The poverty in the rural area will not reduce unless farmers move to other sectors which give more money. If they remain in agriculture, they must diversify and shift from only concentrating on producing food grains.

Small producer farmers produce 41% of the total grain and more than half of the total fruits and vegetables in the country. This can continue only if;

1. They earn an adequate income from these products. This can only happen if they are organized, and they own and manage an institution.
2. If they have a development fund to pay for training staff, management, Maintain officer etc. till they become viable after 3- 4 years.
3. Portfolio of loans- which include working capital. Term loans and revolving funds and low cost for production, aggregation, for value addition and for marketing. (financial scaffolding)
4. They are assured a minimum support price thorough regular procurement. The government can give this protection.
5. Support to develop and introduce appropriate technology to improve tools and implements that will raise productivity. These can be owned by a few and rented out to smaller farmers Instruments and tools related to preparing the land; as well as post-harvest processes- grading, shelling, husking, packaging and storage.
6. Insurance for crop failure schemes which are friendly to the small producer.

In order for them to earn a proper income, the farmers will need to get organized and own and manage institutions – called Second Level Institutions (SLIs). These institutions will aggregate (collect), add value and market the products of the farmers. These SLIs will have a small management body of elected representatives and need support from other institutions.

The biggest competition is the private companies that have entered the agribusiness sector. They own or control all parts of the business value chain (except production) from the lower links right to the market link.  The small producer’s institutions should at least control the lower links of the value chainlike aggregation, husking, quality grading etc.  The large companies will source products from abroad unless our farmers are able to aggregate, add value, and maintain quality and time.

KVK initiatives in Farmers Producers Organization:

In order to promote the Farmers Producers Organization, KVK, Erode has designed a Farmers Calendar 2014-15, titled “Farming… Combine Your Passion With Professionalism” depicting idea about second level institutions for understanding and benefit of the farming community.

KVK promoted Farmers Producers Organizations in various commodities in different blocks of Erode District.

• Kazhani Farmers Producers Company Ltd
• Perundurai Farmers Producers Company Ltd
• Dimbam Dhaniya Farmers Producers Company Ltd
• Malai Millet Farmers Producers Company Ltd