Performance and Economic Impacts of Farmer Producer Organizations (FPOs) in India: A Review

Published by: Admin

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Authors: Naresh Singla and Priyanka Medhi

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Abstract

Small farmers’ participation in FPOs is considered as one of the several pathways for their livelihood generation to make agricultural development inclusive and sustainable. In this context, an extensive review of the literature was carried out to examine the performance and economic impacts of FPOs in India. It was found that FPOs can provide market access and play a vital role in the livelihood generation of small farmers. However, most of the FPOs performed poorly due to a lack of mobilization of working capital, skilled managerial staff, and effective business plans. FPOs could not scale up their operations due to lack of matching grants from financial institutions. Therefore, FPOs must be made viable by expanding capacity building through financing by institutions and encouraging members to contribute more equity, not just the bare minimum required to continue membership. Creating sound business planning, pursuing innovative ideas (such as initiating custom hiring agricultural equipment), and taking on new responsibilities as market facilitators can help FPOs operate efficiently and sustainably.

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