Farmer Producer Organization

Abstract

Indian agriculture is held in its roots by the farmers, which is production-oriented coupled with fragmented landholdings, increased costs on cultivation and transportation, limited access to markets, low level of technology adoption, less bargaining power, higher transaction costs, migration due to indebtedness, and unemployment, poor infrastructure, and low market efficiency. Hence, the need of the hour is to promote collective action in the procurement and distribution of inputs, aggregation, grading, and marketing of the products through economy of scale and ensure participation of agri-entrepreneurs and smallholder producer farmers. Therefore, by organizing farmers into collectives as a Farmer Producer Organization (FPO), the benefits of economies of scale and collective bargaining could be achieved. The principle of clustering approach is used in the functioning of the FPOs. FPO shifts the focus on the resources and capabilities of the farmers to providing agri-input services and technical services, creating market access, and generating employment. FPOs have contributed to the diversification of high-value crops, benefitted the poorest most, improved access to credit and information services, promoted collective action and public-private partnership, access to the international market, enable better prices and quicker payments for the produce and organization of the supply chain. Despite more benefits, FPOs are facing multiple challenges. Among them, mobilization of share capital is a significant challenge followed by mobilizing the farmers with diversified experiences. The government agencies should support small and marginal farmers by assuring financial assistance. Due to the global scenario, with demanding markets, changing consumer preferences, market competitions, better presentation