Empowering Small and Marginal Farmers: Unveiling the Potential and Addressing Obstacles of Farmer Producer Organizations in India

Sushant Malik

1. Symbiosis Institute of International Business, Symbiosis International (Deemed University), Pune, Maharashtra, 412115, India
2. Gokhale Institute of Politics and Economics, Pune, Maharashtra, 411004, India

Dilip Kajale

Gokhale Institute of Politics and Economics, Pune, Maharashtra, 411004, India

DOI: https://doi.org/10.36956/rwae.v5i1.994

Received: 2 December 2023; Received in revised form: 6 February 2024; Accepted: 18 February 2024; Published: 1 March 2024

Copyright © 2024 Sushant Malik, Dilip Kajale. Published by Nan Yang Academy of Sciences Pte. Ltd.

Creative Commons LicenseThis is an open access article under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) License.


Farmers' organizations worldwide are essential, ensuring collective bargaining power, sustainable practices, and knowledge-sharing. This supports small farms in commercializing and meeting the growing global demand for better and more diverse food choices. India is also experiencing an increase in Farmer Producer Originations (FPOs), crucial in enhancing economic opportunities for small and marginal farmers. FPOs provide a host of services to members, like input supply, procurement, marketing, technical services, financial services, etc. The study delves into the existing literature and policy landscape surrounding FPOs and their role in the economic development of small and marginal farmers in India. This study also analyses the problems and obstacles concerning the growth of FPOs and provides a future direction. Twenty semi-structured interviews were conducted with leaders of the FPOs to understand the background, issues, future goals and member expectations. The results suggest that lack of working capital, poor management, absence of skilled professionals, and dependency on external agencies are the significant problems FPOs face; there is also a need for proactive government support. There needs to be more literature concerning the auxiliary services of FPOs. As the Indian government plans to add ten thousand FPOs in the next few years, the government needs to address the issues regarding lack of working capital, develop a comprehensive database of FPOs, establish performance metrics and determinants, provide management skill assistance, streamline licensing procedures, and foster social capital building initiatives. This research sheds light on the potential of FPOs to empower small and marginal farmers and suggests vital measures for the effective implementation and sustainable growth of these organizations.

Keywords: Farmer producer companies, Farmer collectivization, Rural development, Sustainable development, India


[1] Hellin, J., Lundy, M., Meijer, M., 2009. Farmer organization, collective action and market access in Meso-America. Food Policy. 34(1), 16–22. DOI: https://doi.org/10.1016/j.foodpol.2008.10.003

[2] Moustier, P., Tam, P.T.G., Anh, D.T., et al., 2010. The role of farmer organizations in supplying supermarkets with quality food in Vietnam. Food Policy. 35(1), 69–78. DOI: https://doi.org/10.1016/j.foodpol.2009.08.003

[3] Bizikova, L., Nkonya, E., Minah, M., et al., 2020. A scoping review of the contributions of farmers’ organizations to smallholder agriculture. Nature Food. 1, 620–630. DOI: https://doi.org/10.1038/s43016-020-00164-x

[4] Planting the Seeds of Prosperity [Internet]. Livemint [cited 2022 Jun 15]. Available from: https://www.livemint.com/Politics/fW2Pw8ziSw8mFsElM8AEnM/Planting-the-seeds-of-prosperity.html

[5] Vahoniya, D.R., Vahoniya, N.D., Halpati, J.R., 2022. Farmer producer organisation (FPO): A conceptual study about farmer producer company (FPC). Asian Journal of Agricultural Extension, Economics & Sociology. 40(10), 1185–1197. DOI: https://doi.org/10.9734/AJAEES/2022/v40i101676

[6] Mukherjee, A., Singh, P., Ray, M., et al., 2018. Enhancing farmers income through farmers' producers companies in India: Status and roadmap. The Indian Journal of Agricultural Sciences. 88(8), 1151-1161. DOI: https://doi.org/10.56093/ijas.v88i8.82441

[7] Bikkina, N., Turaga, R.M.R., Bhamoriya, V., 2018. Farmer producer organizations as farmer collectives: A case study from India. Development Policy Review. 36(6), 669–687. DOI: https://doi.org/10.1111/dpr.12274

[8] Prabhakar, I., Manjunatha, B.L., Nithyashree, M.L., et al., 2012. Farmers producer company—An innovative farmers’ institution. Environment and Ecology. 30(2), 427–430.

[9] Agriculture for Development [Internet]. World Bank [cited 2022 Nov 19]. Available from: https://openknowledge.worldbank.org/server/api/core/bitstreams/8d8ad2dd-5c98-5042-8aad-744fdd7b034f/content

[10] Neti, A., Govil, R., Rao, M.R., 2019. Farmer producer companies in India: Demystifying the numbers. Review of Agrarian Studies. 9(2), 92–113.

[11] Larbi, T. O., Cofie, O., Amoah, P., et al., 2014. Strengthening urban producer organizations for innovative vegetable production and marketing in West African cities: experiences from Accra, Chana and Ibadan, Nigeria. Acta Horticulturae. 1021, 167-180. DOI: https://doi.org/10.17660/ActaHortic.2014.1021.14

[12] Bernard, T., Spielman, D.J., 2009. Reaching the rural poor through rural producer organizations? A study of agricultural marketing cooperatives in Ethiopia. Food Policy. 34(1), 60–69. DOI: https://doi.org/10.1016/j.foodpol.2008.08.001

[13] Fischer, E., Qaim, M., 2012. Linking smallholders to markets: determinants and impacts of farmer collective action in Kenya. World Development. 40(6), 1255–1268. DOI: https://doi.org/10.1016/j.worlddev.2011.11.018

[14] Gyau, A., Mbugua, M., Oduol, J., 2016. Determinants of participation and intensity of participation in collective action: Evidence from smallholder avocado farmers in Kenya. Journal on Chain and Network Science. 16(2), 147–156. DOI: https://doi.org/10.3920/JCNS2015.0011

[15] Ombogoh, D.B., Tanui, J., McMullin, S., et al., 2018. Enhancing adaptation to climate variability in the East African highlands: A case for fostering collective action among smallholder farmers in Kenya and Uganda. Climate and Development. 10(1), 61–72. DOI: https://doi.org/10.1080/17565529.2016.1174665

[16] Ochieng, J., Knerr, B., Owuor, G., et al., 2018. Strengthening collective action to improve marketing performance: Evidence from farmer groups in Central Africa. The Journal of Agricultural Education and Extension. 24(2), 169–189. DOI: https://doi.org/10.1080/1389224X.2018.1432493

[17] Minah, M., Malvido Pérez Carletti, A., 2019. Mechanisms of inclusion: Evidence from Zambia’s farmer organisations. The European Journal of Development Research. 31, 1318–1340. DOI: https://doi.org/10.1057/s41287-019-00212-8

[18] Widadie, F., Bijman, J., Trienekens, J., 2021. Value chain upgrading through producer organisations: Linking smallholder vegetable farmers with modern retail markets in Indonesia. International Journal on Food System Dynamics. 12(1), 68–82. DOI: http://dx.doi.org/10.18461/ijfsd.v12i1.76

[19] Trebbin, A., Hassler, M., 2012. Farmers’ producer companies in India: A new concept for collective action? Environment and Planning A. 44(2), 411–427. DOI: https://doi.org/10.1068/a44143

[20] Singh, S., 2016. Smallholder organization through farmer (producer) companies for modern markets: Experiences of Sri Lanka and India. Cooperatives, economic democratization and rural development. Edward Elgar Publishing: Cheltenham. pp. 75–100. DOI: https://doi.org/10.4337/9781784719388.00011

[21] Chauhan, S., 2016. Luvkush crop producer company: A farmer’s organization. Decision. 43, 93–103. DOI: https://doi.org/10.1007/s40622-015-0121-1

[22] Mukherjee, A., Singh, P., Rakshit, S., et al., 2019. Effectiveness of poultry based farmers’ producer organization and its impact on livelihood enhancement of rural women. Indian Journal of Animal Sciences. 89(10), 1152–1160. DOI: https://doi.org/10.56093/ijans.v89i10.95024

[23] Jose, E., Meena, H.R., Meena, B.S., 2019. Genesis of dairy based farmer producer companies in Kerala. Indian Journal of Dairy Science. 72(2), 218–222. DOI: https://doi.org/10.33785/IJDS.2019.v72i02.015

[24] Kumar, P., Manaswi, B.H., Prakash, P., et al., 2019. Impact of farmer producer organization on organic chilli production in Telangana, India. Indian Journal of Traditional Knowledge (IJTK). 19(1), 33–43. DOI: https://doi.org/10.56042/ijtk.v19i1.30839

[25] Kumari, S., Bharti, N., Tripathy, K.K., 2021. Strengthening agriculture value chain through collectives: Comparative case analysis. International Journal of Rural Management. 17(1_suppl), 40S–68S. DOI: https://doi.org/10.1177/0973005221991438

[26] Tagat, V., Tagat, A., 2016. The potential of farmer producer organizations in India. SSRN. DOI: http://dx.doi.org/10.2139/ssrn.2972488

[27] Desai, R.M., Joshi, S., 2014. Can producer associations improve rural livelihoods? Evidence from farmer centres in India. Journal of Development Studies. 50(1), 64–80. DOI: https://doi.org/10.1080/00220388.2013.849339

[28] Kumar, K.N.R., Reddy, M.J.M., Shafiwu, A.B., et al., 2023. Impact of farmer producer organizations on price and poverty alleviation of smallholder dry chillies farmers in India. Research on World Agricultural Economy. 4(3), 46–62. DOI: https://doi.org/10.36956/rwae.v4i3.880

[29] Kumar, M., Singh, R., Kumar, K., 2021. Marketing efficiency of different marketing channel of mustard crop in Swai Madhopur District of Rajasthan. Economic Affairs. 66(1), 143–147. DOI: https://doi.org/10.46852/0424-2513.1.2021.18

[30] Yadav, V. K., Mukharjee, A., Roy, et al., 2022. Analyzing the constraints as perceived by the board of directors in the initial development phase of the farmer producer organizations. Indian Research Journal of Extension Education. 22(3), 170-175. DOI: https://doi.org/10.54986/irjee/2022/jul_sep/170-175

[31] Nayak, A.K., 2016. Farmer producer organizations in India: Policy, performance, and design issues. Organised retailing and agri-business. India studies in business and economics. Springer: New Delhi. pp. 289–303. DOI: https://doi.org/10.1007/978-81-322-2476-1_17

[32] Singh, S., 2008. Producer companies as new generation cooperatives. Economic and Political Weekly. 43(20), 22–24.

[33] Cherukuri, R.R., Reddy, A.A., 2014. Producer organisations in Indian agriculture: Their role in improving services and intermediation. South Asia Research. 34(3), 209–224. DOI: https://doi.org/10.1177/0262728014544931

[34] Vicziany, M., Plahe, J., 2017. Extending traditional food knowledge into new marketing institutions for small farmers in India. South Asia: Journal of South Asian Studies. 40(3), 645–668. DOI: https://doi.org/10.1080/00856401.2017.1342183

[35] Pant, S.C., Kumar, S., Joshi, S.K., 2022. Social capital and performance of farmers’ groups in producer organizations in India: Examining the mediating role of self-efficacy. Journal of Agribusiness in Developing and Emerging Economies. DOI: https://doi.org/10.1108/JADEE-07-2022-0155

[36] Murray, E.V., 2008. Producer company model-current status and future outlook: Opportunities for bank finance. Financing Agriculture. 40(4), 18–26.

[37] Sharma, P., 2013. Leveraging farmer producer organizations to boost production, mitigate risk and strengthen food security: Lessons and challenges. Journal of Land and Rural Studies. 1(1), 41–48. DOI: https://doi.org/10.1177/2321024913487270

[38] Huang, Z., Vyas, V., Liang, Q., 2015. Farmer organizations in China and India. China Agricultural Economic Review. 7(4), 601–615. DOI: https://doi.org/10.1108/CAER-02-2015-0013

[39] Trebbin, A., 2014. Linking small farmers to modern retail through producer organizations—Experiences with producer companies in India. Food Policy. 45, 35–44. DOI: https://doi.org/10.1016/j.foodpol.2013.12.007

[40] Shah, T., 2016. Farmer producer companies: Fermenting new wine for new bottles. Economic & Political Weekly. 51(8), 15–20.

[41] Noor, R., Lily, N.S., Mia, M.R., et al., 2020. The paradigm shift-India’s journey of corporative act to producer company act; How sustainable the farmers’ producer organization model has been so far? Journal of Social and Political Sciences. 3(1), 277–286. DOI: https://doi.org/10.31014/aior.1991.03.01.166

[42] Deka, N., Goswami, K., Thakur, A.S., et al., 2020. Are farmer producer companies ready to behave as business entities? Insights from the vegetable-based farmer companies in West Bengal, India. International Journal of Agricultural Sustainability. 18(6), 521–536. DOI: https://doi.org/10.1080/14735903.2020.1794213

[43] Govil, R., Neti, A., 2022. Strengthening rural economy through farmer producer companies. Smart villages. Springer: Cham. pp. 247–262. DOI: https://doi.org/10.1007/978-3-030-68458-7_18

[44] Nikam, V., Singh, P., Ashok, A., et al., 2019. Farmer producer organisations: Innovative institutions for upliftment of small farmers. The Indian Journal of Agricultural Sciences. 89(9), 15–24. DOI: https://doi.org/10.56093/ijas.v89i9.93451

[45] Farmer Producer Companies: Preliminary Studies on Efficiency and Equity from Maharashtra [Internet]. The Hindu Centre for Politics and Public Policy [cited 2022 Jan 7]. Available from: https://www.thehinducentre.com/publications/policy-report/65808942-Policy-Report-No.-27.pdf

[46] Hennink, M., Kaiser, B.N., 2022. Sample sizes for saturation in qualitative research: A systematic review of empirical tests. Social Science & Medicine. 292, 114523. DOI: https://doi.org/10.1016/j.socscimed.2021.114523

[47] Saunders, B., Sim, J., Kingstone, T., et al., 2018. Saturation in qualitative research: exploring its conceptualization and operationalization. Quality & Quantity. 52, 1893–1907. DOI: https://doi.org/10.1007/s11135-017-0574-8

[48] Bharti, N., 2021. Role of cooperatives in economic empowerment of women: A review of Indian experiences. World Journal of Entrepreneurship, Management and Sustainable Development. 17(4), 617–631.

[49] Tisdell, C., Ahmad, S., Agha, N., et al., 2019. Microfinance for wives: Fresh insights obtained from a study of poor rural women in Pakistan. Journal of Research in Gender Studies. 10(1), 9–37. DOI: https://doi.org/10.22381/JRGS10120201

[50] Tripathi, A., Bharti, N., Sardar, S., et al., 2023. Covid-19, disrupted vegetable supply chain and direct marketing: experiences from India. Journal of Agribusiness in Developing and Emerging Economies. 13(1), 1–15. DOI: https://doi.org/10.1108/JADEE-04-2021-0095

[51] Dixon-Woods, M., Agarwal, S., Jones, D., et al., 2005. Synthesising qualitative and quantitative evidence: A review of possible methods. Journal of Health Services Research & Policy. 10(1), 45–53. DOI: https://doi.org/10.1177/135581960501000110

[52] Gram, L., Daruwalla, N., Osrin, D., 2019. Understanding participation dilemmas in community mobilisation: Can collective action theory help?. Journal of Epidemiology and Community Health. 73(1), 90–96. DOI: https://doi.org/10.1136/jech-2018-211045

[53] Puusa, A., Hokkila, K., Varis, A., 2016. Individuality vs. communality A new dual role of co-operatives? Journal of Co-operative Organization and Management. 4(1), 22–30. DOI: https://doi.org/10.1016/j.jcom.2016.02.002

[54] Gijselinckx, C., Bussels, M., 2014. Farmers’ cooperatives in Europe: Social and historical determinants of cooperative membership in agriculture. Annals of Public and Cooperative Economics. 85(4), 509–530. DOI: https://doi.org/10.1111/apce.12049

[55] Hightower, L.S., Niewolny, K.L., Brennan, M.A., 2013. Immigrant farmer programs and social capital: Evaluating community and economic outcomes through social capital theory. Community Development. 44(5), 582–596. DOI: https://doi.org/10.1080/15575330.2013.838975

[56] Black, J.A., Boal, K.B., 1994. Strategic resources: Traits, configurations and paths to sustainable competitive advantage. Strategic Management Journal. 15(S2), 131–148. DOI: https://doi.org/10.1002/smj.4250151009

[57] Cuevas‐Rodríguez, G., Gomez‐Mejia, L.R., Wiseman, R.M., 2012. Has agency theory run its course?: Making the theory more flexible to inform the management of reward systems. Corporate Governance: An International Review. 20(6), 526–546. DOI: https://doi.org/10.1111/corg.12004

[58] Mohan, S., 2016. Institutional change in value chains: Evidence from tea in Nepal. World Development. 78, 52–65. DOI: https://doi.org/10.1016/j.worlddev.2015.10.004

[59] Singh, G., Budhiraja, P., Vatta, K. 2018. Sustainability of farmer producer organisations under agricultural value networks in India: a case of Punjab and Gujarat. Indian Journal of Agricultural Economics. 73(3), 70-85.

[60] Surendran-Padmaja, S., Ojha, J.K., 2023. Beyond the number games: Understanding the farmer producer companies in India and the way forward. Journal of Asian and African Studies. DOI: https://doi.org/10.1177/00219096231192332

[61] Sarkar, R., Sinha, A., 2014. The business of development: A case study of participation and dependence. Decision. 41, 193–203. DOI: https://doi.org/10.1007/s40622-014-0039-z

[62] Thamban, C., Jayasekhar, S., Chandran, K.P., et al., 2020. Sustainability of farmer producer organisations—The case of producer organisations involved in the production and marketing of “neera” in the coconut sector in Kerala India. Journal of Plantation Crops. 48(2), 150–159. DOI: https://doi.org/10.25081/jpc.2020.v48.i2.6376

[63] Kumar, S., Kumar, R., Meena, P.C., et al., 2023. Determinants of performance and constraints faced by Farmer Producer Organizations (FPOs) in India. Indian Journal of Extension Education. 59(2), 1–5. DOI: https://doi.org/10.48165/IJEE.2023.59201

[64] Trivedi, P.K., Ali, M., Satpal, 2022. Farmer producer organisations in North India: Potentials and challenges. International Journal of Rural Management. 19(3), 379–398. DOI: https://doi.org/10.1177/09730052221107730

[65] Bhuyan, R., Das, B., Khound, S., 2022. Understanding farmer producer company (FPC) ecosystem in Assam: Issues and challenges. Journal of Asian and African Studies. DOI: https://doi.org/10.1177/00219096221120921

[66] Kakati, S., Roy, A., 2022. Financial performance of farmer producer companies of India: A study from 2013–2014 to 2018–2019. International Journal of Rural Management. 18(3), 410–428. DOI: https://doi.org/10.1177/09730052211034700

[67] Kappil, S.R., Sahoo, A.K., Samuel, L.C. (editors), 2022. Relative efficiencies of farmer producer companies in India-Slack-Based model approach. 4th International Conference on Advances in Computing, Communication Control and Networking; 2022 Dec 16–17; Greater Noida, India. New York: IEEE. p. 108–114. DOI: https://doi.org/10.1109/ICAC3N56670.2022.10074574

[68] Chintala, G.R., Mani, G., 2022. Collectivisation of farmers and farm produces through 'Farmers Producers Organisations' (FPOs) is benefitting farmers: Some field level observations. Indian Journal of Agricultural Economics. 77(2), 232–242.

[69] Gireesan, K., 2022. From agricultural co-operatives to farmer producer companies: Analysing the transition of co-operativism in India. Deepening democracy. Routledge India: London. pp. 197–209.

[70] Bijman, J., Muradian, R., Schuurman, J., 2016. Cooperatives, economic democratization and rural development. Edward Elgar Publishing: Cheltenham.

[71] Abhishek, R.S., Kumari, R., 2020. Farmers' Producer Organization (FPO) of Kaushalya foundation: Enabling social inclusion of women through technology. Socio-Tech innovation. Palgrave Macmillan: Cham. pp. 203–221. DOI: https://doi.org/10.1007/978-3-030-39554-4_11

[72] Kushankur, D., 2018. Farmer producer companies in India-determinants of performance and viability. Economic and Political Weekly. 53(35), 44–52.

[73] Srinithi, S., Balasubramaniam, R., Mohanraj, V., et al., 2022. Study of impact of the members of Tamil Nadu Banana Producer Company (TNBPC) in Tiruchirappalli District—A socio-economic analysis. Economic Affairs. 67(2), 131–135.

[74] Lalitha, N., Viswanathan, P.K., Vinayan, S., 2022. Institutional strengthening of farmer producer organizations and empowerment of small farmers in India: Evidence from a case study in Maharashtra. Millennial Asia. DOI: https://doi.org/10.1177/09763996221098216

Online ISSN: 2737-4785, Print ISSN: 2737-4777, Published by Nan Yang Academy of Sciences Pte. Ltd.