Small Farmers Realise Better Prices for Paddy through FPO

Over 1000 small and marginal farmers of this district, stand to gain better market price as the MSSRF promoted Illuppur Agriculture Producer Company Limited (IAPCL) initiated paddy procurement from its members in the last samba season.

Farmers often go for distress sale immediately after the harvest, due to lack of on-farm storage facility and the need for immediate money to settle pre-harvest credit obtained from input dealers and others. To avoid this situation, this year, IAPCL initiated paddy procurement with 10% additional price over the current market price of Rs. 1700/quintal.

This year the rainfall is lower than the normal and paddy harvest is also lower than expected. Unexpectedly the market price for the paddy also gone down this year from the usual price. At this juncture, to encounter the distress market condition, IAPCL has initiated paddy procurement from its member farmers and plans to procure a minimum of 250 tonnes and market it. The trend analysis of the past years has shown that the price of the paddy increases at least by 30% after a few months. However, small farmers are usually unable to wait to get a better price. The IAPCL procurement has been initiated with support from Agriculture market committee for fund and storage facility. This procurement is expected to be complete by the end of February 2018. Farmers such as Mr. Kamatchi farmer from Ennai village and member of IAPCL, expressed hope that this delayed marketing will bring 20% additional price when IAPCL sells the stock in the market. Such surplus income will be given as patronage bonus to members in proportion to their respective contribution to the business. IAPCL also plans to process a portion of the paddy and market it as unpolished rice to increase the price realization by the shareholders.