Farmer producer organisation as catalysts for change in agriculture: Improving farmer livelihoods in Tamil Nadu

Abstract

Farmer Producer Organizations (FPOs) are crucial for empowering smallholder farmers and contributing significantly to rural development. This study examines the role of Farmer Producer Organizations (FPOs) in enhancing the economic and social welfare of smallholder farmers in Tamil Nadu, specifically in the districts of Thanjavur, Trichy, Pudukottai, Madurai and Sivagangai. Using a sample of 600 farmers (400 FPO members and 200 non-members), the research highlights the transformative potential of FPOs in improving farmers' income and reducing disparities between members and non-members. Key factors such as farm size, participation in FPO training, and access to inputs through FPOs significantly boost income. For instance, FPO training led to a 19-unit increase in income for every unit of participation and the provision of inputs resulted in a 14-unit income increase. Conversely, challenges like high dependency ratios and reliance on hired labor were found to negatively affect income levels. The findings suggest that targeted policy measures, including the expansion of FPO access, strengthening training programs and addressing household dependency issues, are crucial to enhancing the economic benefits for smallholder farmers. FPO membership leads to a 15 per cent increase in income, this can be attributed to the benefits of reduced costs and increased efficiency. By joining an FPO, farmers typically gain access to bulk purchasing of inputs (e.g., seeds, fertilizers, machinery), shared resources and collective bargaining power, all of which contribute to cost reduction. Additionally, enhancing infrastructure, financial services and market access for FPOs could further empower farmers and contribute to rural development.