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Published online: 2 January 2016
© Indian Institute of Management Calcutta 2016
Abstract Producer companies are popularly known as New Generation Co-operatives (NGC). A producer company combines the characteristics of a private limited company and a cooperative society. It integrates the valuable features of cooperatives with the efficiency of a corporate company. The case is about Luvkush Crop Producers Company Private Limited (LCPCL), a producer company operating in Raisen district of Bhopal, Madhya Pradesh (MP). The company is incorporated under Madhya Pradesh District Poverty Initiative Project (MPDPIP) with the help of the facilitating agency Action for Social Advancement (ASA). The company is engaged in production, procurement, marketing, selling, storage, processing, packaging, distribution, and trading of all agriculture produce. Small and marginal farmers in Madhya Pradesh have been susceptible to risk in the agriculture production. Producer company model is rising to integrate them into the value chain with the objective of increasing income. This case explores the potential of LCPCL as a collective institution. LCPCL is bringing change in the livelihood of small and marginal farmers by collective action. The major challenge in front of LCPCL is to generate sufficient capital.
Keywords Producer company * Collective action * Value chain * Livelihood * Marginal farmer
Introduction about producer company
Producer Company was introduced in 2002, by the insertion of a new part IX-A into the Companies Act 1956 (in section 581). Producer companies are also known as hybrid company, combines the characteristics of a private limited company and cooperative society (Dwivedi and Joshi 2007). The act of producer company came to retain the desirable structure of cooperatives while at the same time empowering the primary producers to have flexibility, freedom and efficiency of the private limited company (Singh 2008). In a Producer Company, only persons engaged in an activity related to primary produce can participate in the ownership. Only primary producers can participate in the ownership of such company. Primary produce can be understood as a produce of farmers arising from agriculture and allied activities including horticulture, viticulture, floriculture, animal husbandry, pisciculture, forestry, re-vegetation, forest products, bee raising, and farming plantation products: produce of persons engaged in handloom, handicraft and other cottage industries: by-products of such products; and products arising out of ancillary industries...