Even while the prices of agricultural commodities are ruling sky high, farmers are not benefiting from it. Being small producers, they face several inherent disadvantages which come in the way of realising better returns. Their share of what the consumer is paying for a commodity, therefore, remains woefully low.

Many of these problems can be taken care of through innovative business models which allow them to collectively reap the benefits of scale in both procuring the inputs and disposing of the produce. Though the concept of cooperatives is meant for achieving this objective, but unfortunately, it has not worked in India except in some sectors like milk and sugar.

Another novel concept, which was conceived and debated in the early 2000s but was almost forgotten subsequently, was that of primary producers’ companies (PPCs), which were virtually the hybrids of cooperative societies and private limited companies without the undesirable features of both. The Companies Act, 1956 was amended in 2002 to pave the way for the formation of such companies by the farmers and small producers even in other sectors..............Click for more

Source Web Page: Business Standard