Producer Companies —— (3)

In this series on Producer Company, the following post covers status of various Producer companies as being practiced in India. The data has been collated for information of SRRF Dialogue members from search on Internet. Hope the members would find this useful.

Cooperative Features – One Man One Vote

One of the cooperative concept of ‘one man one vote’ has been retained in Producer company. This is unlike any other corporate, where share holding is the basis of voting, however in producer company a member has only one vote
irrespective of his/her shareholding.

One of the important features of Producer companies is that these cannot be taken over by outsiders, since only producers can be the members and voting based on one man one vote principle.

These are hybrid between a private company and a cooperative. There is no limit
of maximum 50 members as in the case of private companies.

Business Status of Producer companies

Despite obvious benefits of Producer company so far around 150 companies have been incorporated[1]. Some illustrations given below:

• One of the first Farmers’ Producer company formed in 2004 belongs to Kerala, called Indian Organic Farmers Producer Company Ltd. It deals in organic products. Only producers with organic certification are eligible to be members. It not only sells the products of oits members, but also advises them on soil and water, scientific production methods, etc.

Presently there are more than 2500 members. Members are from different states in southern India. Though a member can have as many shares as they wish, however each member has only one vote, One share costs Rs 1000/- (shares are not tradable on stock exchange) and entitles a member to sell goods upto Rs 40,000/- through the company. Company declares dividend, which is limited to 20%.

• Indian Farmers’ Movement (INFARM) has promoted two Producer companies,
  Vanilla Indian Producers Company Ltd (VANILCO) and Banana India Producers Company Ltd. Both companies not only serve the interests of its farmer members, but also promote the products. Vanilco which has more than 3000 shareholders procures its members produce, and undertakes marketing of the same.
• Another Kerala based Producer company is involved in multi-faceted activities. ESAF Swasraya Producers Company Ltd has a number of activities, including handicrafts, herbal & agriculture and Food, Dairy & Meat.   
• In MP, under District Poverty Initiatives Programme, 17 different producer’s companies (15 crop based, 1 Milk & 1 Poultry) were promoted, (EV Murray, 2008). Each from different region of the state. These producer companies operate as commodities institution with forward and backward linkages to induce market driven agriculture to help farmers obtain better prices. Since these companies have professional management, they are able to collaborate with different institutions to provide farmers with better seed variety, training and knowledge of better cropping practices.[2]
• Matusuta Producer Company is formed of about 2500 women tasar yarn weavers from Jharkhand, Bihar & Chattisgarh mainly drawn from Pradan promoted SHGs.
• Development Support Centre, Ahemdabad has set up a Producer Company in Dhari, in Amreli district of Gujarat, comprising of over 1000 farmers.