This training material is prepared to understand the basics of Producer Group, its similarities and differences with Self Help Group, examples, types of PG, etc.

1. Training Material for Producer
Groups
Nirjumoni Dutta Bharali
Program Director, ICCo
Kangkan Kakati
Executive – Agri Value Chain

2. ProducerGroup (PG)
“Small producers are coming together for
their socio-economic growth and create
space in the market by adopting scientific
package of practices and value addition in
their produces”

3. 1. Homogeneous groups: locality, economic
condition, similar mind set
2. Economic upliftment: Income generation
activity
3. Producer organisation: Both SHG and
Producer Organisation can be federated as
Producers’ cooperative/Company/Federation
Similarities between SHG and
Producer Groups

4. SHG Producer Group (PG)
Number of maximum members: 20 (thumb
size)
Number of members should be more than 20.
There is no such limit. Generally, most of the
groups 25 to 30
Small savings is one of the major activities of
the members
Small savings can be an initial activity to start the
initial activities of the group; Shareholding is must
in the PG
In SHG, all members are not involved in similar
kind of produces
In PG, all members are involved in similar kind of
produces
All SHGs are not inclined to business All PGs must take up business activities
In SHG, generally, individual’s business plan is
being practised
In PGs, business plan has been prepared for the
group
SHGs gives more focus on livelihood than in
business
In PGs, business and livelihood are equally
important
SHG movement started in 30 years back PG movement is comparatively new
Access to market is not very focused in the case
of SHGs
Access to market is highly focused in the case of
PGs
Less scope of using technology High scope of using technology
Differences between SHG and
Producer Groups

5. Examples of producer groups
1. People who are involved in animal rearing ( pig, goat,
cow etc)
2. People who are involved in agricultural activities (
paddy, vegetables, sugar cane, mustard, turmeric, black
pepper etc.)
3. People who are involved in bee keeping
4. People who are involved in handloom and handicraft
5. People who are involved in embroidery
6. People who are involved in fish rearing
7. People who are involved in poultry
8. People who are involved in mushroom cultivation

6. There are two types of Producer Organisations---
1. Informal Producer Organisation:
 Organisation which is not legally registered.
 Organisation which is not a part of any legal organisation
 Informal organisation which runs only on the trust among
the members
2. Formal Producer Organisation---
 Registered under legal provisions like Cooperative,
Company
 Formal organisation needs to follow the rules and
regulations of the Government
Type of Producer Organisations

7. 1. Government has major policy level thrust on
Producer Groups
2. Most of the departments are operating through
Producer Groups
3. Producer Group can create self employability
4. Producers can get access to market through their
institution
5. Enhanced knowledge of the farmers on their
produces, value addition and market
Importance of Producer Groups at
present context

8. 6. Producer contributes in increasing productivity in the
state
7. Producer can contribute towards building climate
resilient environment by organic produce
8. 70% people in India leaves in rural areas. Rural produces
have a major role to play in the country to boost the
economy of the country. In the state of Assam, more
than 80% people are in rural areas.
9. Young generation does not involve themselves in farm
produces. Technological interventions in the producer
groups can attract young generation on production site.
Contd.

9. 1. Farmers do not get fare price in the market
2. Marketing services are not performed effectively
3. Prices are subjected to too much variability or
uncertainty
4. Marketing outlets do not exist or is undependable
for small and marginal farmers/producers
5. Lack of bargaining power of individual farmers
6. Possibility of obtaining subsidies– seed, fertiliser,
machinery etc.
7. Producer Group registered under legal entity can
access financial assistance
Why to form Producer Group by
small and marginal producers?

10. Why to form Producer Group
Association with
larger groups–
FPO/FPC/Federation,
State/national
organizations
Increase bargaining power,
negotiation capacity, increase
income, entering market-play role
in the market, access to benefits of
schemes and policies
Save- time, money,
labor, reduce cost,
increase social capital,
social binding
Coming together and
increase the cohesive
strength, generate
new ideas, explore
potential market,
Frame rules and
regulations
Entering a new domain by the
small and marginal producers
Saving starts through proper
planning
Journey starts to realise
the potential strength of
small and marginal
producers
More power to small
and marginal
producers

11. 1. Like minded people of above 18 years join their hands (more
than 20 people)
2. People who are involved in same kind of produce and related
value chain
3. Organise a meeting among the people and take resolution
4. Setting up of clear objectives of formation of producer groups
5. Each member will have to agree and show their willingness to
form the Producer Groups
Process of formation of Producer
Groups

12. 6. Prepare a bye law/take resolution on regular meeting
process
7. Identify president, secretary and treasurer with the
consensus of all the members
8. President, Secretary and treasurer are ready to take the
responsibilities
9. Members are ready to support the president, secretary
and treasurer
10. All members contributes to by the registers required for
record keeping
Contd.

13. 11. Members are ready to attend the relevant training
programmes organised by other organisations
12. Members are ready to enhance their productivity by
adopting scientific package of practices
13. Name of the Producer group
14. Opening of bank account
Contd.

14. 1. Meeting cum training Register
2. Cash Book & Cheque Book register
3. Sales & Purchase Register
4. General Ledger
5. Assets & Stocks Register
6. Custom hiring register
7. Members’ contribution register
8. Sub committee registers (If the PG feels the need of
committee wise registers)
Different registers required to maintain
records in the Producer Group

15. Elements of Successful Producer
Group

16. 1. Rongmon Handloom and Handicraft Producer Group is able to
attract the customers. Within 2 years, the income of the
members has increased from 2000 to 7000 per month. But, in a
recent visit by a group of people observed that the members
involved small children in the production process. Also, all the
members are not equally treated by the leaders of the
Producer Groups. The visitor highlights the issue in a local
newspaper.
2. Moromi producer Group is producing quality ginger. The group
has a very good market. One day, a group of official visits the
producer Group to provide support under a Government
scheme. The officials checks the record keeping system and
finds unsatisfactory.
Case study reading

17. 3. Sonipath Producer Group is known to everyone in the
district. Many people visited the group to learn from
them. But, in the last month, the group members raised
the issue of breaking the group and demanded their
dues. It came into the picture that, the leaders were
making money without the knowledge of the members
4. Bodung Producer Groups could not sale their tomato
due to Covid-19 pandemic. The leaders tried to connect
different buyers, but, there was no fruit of their
discussions. Finally, they have decided to learn the
technique tomato preservation and tomato puree
making. This new learning opened a new market for the
producer group
Contd.

18.  A clear and well written bi-law accepted by all the
members
 Roles and responsibilities are very clearly written– Role of
leaders; role of members
 Books of record are maintained at a regular basis
 Books of record are transparent
 Meetings are organised at a regular basis as decided by the
members ( monthly meeting); If required, emergency
meeting has been organised
 Governing body meetings/ General body are organised
regularly as written in the bi-law
 Leaders are elected/selected by the members
Establishment of Good Governance
system

19. 1. Participation of members in decision making process: There is
an environment in the meetings for equal participation of the
members. Members do not hesitate to speak and ask
questions
2. Role of leaders: The leaders are transparent, not dominating
and autocratic
3. Participation in new learning process: Members and leaders
are open to learn
4. Selection of leaders: There is always a transparent process in
selection of leaders
5. Formation of sub committee to perform the tasks: Different
committees needs to be formed with their clear roles and
responsibilities. They are– Planning committee; Marketing
committee; Procurement committee; Social committee. Role
of each committee should be decided through intensive
discussion among the members
What is Good Governance?

20. Stages of Producer Organisation/
Path of Producer Organisation
Initial stage/Early stage Intermediate stage/Mid stage Advance stage/Matured stage
• Informal meeting among the members
• Produce low value product
• No scientific approach
• Produces are sold in the nearby market
• Legal status of the organisation
• Adopts scientific approach
• Value addition and quality products
• Exposure to outside market
• Members owned the organisation
• Processing and branding
• Technology used
• Taking care of social issues and
managed challenges; Advocacy and
negotiate
Governance and management
• Lack of confidence on leadership and
management; Lack of trust among the
members
• No rotation on leadership
• Weak sense of ownership
• Weak in record keeping and accounts
• Trust on leadership and management
• Ready for rotation of leadership
• Good sense of ownership of the
members and leaders
• Control on the business of the PG
• Transparent and good in record
keeping and accounts
• Strong bonding and trust
• Leaders have the ability to run the
business with the support of members
• Strong ownership for the PG
• Strong in record keeping and accounts
management
Business development at different stages
• PG can not meet the expenses from
the profits– it looks for grants
• Business depends on single products—
no diversified products
• PG is not aware of value chain actor
• PG do not have capacity to influence
market- No sufficient products/ lack of
market knowledge
• PG starts earning profit
• PG has more than one products-
diversified products; value addition
starts
• Able to influence market and buyer
• Good relationship with value chain
actor
• Business is profitable and financially
sustainable
• Able to negotiate and maintain good
relationship with other value chain
actor
• Mutual benefit with value chain actor

21.  Why grading of a Producer Group is important ??
1. For financing of the Producer Organisation
2. Understand the strength of the Producer Group
3. Understand the future prospects of the Producer
Group
4. Uniformity in judgement of a Producer group
Grading tool of a PG– Grading for
financing and business development)

22.  The tool is divided into three phases based on 7 areas of concern. Considering
the number of parameters in each area of concern, and sustainability of an
organization, weightage is calculated for each of the areas of concern. The
areas of concern cover both internal and external management.
 Internal management includes: governance pattern, farmers’/producers’
satisfaction in different aspects (income, association, agricultural
practices/produce level etc.), profit sharing, risk management etc.
 External Management: External Management includes establish strong
linkages with other relevant stakeholder like whole sellers, supplier,
entrepreneur, Government organizations, financing, licensing, certification
etc., and necessary infrastructure development.
Grading tool of a PG– Grading for
financing and business development)

23. Contd.
Sl no Areas of concern Weightage
1 Governance (G) 20%
2 Backward and
Forward Linkage
(BFL)
15%
3 Planning and
Management
Process (PM)
10%
4 Compliance/Books
of record (BR)
12%
5 Scale up
plan/Business Model
(BM)
20%
6 Networking (N) 8%
7 Financial Resource
(FR)
15%
Total 100%

24. *In the first phase we are giving more thrust on Governance along with other few parameters
which is very much essential for trust building, bonding and cohesive decision, minimize conflict in the group.
Phase 1 (Setting up of PG)
Parameters Marks obtained by the PG (1-5, Consider 1 being the lowest and 5 being the
highest)
1 2 3 4 5 Remarks
Regular meeting (G) Here, we are talking about the bye law to
govern internal mechanism of the PG. (apart
from general bye law of the PG)
1. Non-negotiable principles of the
Producer Group that each producer will
have to follow (Do no harm to others)
2. Leadership rotation
3. Role of producer towards the PG
4. Role of PG towards producer etc.
Members present in the meeting (G)
Members agreed on individual
membership fee (FR)
Meeting minutes (BR)
Clarity on the role of president among
the members (G)
Clarity on the role of secretary among the
members (G)
Clarity on the role of treasurer among the
members (G)
Bylaw of the PG in place (G)
Open bank account and registered under
OLM (BR)
Sub committees are formed (G)
First general body meeting organized (G)
Business plan prepared by the PG (BM)
Clear objective of the producer group (G)

25. Parameters Marks obtained by the PG (1-5,
Consider 1 being the lowest
and 5 being the highest)
1 2 3 4 5
Working capital received from OLM (FR)
Efficient planning for utilization of working capital
(PMP)
Rotation of revolving fund/working capital (FR)
Selection/procurement of quality input (seed, feed,
etc.) (BFL)
Planning and execution of business plan started
(PMP)
Maintenance of books of record (BR)
Sub committees (input management committee, sale
committee, etc.) are functional (G)
Identification and communication of relevant
stakeholder (buyer, service provider, input supplier)
(BFL)
All members have clear ideas on the business plan
(PMP)
Regularity on general body meeting (G)
Conflict management system is in place (G)
Regularity of loan repayment by the PG members
(FR)
Phase 2 (Functional and operational management of the PG)

26. Parameters Marks obtained by the PG (1-5, Consider
1 being the lowest and 5 being the
highest)
1 2 3 4 5
Enhanced production and income of the
members (FR)
Recognition from various stakeholders
including family members (BFL)
Maintenance of quality produce and
demand increased(SUP)
Phase 3: Sustainability of PG

27.  A successful producer organization function as
 vehicles for change (social and economic life of people)
 and should be well embedded in networks that generate
ideas, resources and opportunities for the PG (Network
with value chain actors, Government and other
organisation)
 and people living in the area (Good impact in the locality)
 (Berdegue 2008).
Successful PG

28. THANK YOU
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Tel: 0120-4884700
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