Institutional Synergies in Processing and Value Addition: Role of a Producers’ Organisation in Transforming Farm Economy in Rural Punjab^§

The study has highlighted the role of a producers’ organisation, namely Farm Produce Promotion Society (FAPRO), in improving farm economy in rural Punjab. The study conducted in the Hoshiarpur district of Punjab during 2010–11, is based on the primary data collected from 140 farmers and has examined the change in cropping pattern and increase in income and employment due to value addition at farm level, as against cereals cultivation in the state. It has observed that turmeric as a high-value perennial crop occupies 26.4 per cent area of GCA and the gross return of turmeric was almost double of the return from rice and wheat. The establishment of FAPRO for value addition of turmeric has raised the farm income and employment compared to rice-wheat cropping system. The FAPRO adds value through powder making of turmeric and selling rhizomes for seed purpose. The Society has also been found to capitalize through other value-added activities. Field study has indicated that FAPRO needs a strong policy intervention with linkages between farm and the factory through skill development, increase of capacity utilization, mechanization of processing process, development of storage facilities, increasing of operational efficiency and reduction of overhead cost with proper post-harvest management. It will encourage farmers to continue turmeric cultivation in the cropping system of Punjab. Such farmers’ organisations need to be replicated in other parts of the country in the co-operative sector.