Institutional Strengthening of Farmer Producer Organizations and Empowerment of Small Farmers in India: Evidence from a Case Study in Maharashtra

Abstract

Small and marginal farmers contribute significantly to agricultural production and livelihoods all over the world. The small size of operational holdings, however, makes them highly susceptible to market risks leading to low levels of farm income. The farmer producer organizations (FPOs) are considered as effective mechanisms as they give voice to the small farmers, help overcome the challenges, by reducing the transaction costs and improving market access. However, in India, farmer collectives suffer from several institutional and structural impediments that affects their performance and thereby not resulting in empowerment and wellbeing of the farmers. In this regard, this article discusses the role of FPOs based on an empirical case study of Sahyadri Farmers Producer Company Ltd (SFPCL) from Maharashtra. The case study analyses the specificities of a private initiative such as Sahyadri, which focuses on making farming viable for farmers with small holdings in particular. The Sahyadri model contributes building the social capital of the farmers and improving the farm income and sustainable livelihoods. The article uses logistic regression to determine the factors influencing collective action and the Cobb–Douglas (CD) Production function to highlight the economic benefits realized by the farmers from being members of the Farmers Producer Company in case of Sahyadri in Maharashtra.