Bengal initiative to turn farmers into entrepreneurs a success
The Bhangar Vegetable Producer Co. was incorporated in 2012 aimed at transforming farmers into entrepreneurs, which five years on, is a profitable enterprise
Kolkata: Mohammed Abdul Jabbar Khan hasn’t ever tasted many of the vegetables he grows on his farm at Bhangar, in suburban Kolkata. “I am told celery leaves are used in salads, but we don’t know how to use them,” he says.
The same is true of at least 1,750 farmers in Bhangar who came together in 2011 to form an enterprise under the leadership of Khan, now in his early forties. The Bhangar Vegetable Producer Co. Ltd was incorporated in September 2012 under a unique initiative aimed at transforming farmers into entrepreneurs.
Five years on, it is a profitable enterprise that has been retaining its earnings to expand operations. After paying a small dividend for two years, the company chose to hold back its earnings for the last two financial years as it is trying to accumulate Rs30 lakh to buy a plot of land, says Khan, who is chairman of the company.
The model is simple: the company exclusively buys the produce of its shareholders and sells it in the markets of Kolkata, through its own outlets as well as through stalls operated by state-run agencies. A substantial part is exported through private agencies.
“Because we have been able to standardize quality, export of vegetables from the state has grown manifold in the past few years,” says Nandini Chakravorty, secretary in West Bengal’s department for food processing and horticulture development.
Export of vegetables from Kolkata airport in fiscal year 2016-17 jumped 65% from the previous year to around 10,000 tonnes, according to a state government official who asks not to be named. The aim is to double it in five years, he adds.
With new markets opening up, farmers are now being encouraged to grow a wide variety of vegetables—ones that fetch better prices, both locally and in foreign markets.
For instance, farmers who typically grew cauliflower and cabbage in winter, are now growing broccoli, lettuce and even bananas because the returns are higher, says Sabir Ali, a young farmer who has created a space covered by transparent polythene sheets—locally called polyhouse—to protect his crop from rain.
When Bhangar Vegetable Producer Co. was conceived as an idea in 2011, the state created 117 groups with 15 members in each, and gave each group a grant of Rs25,000 under a central government-funded programme. These farmers eventually became shareholders in the companies when they were incorporated, and now own at least 50 shares each.
The farmers contributed around Rs10 lakh towards the Rs20 lakh start-up capital of the company—the other half was received as a one-time grant from the central government.
After the company took off, subsidies were provided to buy farm implements and vehicles. The company now owns 15 trucks to carry the produce of its shareholders to markets and this has helped snip out middlemen from the supply chain, says Abdur Sattar Mollah, another farmer.
With income from farming zooming, farmers in Bhangar invested in the company are now building more and more polyhouses to protect crops from rain. Each costs about Rs8 lakh, says Mollah, and the government provides a subsidy of around Rs5 lakh. “With training, we are now better farmers,” he adds.
The centre provides 60% of these subsidies; the state pays the rest, according to the unnamed state official cited above.
The experiment has so far been “very successful”, says Chakravorty, and encouraged by it, the state government is investing to revive facilities created to test and package raw fruits and vegetables for exports. Standardization of quality is paramount because the US and European markets are “very demanding” in terms of food safety standards, she says.
The model may have worked in Bhangar, but may not be replicable across India, says Prasenjit Bose, an economist and social worker. Farm income is not uniform across the country, he points out, adding that it is relatively higher in Bhangar.
Farmers elsewhere may not be able to invest to start a company, according to Bose. “And I am not sure such a firm has the management bandwidth to survive difficult years,” he adds.
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