing,
internal audit, internal conflict resolution and other important functional areas should be
developed. Standard operating procedures for the same should be established.

Business Operation
Business operations are the commencement of procurement, production, processing,
marketing and financial service activities of a FPO. Management committee should carefully train
both the governing and operational structures of the FPO in order to ensure smooth functioning of
business operations. The entire value-chain related to various agriculture and allied products and
commodities needs to be managed.

Assessment and Audit

Management committee should facilitate constant assessment of performance of various
stakeholders like farmer members, governing board of directors and service providers. They
should also help FPOs to reflect using Institutional Maturity Index to understand areas of
improvement. Internal process and accounting audits will help maintain both transparency and
accountability.
 Farmer Producer Service Model

Farmers' Producer Organization

1. Input Supply
2. Financial
3. Techanical
4. Insurance
General Body (GB) 5. Procurment
6. Packaging
7. Marketing
8. Networikng

Executive Body

President

Secretary 1. Planning
2. Implementation
3. Monitoring
Members

Local Resource Person