Beyond the Number Games: Understanding the Farmer Producer Companies in India and the Way Forward

Abstract

The paper analyses the trends, patterns and performance of Farmer Producer Companies (FPCs) in India. The paper aims at understanding what determines the success of FPCs and also explore whether the current policy focus on a targeted development of 10,000 Farmer Producer Organizations (FPOs) a good idea. The study tries to identify the critical common factors of successful FPC ventures. The study also analyses the issues, challenges and bottlenecks faced by selected FPCs and attempts to understand the best practices, the interventions and alternatives of the selected FPCs. The paper would help in understanding the existing and expected institutional arrangements for and around FPCs in order to make the business ventures robust. We used data provided by National Bank for Agriculture and Rural Development (NABARD) and Small Farmers’ Agri-Business Consortium (SFAC) to explore the trends and patterns. A cross-case analysis was done to assess the performance and to draw inferences on critical common factors for success. The study shows that FPCs are emerging among other legal forms of FPOs. They are prominent in few states, which have enabling environment, enterprising farmers and have a history of collective action. The study shows heterogeneity in the product, functioning, how they work, deal with the issues and mechanisms of FPCs. The paper proposes establishing ‘incubators’ to handhold and support FPCs and different modes and categories for financing them. The macro- and micro-level understanding of FPCs drawn on the country-level data and the specific cases would add to the existing knowledge around FPCs in India. The contextual analysis of FPCs is of interest to global researchers and agri-development professionals, to identify the sectoral challenges, bottlenecks and the issues, which FPCs experience as business ventures. The paper creates possibilities for policy makers to design effective policy responses and strategies to strengthen FPCs in India and also benefit the global south by suggesting the learning from the model.