Farmers' Producer Companies in India: A New Concept for Collective Action?

Abstract

Producer companies can help smallholder farmers participate in emerging high-value markets, such as the export market and the unfolding modern retail sector in India. As elsewhere in the developing world, in India, small farmers' livelihoods are being threatened due to the liberalization and privatization of Indian agriculture and the increasing interest of private capital in the agribusiness sector. The withdrawal of the state from productive and economic functions, and changes in the organization of marketing channels, present new challenges for small-scale farmers. In this environment of greater instability and competition, organization and collective action can help to enhance farmers' competitiveness and increase their advantage in emerging market opportunities. We build on the ideas of value-chain governance and collective-action literature and introduce the functions and organizational structure of producer companies in India within this context. On the basis of a case study of a specific producer company in Maharashtra, which produces and markets mango and cashew nuts, we discuss the potential benefits for rural communities and the reempowering effect of this form of farmer organization.