The Role of Farmer Producer Organizations (FPOs) in Revamping Indian Agriculture Landscape

Abstract

Enhancing farmers' income and understanding the necessity for institutional measures to revamp the agricultural sector are the top priorities of the Indian government. The 2001 recommendations of Y. K. Alagh Committee led to revisions in the Companies Act of 1956, which allowed for the official establishment of Farmer Producer Organizations (FPOs). FPOs have emerged as a vital tool to promote agricultural commercialization, foster economic growth, improve farmers' socio-economic status, and enable small and marginal farmers to access organized value chains, strengthen their bargaining power, and mitigate market risks. Despite agriculture's importance, declining landholdings and production uncertainties pose challenges, which FPOs help address by facilitating collective resource procurement and improving market access. Since 2020, FPOs have grown significantly, particularly in states like Maharashtra and Bihar, with women-led organizations demonstrating notable success. Evidence indicates that FPO membership enhances farmers' income and financial efficiency. However, challenges like limited technology access and governance issues persist during FPO development. Consequently, FPOs may play an important role for achieving Sustainable Development Goals related to poverty reduction and gender equality, necessitating enhanced institutional support and a conducive policy framework for sustained impact in Indian agriculture.