Smallholder organisation through farmer (producer) companies for modern markets: experiences of Sri Lanka and India

Abstract

Farmer collectives are viewed as an important element in linking smallholders with modern markets as they provide many benefits for this interface. This chapter examines the experience of a unique set of farmer collectives. Farmer companies (FCs) in Sri Lanka and producer companies (PCs) in India have been in existence for the last 18 and 10 years respectively in law and in practice. The chapter compares and contrasts the rationale, legal provisions, processes of setting up such FCs/PCs and role of promoters, especially the state. It examines the differential performance of these companies within each country and across the two countries and analyses the factors affecting their performance, based on case studies of such companies in Sri Lanka and India. It draws lessons, based on theory and practice, for better organization, promotion, management and performance of such producer agencies for more market-oriented performance for improving livelihoods of small producers.