Farmer Producer Organisations and Institutional Economics

Abstract

This paper develops a theoretically grounded and empirically validated framework to analyse Farmer Producer Organisations (FPOs) through the lens of institutional economics. Drawing on classical, new, and heterodox traditions—including Veblen, Polanyi, Ostrom, and Sen—it proposes a seven-cluster schema spanning transaction costs, collective governance, inclusion, ecological resilience, externalities, livelihood security, and state intermediation. FPOs are conceptualised as hybrid, socio-economic institutions embedded in evolving agrarian systems, not mere market aggregators. The framework is operationalised through mixed-methods fieldwork across 12 FPOs in Kerala, alongside national-level stakeholder validation. Using composite Enabler and Barrier Indices, the study diagnoses institutional strengths and weaknesses across clusters. Results highlight robust performance in governance and coordination, but gaps in inclusion and environmental sustainability, underscoring systemic interdependencies. The framework bridges normative institutional theory with diagnostic utility, offering actionable insights for scholars, policymakers, and practitioners. It advances context-sensitive institutional design as a critical lever for strengthening FPO ecosystems and enabling inclusive rural transformation across India and the Global South.