Producer Company
Introduction:
With agriculture being the backbone of the Indian economy, the sector employs more than 50% of India’s total workforce and contributes almost 17-18% to the country’s GDP.
Considering the pressing issues of farmers and agriculturalists (collectively termed “Producers”) in India, like agricultural labour, technological advancements, policy changes, etc., and to bring in better governance and channelize the agricultural activities, the concept of “Producer company” was introduced in 2002.
Definition of Producer Company:
Producer Company allows farmers cooperatives to function as a corporate entity under the Ministry of Corporate Act.
According to the Companies Act 1956, the objective of the Producer Company is related to all or any of the following matters:
- Production
- Harvesting
- Procurement
- Grading
- Pooling
- Handling
- Marketing
- Selling
- Import/Export of primary produce
- The Members of the Producer Company can carry these activities by themselves or through other entities:
- Processing, including preserving, drying, brewing, distilling, vinting, canning and packaging of produce
- Manufacture or sale of equipment/machinery
- Providing education on the mutual assistance principles to its Members and others
- Offering technical services, consultancy services, training, R&D, and all other activities for the promotion of the interests of its Members
- Generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce ;
- Insurance of producers or their primary produce
- Promoting techniques of mutuality and mutual assistance
- Welfare measures or facilities for the benefit of Members as may be decided by the Board
- Other activities that may promote the principles of mutuality and mutual assistance amongst the Members in any other manner
- Financing of procurement, processing, marketing or other activities specified in clauses (a-j) which include extending of credit facilities or any other financial services to its Members
Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.
';