Palladium India to focus on transforming FPOs business operations

Palladium Group, a global impact firm, will focus on transforming farmer producer organisations (FPOs) business operations, including their export-oriented approach, in the second phase of its Promotion and Stabilisation of Farmer Producer Organisations Project (PSFPO) project. 

In this phase which will run till 2026, it will implement the memorandums of understanding (MoU) signed by the Odisha Government and private players with farmer producer organisations (FPOs). 

The primary objective of the second phase is to catalyse a transformative shift in FPOs’ business operations. This entails achieving a 30 per cent growth in the average annual turnover, securing a $50 million investment from the private sector, involving 500 FPOs in online market systems, establishing a $10 million infrastructure for FPOs through various schemes and registering 1,000 FPOs on the online portal to avail scheme benefits, said Amit Patjoshi, CEO, Palladium India.

Export-oriented approach 

“Some of the MoUs are in effect through export houses wherein they have committed to ship out vegetables or horticulture products from Odisha. The second phase will focus on streamlining this export-oriented approach for all those FPOs. Providing access to finance for the FPOs is also a set target for the second phase,” he said in an online interaction with businessline.

Palladium, earlier known as GRM International before multiple groups combined to form the development sector advisory, focuses on creating a positive impact. In operation over the past 60 years, it operates in 90 countries and predominantly works with USAID, FCDO (UK’s Foreign, Commonwealth and Development Office), DFID (UK’s Department for International Development) and Australian Aid. At least 80 per cent of its revenue comes from these agencies. 

“We are delivery partners for such bilateral agencies. We have hub offices in 72 countries, including India. We have a hub office in Pune. We have been here for almost 20 years,” he said.

In India, it has a joint venture with Pune-based Sakaal Media Group. Over the past six years, it has attempted to develop a particular region in Maharashtra for positive impact. This has seen Palladium shift from health and economic growth and enter transportation and agriculture. 

Contract farming

“Globally, some of the pioneering areas in which we work are agriculture and agri-livelihoods, disaster management, economic growth. And that’s where we are trying to replicate that in India,”  said Patjoshi.

Palladium’s primary project launched in India was in agriculture and it has trained over 2.8 lakh farmers in Maharashtra. It was a mandate from the National Skill Development Corporation (NSDC) in contract farming and various other innovative technologies and process. “Then in 2017, the FPO concept was not there. We went beyond our scope to create positive impact and created farmer producer companies and provided access to finance to them,” he said.  

NSDC had a government-to-government agreement with Maharashtra and Palladium executed it. It was highlighted in the Limca Book of Records for the most number of farmers taking part in training across locations. In this, farmers were provided skills in taking up contract farming.

Not only were farmers trading but the focus was on creating business plans. “I think 230-odd plans were provided access to finance,” the organisation’s CEO said.  

Work with BMGF

This was followed by an engagement with the Bill and Melinda Gates Foundation (BMGF), in which PSPFO promotion of FPOs in Odisha was the primary objective. With the Union Government announcing that 10,000 FPOs will be set up, BMGF came up with the idea of supporting the Odisha government in creating a holistic ecosystem development approach. 

“It was not just working on training FPOs but identifying and training them. But what about the enabling environment required in building the ecosystem for government? Whatever environment is required to bring the market to a level, bring that. And our approach was a markets-led system,” said the Palladium India CEO. 

The group works from the market side first to address the ground problems, be it health or agriculture. That’s where Palladium began its intervention in Odisha with its team of 180 across the country with agriculture as its strongest portfolio.

The general approach is to understand the market’s requirement and then orient the supply side. “For example, for exports we work from market side to identify what are the requirements, whether it is mangoes or vegetables and which are the markets looking for this,” he said.

Multi-level approach

It then looks at the ecosystem requirement and ensures that farmers stick to these needs. The project was for three years from October 2020 to September 2023. It was aimed at making an FPO a single window service centre for the farmers. “Despite initial roadblocks and major challenges, the project made significant strides in integrating FPOs into the agricultural landscape and promoting sustainable agriculture practices,” said Patjoshi. 

Palladium India adopted a multi-level approach in the Odisha project to bring structural and institutional changes within the FPO ecosystem.  Concerted efforts were made to enhance linkages and engagement among key stakeholders within the FPO ecosystem. “More than 60 FPOs were linked with the private sector and saw a 12-18 per cent increase in price realisation due to institutional market linkages,” he said.  

Milestones

Farmer-centric business models were demonstrated at the FPO level with 252 FPOs trained in business operations, legal compliances, governance and access to finance. “Fifteen schemes were mapped for FPOs and trainings were conductedfor Nabard, Nafed and State agencies such as Odisha Livelihood Mission and Odisha Rural Development and Marketing Society. 

The PSPFO project achieved many milestones including the launch of 11 FPO-centric schemes by the Odisha government with a budgetary provision of $126 million. MOUs were signed with 31 private companies to boost agri-marketing through FPOs. A “Centre of Excellence for FPOs” was set up under Odisha University of Agriculture Technology. 

A dedicated compliance cell and web portal were also developed for the smooth functioning of FPOs. Outcomes such as a 150 per cent increase in credit flow to the FPOs and integration of over 600  FPOs with a performance review system were instrumental in making this an impactful project.  

The first phase brought to the fore some key successful strategies for strengthening the FPO ecosystem. This includes integrating planning and accountability across departments, conducting capacity-building at all levels, urging banks to utilise the Odisha Credit Guarantee Fund, forming FPOs based on commodity and market surplus clusters, increasing women’s enrolment, and integrating agricultural technology for improved value chain efficiency. 

Gender balance

An important aspect that Palladium covers in such projects is ensuring gender balance. Globally, most of its programmes have 50-55 per cent of gender coverage. “In the Maharashtra project, we achieved around 30-35 per cent of women participation. Our interventions are also focused on women farmers,” said Patjoshi.

Palladium and BMGF are also engaged in the North-eastern States except Sikkim. “It is an engagement that started 5-6 months ago. We are one of the CBBOs (cluster-based business organisations) under Nabard and Nafed covering one city in Maharashtra, one in Gujarat and a few cities in Odisha. That is our spread in agriculture” said Patjoshi.

Though the organisation is dealing with 600-odd farmers in Odisha, roughly around a lakh or more farmers are directly in touch with it, the CEO said.