The Government, under the ‘Krishi Jagruti’ scheme should prepare the necessary legal and regulatory framework and also, reserve a percentage of the budget both at the Centre and the States to fund the initial stages of the land pooling, and development costs for making small unviable holdings into large viable farms, across the Country. Agriculture being a State subject, each State should be encouraged to follow the Central guidelines of the ‘Krishi Jagruti’ scheme and make it effective within their State. No tax other than GST as applicable need be collected from such Farms. A minimum GST, at say 1 percent for all, open/unprocessed and unpackaged products, is essential as it would allow for proper monitoring as required and at say 5/6 percent for all, packaged produce or processed and branded products.

This could extend to Pisciculture, Apiary, Dairy, Horticulture and Hydroponic/Aeroponic agriculture too and the assistance of many of the successful farmers, who have outstanding production results and very admirable environmental practices, be taken. Such farmers should be better recognized and honoured and called up on to join the overall development effort.

9. The land would need leveling and contouring for proper farming and irrigation and water harvesting etc. this will be taken up by the Management in the first year of Incorporation.

Hence, the Farmer Corporations/Companies may or may not payout any dividend the first year of operation, but from the second year, will payout a dividend as they deem fit and which is decided on after any non-binding suggestions from the shareholders but as finally decided by their Board. For most of the first year after Incorporation, most of the farmers will continue to farm their holdings for themselves. This time is required for the Management to tie up all the other details and execute necessary works as required in phases.

10. The Farmer Corporations/Companies could be financed as below, especially in the first two years when some unearned dividend would need to be distributed to avoid farmer distress. The Corporations can in the first year re-license production on the small plots it is going to integrate, back to the original farmer owners till the plot is actually taken over for integration and its boundaries erased. This will greatly reduce the amounts required (easily by up to 50 percent). The Corporations will also, raise long term loans from Banks, like NABARD, which in turn can receive refinancing from the Government, either directly or indirectly, and by also, combining the average annual total subsidies and losses it has incurred over the past three years both by the State and the Centre and pooling an equivalent amount into such a refinance scheme will increase the finance amounts available.

Such subsidy cum losses amounts can then be capitalized for say, three to five years and transferred to another Financial Institutional Fund, where it can be bundled as an asset and perhaps Bonds floated against these amounts. The loans such Farmer Corporations/Companies receive can be for a period of 7 years with the interest for the first 2 years capitalized and the loan and capitalized interest, be repayable over 5 years thereafter. Some shares of such Corporations, say 20 percent, could be allowed to be held by the Financial Institutions/Funds each of which could hold equity of upto, say 10 such Farmer Corporations/Companies spread over various regions to avoid risks. The shares of such Funds could be allowed to be traded in the Equity markets to allow better valuation of the share holdings of the constituent Farmer Corporations/Companies. This would then allow for the growth in the stock markets to also, reflect in the value of the individual Farmer Corporations/Companies and would thus also, enable them to directly raise funds from the Financial Institutions to further improve their operations once the initial loan is repaid.

Finally, when deemed appropriate, such Farmer Corporations/Companies could also, be allowed, under proper regulation to ensure the shares remain in resident Indian hands only, preferably still local and to ensure that this is not treated as short term investments, they must be locked in for at least 3 years on each transfer and, to enter the Stock Market through appropriately regulated Financial Institutions holding not more than 20 percent share holding in any one Farm Corporation and make their shares available there. This will provide a better valued exit option to those of the farmer shareholders who desire to do so.

11. The Farmer Corporations/Companies will strive to tie-up contracts with purchasers for their produce. As farmers in Punjab and elsewhere have done with Corporations like Pepsi, or undertake direct marketing themselves.
12. The Farmer Corporations/Companies will work with the Agriculture and Soil scientists to improve the soil, utilize the land efficiently to attain better productivity with due care for environmental issues.
13. The Farmer shareholders who may also, volunteer to work for the Company on the land should be remunerated as the Company deems fit. They, like the other shareholders, will also, continue to get dividends as declared. Existing Tenant farmers can also, be employed to work on the farm if they so choose and be duly remunerated therefor.
14. As much of the work as possible should be outsourced to properly selected contractors and the burden of cold storage, direct marketing, food processing and mechanization of farm work taken up directly by the Farmer Corporations/Companies only when it is deemed advantageous to it.
15. Farm Equipment suppliers (drip irrigation, pump-sets , pipelines,etc) and other suppliers can be asked to provide the facilities to be paid out as a long term (3 to 5 years) loan. The suppliers can raise their own funds against such a contract.
16. If the Farmer Corporations/Companies are large enough, they may themselves also, consider encouraging the setting up small enterprises, perhaps by the farmer’s families themselves backed by contracts from the Farm Corporations, to provide services in maintenance and operation on the farms and thus discourage emigration to urban areas and keep the families together. Their CSR efforts can easily benefit the locality. This will help encourage an equity culture in the locality / region.
17. The Farmer Corporations/Companies can work with the Government and Politicians (using MPLAD funds), on schemes, as approved by the General Body, which having a local influence, it can push for. To set up skilling centres and education and health facilities etc in the locality.

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