Farmer producer organizations as farmer collectives: a case study from India

Abstract

Small and marginal farmers in India have been vulnerable to risks in agricultural production. Several organizational prototypes are emerging to integrate them into the value chain with the objectives of enhancing incomes and reduction in transaction costs. One such alternative is Farmer Producer Organizations (FPOs). We explore the potential of FPOs as collective institutions through a case study of Avirat, one of the first FPOs in Gujarat. Our analysis suggests that FPOs have the potential to provide benefits through effective collective action. The main challenge, however, is to raise sufficient capital that can maximize these benefits. We discuss the implications of our findings to policy.