Skip to main navigation menu Skip to main content Skip to site footer

Review Articles

Vol. 13 No. sp5 (2026): Recent Advances in Agriculture

Unlocking growth for small and marginal farmers: Transformative role of Farmer Producer Organisations in market access and economies of scale

DOI
https://doi.org/10.14719/pst.13438
Submitted
30 December 2025
Published
01-07-2026

Abstract

The Farmer Producer Organisations (FPOs) represent a key institutional innovation aimed at addressing the structural limitations of small and marginal farmers by enhancing collective bargaining power, improving market access and attaining economies of scale. Despite increasing policy support and expanding research, existing literature remains fragmented, particularly in explaining how financial, governance, infrastructural and socio-cultural factors influence FPOs' performance and sustainability. This narrative review synthesises evidence from India and comparable international contexts to give a thematic understanding of the roles, benefits and constraints associated with FPOs. The findings reveal that while FPOs highly contribute to reducing transaction costs and improving access to inputs and markets, their long-term sustainability depends on stronger institutional capacity, improved financial support and effective governance structures. It also identifies important research gaps related to gender inclusion, comparative assessments and longitudinal evaluation of large-scale national programmes. By consolidating dispersed evidence, the study provides a deeper understanding of the transformative potential of FPOs as an inclusive and sustainable instrument of agrarian development.

 

References

  1. 1. Gautam S, Mallaiah LC. Enhancing farmers’ income and farmer producer organisations (FPOs) in India. Saudi J Econ Fin. 2024;8:91–101. https://doi.org/10.36348/sjef.2024.v08i04.001
  2. 2. Nikam V, Veesam H, Kiran Kumara TM, Chand P. Farmer producer organisations in India: challenges and prospects (policy paper 40). New Delhi: ICAR–National Institute of Agricultural Economics and Policy Research; 2023.
  3. 3. Malik S, Kajale D. Empowering small and marginal farmers: unveiling the potential and addressing obstacles of farmer-producer organisations in India. Res World Agric Econ. 2024;5:32–47. https://doi.org/10.36956/rwae.v5i1.994
  4. 4. Taraz V. Adaptation to climate change: historical evidence from the Indian monsoon. Environ Dev Econ. 2017;22:517–45. https://doi.org/10.1017/S1355770X17000195
  5. 5. Jayalath MM, Ratnayake RMC, Perera HN, Thibbotuwawa A. Waste minimisation and performance improvement in vegetable supply chains: a case study from a developing economy. In: Proceedings of the 8th International Conference on Business and Industrial Research (ICBIR); 2023; Bangkok, Thailand. Piscataway (NJ): IEEE; 2023. p. 948–53. https://doi.org/10.1109/ICBIR57571.2023.10147413
  6. 6. Gurung R, Choubey M, Rai R. Economic impact of farmer-producer organisation (FPO) membership: empirical evidence from India. Int J Soc Econ. 2023;51:1015–28. https://doi.org/10.1108/IJSE-06-2023-0451
  7. 7. Gangwar LS, Hasan SS, Prakash B, Sharma AK, Singh K, Pathak AD. Farmer-Producer Organisations and innovative policy options for enhancing farmers’ income in India. Int J Agric Manag. 2022;36:51–63. https://doi.org/10.5958/2456-8716.2022.00004.5
  8. 8. Khan MA, Pratap J, Siddique RA, Gedam PM. Farmer producer organisation (FPO): empowering Indian farming community. Int J Curr Microbiol Appl Sci. 2020;11:2089–99.
  9. 9. National Sample Survey Organisation (NSSO). Situation assessment of agricultural households and land and holdings of households in rural India: NSS 77th round. New Delhi: Ministry of Statistics and Programme Implementation, Government of India; 2019.
  10. 10. Beg S. Digitisation and development: property rights security, and land and labour markets. J Eur Econ Assoc. 2022;20:395–429. https://doi.org/10.1093/jeea/jvab034
  11. 11. Bhanot D, Kathuria V, Das D. Can institutional innovations in agri-marketing channels alleviate distress selling? Evidence from India. World Dev. 2021;137:105202. https://doi.org/10.1016/j.worlddev.2020.105202
  12. 12. Bikkina N, Turaga RMR, Bhamoriya V. Farmer producer organisations as farmer collectives: a case study from India. Dev Policy Rev. 2018;36:669–687. https://doi.org/10.1111/dpr.12274
  13. 13. Harikrishna YV, Hansdah P, Sharma NR. Farmer’s producer organisation (FPO) – collective steps towards lucrative agriculture. Asian J Agric Ext Econ Sociol. 2022;40:60–65. https://doi.org/10.9734/ajaees/2022/v40i230846
  14. 14. Mukherjee A, Singh P, Ray M, Satyapriya S, Burman RR. Enhancing farmers' income through farmers’ producer companies in India: status and roadmap. Indian J Agric Sci. 2018;88:1151–61. https://doi.org/10.56093/ijas.v88i8.82441
  15. 15. Dhamija A, Dhamija S, Khan W. A review on farmer-producer organisation: challenges and opportunities for farmers’ growth. NeuroQuantology. 2022;20:104–109. https://doi.org/10.14704/NQ.2022.20.12.NQ77011
  16. 16. Gorai SK, Wason M, Padaria RN, Rao DUM, Paul RK. Factors contributing to the stability of the farmer-producer organisations: a study in West Bengal. Indian J Ext Educ. 2022;58:91–96. https://doi.org/10.48165/IJEE.2022.58218
  17. 17. Kumari S, Tripathy KK, Bharti N. Strengthening agriculture value chain through collectives: comparative case analysis. Int J Rural Manag. 2021;17:40S–68S. https://doi.org/10.1177/0973005221991438
  18. 18. Mourya M, Mehta M. Farmer producer company: India’s magic bullet to realise select SDGs? Int J Rural Manag. 2021;17:115S–147S. https://doi.org/10.1177/0973005221991660
  19. 19. Prabhakar I, Manjunatha BL, Nithyashree ML, Hajong D. Farmers producer company—an innovative farmers’ institution. Environ Ecol. 2012;30:427–30.
  20. 20. Suresh V, Sreejith SS. Enabling and inhibiting factors of the sustainability of farmers’ producer organisations in India. Discov Sustain. 2024;5:333. https://doi.org/10.1007/s43621-024-00527-5
  21. 21. Rashtrapal BR, Mathur A, Beniwal A. Farmer producer organisations in Maharashtra: prospects and challenges. Asian J Agric Ext Econ Sociol. 2022;40:203–218. https://doi.org/10.9734/ajaees/2022/v40i111702
  22. 22. Rana RK, Kaur R, Singh R, Shirur M, Padaria RN, Monga S, et al. A critical review and SWOT analysis of important extension agencies in India for improving extension management. Agric Rev. 2023;44:441–50. https://doi.org/10.18805/ag.R-2522
  23. 23. Shree DAN, Vaishnavi P. Challenges faced by farmer-producer organisations (FPOs) – a review. J Agric Ext Manag. 2022;23:131–140.
  24. 24. Momin S, Dwivedi S. Farmer producer organisations (FPOs): a scheme for transforming the agricultural sector of India. Asia Pac J Manag. 2024;4:11–16. https://doi.org/10.46977/amt.2024.v04i04.002
  25. 25. Department of Agriculture & Cooperation. Policy and process guidelines for FPOs. New Delhi: Government of India; 2013.
  26. 26. Qiu Y, Zeng X, Zhang L, Wu J, Bai Y. Impact of farmer cooperatives on labour employment: evidence from rural China. Land. 2024;13:2242. https://doi.org/10.3390/land13122242
  27. 27. Ma W, Rahut DB, Marini MA. Farmers’ organisations and sustainable development: an introduction. Ann Public Coop Econ. 2023;94:683–700. https://doi.org/10.1111/apce.12449
  28. 28. Arahant A, Nayak D, Jindal L, Batra G, Dash DN, Kondasani RKR, et al. Farmer producer organisation: an ecosystem for building socio-economic resilience of farmers in India. Curr Agric Res J. 2025;13:261–73. https://doi.org/10.12944/CARJ.13.1.26
  29. 29. Ortiz R, Peris J. The role of farmers’ umbrella organisations in building transformative capacity around grassroots innovations in rural agri-food systems in Guatemala. Sustainability. 2022;14:2695. https://doi.org/10.3390/su14052695
  30. 30. Agarwal S, Goyal SK. Progression of farmer-producer organisations in India. Indian J Agric Sci. 2022;92:1490–1495. https://doi.org/10.56093/ijas.v92i12.118068
  31. 31. Prabhavathi Y, Kishore NTK, Ramachandra CT, Siddayya S. An analytical study on managerial competencies and business performance of farmer producer organisations (FPOs): a value chain perspective from India. Millennial Asia. 2023. https://doi.org/10.1177/09763996231200180
  32. 32. Joshi S, Sharma M, Singh RK. Sustainable agri-food supply chain practices: few empirical evidences from a developing economy. Glob Bus Rev. 2023;24:451–74. https://doi.org/10.1177/0972150920907014
  33. 33. Harrington T, Narain N, Rao N, Rengalakshmi R, Sogani R, Chakraborty S, et al. A needs-based approach to promoting gender equity and inclusivity: insights from participatory research with farmer-producer organisations (FPOs). J Soc Econ Dev. 2024;26:409–434. https://doi.org/10.1007/s40847-023-00280-x
  34. 34. Abdu A, Marquis GS, Colecraft EK, Dodoo ND, Grimard F. The association of women’s participation in farmer-based organisations with female and male empowerment and its implications for nutrition-sensitive agriculture interventions in rural Ghana. Curr Dev Nutr. 2022;6:121. https://doi.org/10.1093/cdn/nzac121
  35. 35. Parthiban SR, Nain MS, Singh R, Kumar S, Chahal VP. Farmers’ producer organisation in reducing transactional costs: a study of Tamil Nadu Mango Growers Federation (TAMAFED). Indian J Agric Sci. 2015;85:1303–1307. https://doi.org/10.56093/ijas.v85i10.52269
  36. 36. Covey J, Macqueen D, Bolin A, Hou Jones X. Co-producing knowledge: a demand-led, prosperity-focused, research agenda with forest and farm producer organisations. Environ Sci Policy. 2021;124:336–347. https://doi.org/10.1016/j.envsci.2021.07.006
  37. 37. Chlebicka A. Producer organisations in agriculture—barriers and incentives of establishment on the Polish case. Procedia Econ Finance. 2015;23:976–81. https://doi.org/10.1016/S2212-5671(15)00406-2
  38. 38. Latynskiy E, Berger T. Networks of rural producer organisations in Uganda: what can be done to make them work better? World Dev. 2016;78:572–86. https://doi.org/10.1016/j.worlddev.2015.10.014
  39. 39. Michalek J, Ciaian P, Pokrivcak J. The impact of producer organisations on farm performance: the case study of large farms from Slovakia. Food Policy. 2018;75:80–92. https://doi.org/10.1016/j.foodpol.2017.12.009
  40. 40. Mwambi M, Bijman J, Mshenga P, Oosting S. Adoption of food safety measures: the role of bargaining and processing producer organisations. NJAS Wagening J Life Sci. 2020;92:100337. https://doi.org/10.1016/j.njas.2020.100337
  41. 41. Amitha CD, Savitha B, Rani VS, Laxminarayana P. Factors contributing to the performance of farmer producer organisations (FPOs): a study in Medak district of Telangana state. Int J Bio-Resour Stress Manag. 2021;12:192–98. https://doi.org/10.23910/1.2021.2226
  42. 42. Fałkowski J, Chlebicka A. What product mix do they offer and what marketing channels do they use? Exploring agricultural producer organisations’ heterogeneity. J Rural Stud. 2021;85:1–12. https://doi.org/10.1016/j.jrurstud.2021.05.002
  43. 43. Addai KN, Ng’ombe JN, Temoso O. Can farmer organisation membership improve household food security and nutrition? Evidence from Northern Ghana. World Food Policy. 2024;10:180–202. https://doi.org/10.1002/wfp2.12076
  44. 44. Das S, Singh R. Benefits of new generation farmers’ collectives: case reflection from an eastern state of India. Dev Pract. 2024;34:736–56. https://doi.org/10.1080/09614524.2024.2345733
  45. 45. Nikam V, Singh P, Ashok A, Kumar S. Farmer producer organisations: innovative institutions for upliftment of small farmers. Indian J Agric Sci. 2019;89:1383–92. https://doi.org/10.56093/ijas.v89i9.93451
  46. 46. Neupane H, Paudel KP, He Q. Impact of cooperative membership on market performance of Nepali goat farmers. Ann Public Coop Econ. 2023;94:805–830. https://doi.org/10.1111/apce.12445
  47. 47. Sorrentino A, Cacchiarelli L, Russo C. Market power and bargaining power in the EU food supply chain: the role of producer organisations. New Medit. 2018;17:21–31. https://doi.org/10.30682/nm1804b
  48. 48. Sharma P. Leveraging farmer producer organisations to boost production, mitigate risk and strengthen food security: lessons and challenges. J Land Rural Stud. 2013;1:41–48. https://doi.org/10.1177/2321024913487270
  49. 49. Kumar P, Manaswi BH, Prakash P, Anbukkani P, Kar A, Jha G, et al. Impact of farmer-producer organisation on organic chilli (Capsicum frutescens) production in Telangana, India. Indian J Agric Sci. 2019;89:1850–54. https://doi.org/10.56093/ijas.v89i11.95313
  50. 50. Chowdary CHM, Shanthasheela M, Rajasekharan R, Vasanthi R. Assessing the performance of farmer-producer organisations: a study in Prakasam district of Andhra Pradesh, India. Asian J Agric Ext Econ Sociol. 2022;40:351–57. https://doi.org/10.9734/ajaees/2022/v40i1031081
  51. 51. Bizikova L, Nkonya E, Minah M, Hanisch M, Turaga RMR, Speranza CI, et al. A scoping review of the contributions of farmers’ organisations to smallholder agriculture. Nat Food. 2020;1:620–630. https://doi.org/10.1038/s43016-020-00164-x
  52. 52. Basavaraj GL. Do institutional interventions benefit farmers? Evidence from marketing maize through a farmer-producer organisation in Davangere district of Karnataka. Econ Aff. 2022;67:361–69. https://doi.org/10.46852/0424-2513.3.2022.29
  53. 53. Santhosha SG, Anuradha CK, Arunkumar M. A conceptual study on the role of farmer-producer organisation in measurement, evaluation and enhancement of sustainable agricultural effectiveness. Int J Health Sci. 2022;6:2990–95. https://doi.org/10.53730/ijhs.v6ns6.9973
  54. 54. Pujitha AS, Naik A, Kumar A, Biswas T. Comparative analysis of the impact of FPO on paddy farmers through canonical correlation analysis. Indian J Ext Educ. 2024;60:49–53. https://doi.org/10.48165/ijee.2024.60310
  55. 55. Gersch I. Producer organisations and contract farming: a comparative study of smallholders’ market strategies in South India. Z Wirtschgeogr. 2018;62:14–29. https://doi.org/10.1515/ZFW-2017-0026
  56. 56. Singh G, Budhiraja P, Vatta K. Sustainability of farmer-producer organisations under agricultural value networks in India: a case of Punjab and Gujarat. Indian J Agric Econ. 2018;73:370–85.
  57. 57. Chopra S, Sekhon MK, Kaur A. What drives farmer-producer organisations (FPOs) towards success or failure in Punjab: evidence and implications. Indian J Econ Dev. 2024;20:2403329–2403335. https://doi.org/10.35716/IJED-24083
  58. 58. Lalitha N, Viswanathan PK, Vinayan S. Institutional strengthening of farmer-producer organisations and empowerment of small farmers in India: evidence from a case study in Maharashtra. Millennial Asia. 2024;15:278–99. https://doi.org/10.1177/09763996221098216
  59. 59. Trivedi PK, Ali M, Satpal. Farmer producer organisations in North India: potentials and challenges. Int J Rural Manag. 2023;19:379–98. https://doi.org/10.1177/09730052221107730
  60. 60. Verma AK, Singh VK, Asha K, Dubey SK, Verma AP. Constraints perceived by the members and non-members towards the functioning of FPO-AKPCL in Kannauj district of Uttar Pradesh. Econ Aff. 2021;66:335–41. https://doi.org/10.46852/0424-2513.2.2021.20
  61. 61. Tiwari N, Upadhyay R. Constraints faced by the functionaries of farmer-producer organisations. Indian J Ext Educ. 2022;58:127–31. https://doi.org/10.5958/2454-552X.2022.00016.0
  62. 62. Verma S, Sonkar VK, Kumar A, Roy D. Are farmer-producer organisations a boon to farmers? Evidence from Bihar, India. Agric Econ Res Rev. 2019;32:123–37. https://doi.org/10.5958/0974-0279.2019.00022.3
  63. 63. Pallavi GL, Saxena A, Pastakia A, Oza S. Farmer producer organisations (FPOs) as sustainable transition intermediaries: insights from India. Int J Rural Manag. 2024;20:1–18. https://doi.org/10.1177/09730052241292979
  64. 64. Verma AK, Singh AK, Dubey SK, Singh OP, Doharey RK, Bajpai V. Constraints faced by board of members of farmer-producer organisations. Indian J Ext Educ. 2020;56:75–78. https://doi.org/10.5958/2454-552X.2020.00012.2
  65. 65. Zheng S, Awokuse TO, Wang Z. Determinants of producers’ participation in agricultural cooperatives: evidence from Northern China. Appl Econ Perspect Policy. 2012;34:167–86. https://doi.org/10.1093/aepp/ppr044
  66. 66. Cabral S, Mahoney JT, McGahan AM, Potoski M. Value creation and value appropriation in public and nonprofit organisations. Strateg Manag J. 2019;40:465–75. https://doi.org/10.1002/smj.3008
  67. 67. Zhu X, Wang G. Impact of agricultural cooperatives on farmers’ collective action: a study based on the socio-ecological system framework. Agriculture. 2024;14:96. https://doi.org/10.3390/agriculture14010096

Downloads

Download data is not yet available.