Asmanjas Case Study

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Case study on Asamanjas.
    Sustainability issue: FPO Blues About ICCo  ICCo India is a not-for-profit development organization based in New Delhi. ICCo stands for „ Innovative Change Collaborative ‟  in its vision and operational principles as it believes that innovative strategic thinking and collaborative efforts are the key to bring about the desired change in our society and systems. Overall, ICCo ‟ s work is grounded by the twin core principles of: Securing sustainable livelihoods, and justice and dignity for all. For the past 35 years, ICCo has built its expertise in providing solutions that are innovative, sustainable and aimed at improving the lives at the base of the pyramid  population across India through the participation of multi stakeholders including the  private sector. Besides supporting work aimed at creating developmental impacts, ICCo also offers a wide range of expert and responsive technical services to civil society organizations (CSOs), governments, donors and private sector organizations. Vision  To be a high quality, benchmark resource, supporting social enterprises and businesses that ensure fair and sustainable development Mission  We will enable fair and sustainable development by:    Designing and supporting innovative ideas and solutions in strategic collaboration with diverse stakeholders    Adherence to the highest quality standards in all spheres Context and Background   Challenge  Enhancing agricultural livelihoods is an important challenge in a country with the world ‟ s largest farming population (including small and marginal farmers whose   income growth has remained modest or stagnant in the twenty-first century). This despite Indias role as world leader in the production of several agricultural commodities. While co-operatives have served the sector well in the past, governmental interference, poor reach (only 1 in 5 farm households are estimated to have availed services of co-operatives), elite capture, and organizational challenges have necessitated the launch of new institutional forms to meet certain contemporary challenges concerning enhancing farm incomes through collective action. With a new legal framework in place producer collectives (co-operatives and companies) and Farmer Producer Organizations (FPOs) have been contributing valuable services to the agricultural value chain. The SFAC (Small Farmer Agribusiness Consortium) figures indicate a reach of 887427 farmers in 30 states organised through 879 (483 registered, 396 under registration) FPOs with over 21 civil society organizations providing technical and organizational support for the last 4-5 years. The Companies Act of 2002 went into effect in India, creating a new kind of legal classification for companies termed “producer companies.” Under this law, small -scale farmers that form  producer companies face many legal hassles and do not have a conducive political climate for their businesses. For example, they are limited to accessing loans, grants and subsidies and are not able to access private equity under the current system. Since they are not viewed as part of the private sector but are seen as something more akin to NGOs, early stage companies have little to no access to support or incubation. These issues have been the centre of debate in the Indian government and yet, with the ruling and opposition parties saying exactly the same thing, they hardly ever reach a consensus. We need to identify a way of dealing with these externalities. Various policies implemented in the agricultural sector have not been able to make a serious dent in the farmers  crisis. These  policies need to be scrutinised given the paucity of information regarding how various actors  perform under a policy umbrella in terms of reaching benefits to the farmers. An issue dogging the new generation collectives involves the financing and working capital not reaching them. The need of the hour is identifying how subsidies actually work and whether the issue of subsidies not reaching the collectives is embedded within the FPOs per se, or if it is a weakness in the implementation process. Strategies and Approach by ICCo  ICCo has created a 36-month incubation process, specifically for early-stage producer companies that facilitate access to certain market players and finance. As part of the incubation process, ICCo has created a rating and assessment tool in collaboration with SCOPE insight. All producer companies receive a rating at the beginning and end of the incubation period. This rating helps them gain access to finance from banking institutions and private funders.  ICCo’s Stra tegic Pilot on Incubating Producer Companies  In 2013, ICCo launched a Strategic Pilot on „ Incubating Producer Companies ‟  to bring about a paradigm shift in the way Producer Organizations are promoted in the country through the following three- staged approach. The pilot focused on moving away from a Capacity Building Approach for PCs, which need to  be treated as business organizations. The pilot provided immense learning on the best practices to be adopted for incubating POs. Technical Approach: Business Incubation  ICCo takes a Business Incubation Approach that is clearly differentiated from a capacity  building approach. The difference lies in two major fronts. While the former is a traditional approach of first forming the companies and subsequently working on the Business Plan, the BI approach empathizes on conducting a market survey and a Value Chain Analysis first and then  based on requirement form companies.  The former focuses on providing trainings, exposures, learning programs etc, the later approach is more comprehensive, professional and business oriented with a clear exit plan for the support organization once financial linkages are established. And, in order to establish this exit after financial linkages, it is necessary to work on NINE core parameters enumerated below: 1.   Internal Management 2.   Operations 3.   Financial Management 4.   Market 5.   Supply Chain 6.   Identify and plan to minimize External risks 7.   Continuous improvement of Financial Performance 8.   Identify and optimize use of Enablers and 9.   Focus on Sustainability
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