Producer Companies —— (3)

Posted on February 19, 2013 by SRRF

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.
 

 

[1] NRAA: Perspectives & Problems of Primary Producer Compnaies – Case Study of Indian Organic Farmers Producer Company Ltd, Kochi, Kerala; National Rainfed Area Authority, New Delhi , Pp18

Posted in FCRA, TAX, LEGAL | Comments Off on Producer Companies —— (3)

Manual Scavenging – New Act on Anvil

Posted on February 18, 2013 by SRRF

Govt. introduced the Prohibition of Employment as Manual Scavengers and their Rehabilitation Bill, 2012 in Parliament during Monsoon session. Previous Act of 1993, hardly made any dent in stopping or even minimizing the practice. This is demonstrated from the fact that there is not a single conviction under that Act.

2011 census compiled a data on the type of latrines in the individual household. As per the same, there are almost 25 lakh household who use dry latrine, and who are likely engage manual scavenging services one way or other. These include 7.4 lakh households across the country where humans are involved in the direct removal of nightsoil, 12.33 lakh households disposing night soil in open drains and 4.93 lakh households, where night soil is serviced by animals. Last two categories may not be directly employing the humans, however these persons are most likely to employ the services of humans subsequently.

While average of such household at national level only comes to 0.3%, however there are large variations, J&K (8.9%), Manipur (2%) and UP (1%).

SC recently criticized the Govt. for not banning practice of manual scavenging till now. The proposed Bill has made a district magistrate responsible to ensure that no person within his/her jurisdiction is engaged as a manual scavenger or constructs an insanitary latrine and manual scavengers are rehabilitated. It also makes it mandatory for municipalities, cantonment boards and railway authorities to construct adequate number of sanitary community latrines within three years of this Act coming into force. The Bill has provision to imprison / fine of Rs 50,000/-, if anyone employs a manual scavenger or constructs an insanitary latrine.

Recently around 1000 people marched over 63 days through 18 states, covering 200 districts demanding prohibition of this practice. Organisers claimed that around 3000 persons were liberated from this inhuman practice during the yatra.

________________________________       
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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Child Marriages – A novel way of curbing the same

Posted on February 15, 2013 by SRRF

To stop child marriages, last year Bharatpur administration came with a novel idea of mandating all printers printing wedding card, to make sure the date of birth of the Bridegroom and Bride are printed on the wedding cards. Not only that the printers were mandated to obtain proof of DoB and keep it in records. (How legal it was – probably another story). This measure was adopted by the administration just before Akshaya Tritiya date. In Rajasthan and several other north Indian states a large number of marriages take place. This helped in postponement of a number of marriages, as administration launched a drive to ensure that the measure was strictly enforced.

It is to be seen, whether the same measure would be found being adopted in other parts of the State, or if the Govt will succumb to the lobby it must have faced from the community. Or has the community found alternative ways to overcome this measure. One supposes, that while such measures may succeed in short-term certainly there is no alternative to enhancing education and long & sustained campaign of the ill-effects of the child marriage.

________________________________       
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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Producer Companies —— (2)

Posted on February 13, 2013 by SRRF

In this series on Producer Company we bring the legal aspect of formation. 

Introduction

The concept of Producer company was introduced in May 2002 by introducing a new Part IXA in the Companies Act. The provisions from S. 581A – 581ZT were based on YK Alagh Committee’s recommendations.


Who can form a Producer company?

  • Any 10 or more individuals, each being a producer relating to primary produce can form a Producer company.
  • Any 2 or more producer institutions (an institution primarily having only
    ‘producers of primary produce’ as members) 
  • Any combination of individuals or producer institutions mentioned above.

For which Primary Produce a Producer company can be formed?

  • These activities generally would include agriculture sector (including animal
    husbandry, horticulture, floriculture, pisciculture, viticulture, forestry,
    forest products, re-vegetation, bee-raising).
  • Any primary activity which promotes the interests of the farmers.
  • Produce of persons engaged in handloom, handicraft and other cottage industries.
  • Any product / by product resulting from any of the above activities.
  • Any other activity which enhances the production of the above-mentioned
    activities.

What is the Status of a Producer Company?

  •  It is a company registered under Companies Act and will have ‘Producer Company Limited’ included in its name.
  • Since it is a limited liability company, the liability of members would be
    limited to the shareholding amount. 
  • Registrar of Companies Act will be the registration authority.
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Managing Crop Insurance

Posted on February 7, 2013 by SRRF

Farmer suicide is yet another indication of risky nature of farming, and one reason why many farmers wish to exit farming. Despite India having the largest programme of crop insurance in the world with more than 25 million farmers insured annually, it still does not generate confidence among farmers as a major support during crisis situation. Major reasons for this lack of confidence are:

  • Delay in payments to farmers are based on Crop yield measurements, which are quite time consuming, resulting in delayed settlements. Thus farmers who have suffered crop losses are not only unable to repay debts but also cannot access formal sector finance.
  • Crop yield data also goes through several levels, resulting in not only delays, but also manipulation by unscrupulous elements within the chain.

Agriculture Insurance Corporation of India, along with Rajasthan & Maharashtra govts and World Bank Team are recently testing a pilot scheme, under which GPS and video-enabled mobiles are used to record the harvest. It has developed a specific app, which enables recording and transfer of data from the farmers’ fields to Insurance company’s server. The data is then uploaded for consolidation and analysis. This is likely to hasten the process and enable a farmer who otherwise gets his compensation only after several months, within a few days.

As revealed in the latest ASER report, learning is a huge challenge and should be the focus for the Govt. Now that it is moving in achieving the infrastructure targets.

________________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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Producer Companies —- (1)

Posted on February 6, 2013 by SRRF

A Producer Company is a new format of structure devised to improve the working of agriculture sector. Over next few posts, SRRF Dialogue will look at this structure, its origins, current status and likely future developments. Hope the members would find this useful.


Introduction

A Producer company is a corporate structure. It allows producers of primary produce (farmers, dairy-products producers, etc.) to organize themselves into a corporate entity.


Inspite of India mainly being an agrarian economy, as we all know that agriculture has become a sector from which a large number of farmers wish to exit. This is ironic considering that a number of corporates have entered into this business seeing the profits[1].One of the reasons for this, is that value addition to a product occurs only after the farmer has already exited after sale of his primary produce, hence s/he cannot share in these profits.


Historical Evolution


Recognising the above need, cooperative option came early into picture and was encouraged by the Govt, however experiment with cooperatives failed (today rather than being a panacea of problems of the farmers, large & successful cooperatives are few & numbered. This happened because one, they were considered more on the lines of welfare rather than undertaking business on commercial lines. Secondly the overpowering control of the state govts through Registrar of Cooperatives over these institutions throttled the growth of the very institutions it was supposed to nurture[1]. Most cooperatives need to take permission from the state govts for a number of activities, sometimes even for opening of offices, investment of surplus funds, issue of bonus shares, appointment of auditors, etc.


Thus the idea of a Producer company came from the felt need for an alternative institutional framework, free from regular interferences and which could easily undertake commercial transactions. Companies (Amendment) Act 2002 gave birth to a legal structure called ‘Producer Company’. It would be unfair, if the name of Dr YK Alagh is not mentioned here, who was the chairman of the Committee which gave recommendations and hence became part of Companies Act.


Legal features of incorporating Producer Company will be covered in the next Post

 

[1] A Study Paper titled ‘Producer Company Model – Current Status & Future Outlook : Opportunities for Bank Finance’ by EV Murray, Faculty Member, RBI, College of Agricultural Banking, Pune.

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SSA REPORT CARD

Posted on February 5, 2013 by SRRF

Allocations have arisen considerably in last three years.

  • 2011-12 :             Rs 55,746 crores  (30% increase over previous year
  • 2010-11 :             Rs 42,926 crores  (64% increase)
  • 2009-10 :             Rs 26,169 crores

While since 2009-10 there has been an increment of almost 113%, achievements seem to confirm the ASER finding that focus of SSA has been on infrastructure development rather than on learning. Since 80% of overall allocations in 2011-12 have gone towards teachers and school infrastuture.

First of all the achievements:

  • Most States have met the access norm of a primary school within 1 km of a habitation.
  • 52% primary schools have the mandated pupil-teacher ratio of 30:1.

These are no mean achievements considering the size and the population-density diversity of the country.

Major challenges in terms of targets remain,

  • 60% schools in Odisha, Karnataka & Jharkhand do not have a functional toilet.
  • Obviously 48% schools still have not achieved the mandated teacher-pupil ratio.

As revealed in the latest ASER report, learning is a huge challenge and should be the focus for the Govt. Now that it is moving in achieving the infrastructure targets.

________________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in

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Gujarat Urban areas – Sex ratios are declining sharply

Posted on February 2, 2013 by SRRF

As per Census 2011 most of the major urban centres in Gujarat showed skewed child sex ratio. The worst among them is the Surat District with 788 females to 1000 (2001: 810). This is for the district as a whole, for urban areas it is only 757. Kutch District which is fast industrialising the ratio has come down to 907 from 942 in 2001. This is despite the fact that population of urban areas has grown faster than the rural areas of these districts, but sex ratio has come down considerably.

The Child-sex ratio of the 5 worst districts are, Surat, 836, Mehsana 845, Gandhinagar 847, Rajkot 854 & Ahemdabad 859.

While the best districts are The Dangs 963, Tapi 944, Dahod 937, Narmada 937 & Valsad 926.

The above is indicative of the country-wide trend that more & more urban areas, with large facilities of scan facilities are falling victims to the worsening sex-ratios. The NGOs working in these areas should consider undertaking projects with the concerned civic agencies to develop strategies for ensuring that such centres are monitored effectively to minimise gender selection tests.

In this regard, please refer to earlier post on SRRF Dialogue which highlighted how Kolhapur administration was able to reverse the declining child sex ratio using a software called ‘silent observer’ at various scan facilitiy centres. http://blog.srr-foundation.org/?p=568

________________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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BRICS to launch a new Development Bank

Posted on February 1, 2013 by SRRF

BRICS (consisting of Brazil, Russia, India, China and South Africa) is planning to launch a new Development Bank. The idea formally launched last March in a summit meeting of the leaders of the five emerging economies.

Presently a working Group has been set up, which will submit a report to the five finance ministers of the country, who will work on the final draft, before submitting it to the heads of the Govts. coming March at the summit in Pretoria in South Africa. While initially the World Bank was a bit doubtful of its viability has now officially stated that it will work in partnership with any such Bank. There are a number of challenges, including conflicting interests. For example China has been promoting the international status of its currency, Yuaan. Brazil already has a large development Bank, while India wishes to bring in more capital in the country. However consensus is emerging on a number of other issues, like the amount that each country will commit to the Bank. The Bank is likely to have a committed capital of around $240-250 billions. Further other areas where the Bank will be hosted is yet to be decided, though it is decided that it will be one of the BRICS country.

 ________________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place, New Delhi – 110008
e-mail: socio-research@sma.net.in

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Improvements in Economic Front – Census 2011

Posted on January 26, 2013 by SRRF

Household census of 2011 has thrown some interesting details, which indicates a definite progress in standard of living alongwith several contradictions. Here are a few facts for you to chew upoin:

  • Total number of houses in the country 26.93 crores, of which almost 2.5 crores are vacant.
  • 29% of the houses counted have become sturdier with concrete roof. In 2001 this was only around 19.8%.
  • It may be noted that 18% houses do not have any specified assets (radio, TV, computer, phone, means of transport including a bicycle).
  • 63.2% own telephone connection up from mere 9.1% in 2001.
  • In 2001 half of the Indian households did not own any of the specified mode of communication, By 2010 as mentioned 63.2% own telephone connections, 47.2% own television, 19.9% own radio / transistors.
  • Only 9% households own computers. Here there is a big divide between rural / urban. 20% households in urban areas own computers, while only 5% in rural areas. Of the 9% owning computers only 6% have internet connection. However with internet connection available in large number of mobiles, perhaps figure for interconnectivity needs reconsideration.

And the contradictions:

    • Only 32% of household have access to treated water. 33.5% still rely on hand-pump water.
    • 67% of households have electricity as the main source for lighting, while as many as 31% still rely on kerosene.
    • Still 53.1% households do not access to toilets. (also see our earlier post on this http://blog.srr-foundation.org/?p=737 )
    • 41.6% still do not have bathing facility in their houses, while another 16.4% have bathing facility but it is not covered.
    • Only 18.1% have closed drainage facility, 33% have open drainage, while almost 50% have no drainage in the houses.
    • While 28.5% have LPG/PNG connections, 49% use firewood.
    • With all the talk of financial inclusion, with more than 41% households not using any banking facility, challenge remains huge.

The above facts give you enormity of the tasks that any Govt faces in trying to reach out or getting those benefits to people.

________________________________
Socio Research & Reform Foundation (NGO)
512 A, Deepshikha,
8 Rajendra Place,
New Delhi – 110008

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