Journal of Social and Political


ISSN 2615-3718 (Online)

ISSN 2621-5675 (Print)

Published: 30 March 2020

The Paradigm Shift - India's Journey of Corporative Act to Producer Company Act; How Sustainable the Farmers' Producer Organization Model Has Been So Far?

Rehana Noor, Kalyanasundaram M., Nazma Sultana Lily, Mohammad Rubel Mia, Shanthi Venkatesh K., Anisur Rahman

NOREC (Norway), DHAN Foundation (India), WAVE Foundation (Bangladesh)

pdf download

Download Full-Text Pdf


Pages: 277-286

Keywords: Indian Experience, Implicative Strategies, Producer Companies, Smallholder Farmers


Over the years, in India, plethora of approaches has been taken to organize farmers, especially smallholder farmers, in order to enhance their farm profitability. The concept of ‘Cooperative’ was one of the options available for the producers to get organized themselves as an active player in the supply-chain by value addition and business ownership. However, the cooperative system in the country had several shortcomings. Hence, a new legal entity, “Producer Companies” was introduced by the amendment of Companies Act 1956 during 2002. This Farmer Producer Organization (FPO) model under the new company act 2002 is a hybrid between a private limited company and a corporative society. Most of the producer companies are start-ups and promoted by NGOs. The robust governance and management of this model in India and promotion of this concept may bring prosperity among smallholder farmers. However, the best practices followed by the successful producer companies across the country in awareness creation, capacity building, promotional efforts and operational management etc. are not well documented and disseminated. This paper examines the experience of five unique set of FPOs running legally and successfully for three years from Tamil Nadu of India. The selected FPOs were NABARD and SFAC promoted. Based on the findings on the challenges faced in formulation of FPOs; the intervention for further up scaling was identified to make this a sustainable model in future.


  1. Venkatesan P. and B.S. Sonatakki (2017): A Powerful New Dawn- Farmer Producer Organization Advances in Economics and Business Management (AEBM).
  2. Venkattakumar R. and B.S. Sonatakki (2012): Producer Companies in India-Experiences and Implications, Indian Research Journal of Extension Education Special Issue (Volume I), January 2012.
  3. Shubhangi Salokhe (2016): Farmers producer Organization for effective linkage of small producers with market, International Journal of Applied research 2016; 2(10): 142-146.
  4. Preeti Sawairam (2015): Case study of farmer producer organization in Maharashtra in the era of globalization, IBMRD’s Journal of Management and Research. Volume 4, Issue 2, September 2015, Print ISSN : 2277-7830, Online ISSN: 2348- 5922.
  5. Venkatesh Tagat and Anirudh Tagat (2016): The potential of Farmer Producer Organizations in India, SSRN electronic Journal, DOI.10.2139/ssrn.2972488.
  6. Anika Trebbin and Markus Hassler (2012): Farmers’ Producer Companies in India: A new concept for collective action, Environment and Planning A 2012, volume 44, pages 411-427, doi:10.1068/a44143.
  7. ITIGI Probhakar, B.L. manjunatha, M.L. Nithyashree and Dipika Hajong (2012): Farmers Producer Company- An Innovative Farmers’ Institution, ENviornment and Ecology 30 (2): 427-430, April-June 2012.
  8. Tushaar Shah (2016): Farmer Producer companies-Fermenting New wine for new bottles, Economic and political weekly (EPW), VOL LI NO 8.
  9. Singh & Sukhpal (2008): “Producer Companies as New Generation Cooperatives,” Economic & Political Weekly, 17 May.
  10. Singh, Sukhpal and Tarunvir Singh (2013): Producer Companies in India: A Study of Organization and Performance, publication No 246, Centre for Management in Agriculture, Indian Institute Management, Ahmedabad,
  11. Singh, Sriram (2015): “Promotion of Milk Producer Companies: Experience of NDS,” Presentation in Workshop on Producer Companies organised by National Dairy Development Board, Anand, Gujarat, 8 October.
  12. Alagh K Yoginder. 2007. On Producer Companies. PRADHAN’S Workshop on Producer Companies.
  13. DSC. 2007. Development Support Centres’s Experience. Dhari Krushak Vikas Producer Company Ltd. PRADHAN’S Workshop on Producer Companies.
  14. Murray E.V. 2009. Producer Company Model- Current Status and Future Outlook: Oppurtunities for Bank Finance. Knowledge Bank. College Agricultural Banking. Pune, Maharashtra, India. Pp 13.
  15. NRAA (2009): “Perspectives and Problems of Primary Producer Companies-Case Study of Indian Organic Farmers Producer Company Ltd, Kochi, Kerala”; National Rainfed Area Authority (NRAA), New Delhi, India. Pp 18.
  16. Gupta Arvind. 2007. A Critical Appraisal of the Provisions of Producer Company. PRADHAN’S Workshop on Producer Companies.
  17. Kumar Anish. 2007. Promoting Poor Centric Producer Organizations: Learning, Oppurtunities and Challenges. PRADHAN’S Workshop on Producer Companies.
  18. Mahajan V. (2015): “Farmer Producer Companies: Need for Capital and Capacity to Capture Value
  19. Added,” Hyderabad: BASIX Social Enterprise Group.
  20. AOFC India, 2009, ``Association of Farmer Companies India'',
  21. Bie¨nabe E, Sautier D, 2005, ``The role of small scale producer's organizations in addressing market access'', in Beyond Agriculture: Making Markets Work for the Poor Eds F R Almond, S D Hainsworth,, pp 69 – 89
  22. Barham J, Chitemi C, 2009, ``Collective action initiatives to improve marketing performance: lessons from farmer groups in Tanzania'' Food Policy 34 53 - 59
  23. Wilson G, 2009, ``The spatiality of multifunctional agriculture: a human geography perspective'' Geoforum 40 269 - 280
  24. Bardhan & Pranab (2005), Scarcity, Conflicts and Cooperation: Essays in the Political and Institutional Economics of Development, Cambridge, Mass.: MIT Press
  25. Davis, Junior (1990). Agricultural development and food policy in Zambia within the context of state policy and economic stagnation: a review with regard to government agricultural marketing and incentive structures. Thesis (M.Sc.Econ.) - University of Wales (Swansea), 1990.
  26. (FAO) Food and Agriculture Organization of the United Nations, 2001) Improving performance and governance in Kenyan agricultural cooperatives through mobilising member equity capital – advantages of a deferred member payment scheme.
  27. Hardesty, S.D. and Vikas D. Salgia (2004) “Comparative Financial Performance of agricultural Cooperatives and Investor-Owned Firms." working paper. University of California, Center for Cooperatives 2004 18 p. Electronic location
  28. Mercoiret, M., and Mfou’ou (2006) Rural producer organizations, empowerment of farmers and results of collective action – introductory note. World Development Report (2008) Rural producer organizations for pro-poor sustainable agricultural development, Paris Workshop 30-31st October 2006.

About Us

The Asian Institute of Research is an online and open-access platform to publish recent research and articles of scholars worldwide. Founded in 2018 and based in Indonesia, the Institute serves as a platform for academics, educators, scholars, and students from Asia and around the world, to connect with one another. The Institute disseminates research that is proven or predicted to be of significant influence for the general public.

Contact Us

Please send all inquiries to the email:

Business Address:

5th Floor, Kavling 507, Fajar Graha Pena Tower, Jl. Urip Sumohardjo No.20, Makassar, Indonesia 90234

Copyright © 2018 The Asian Institute of Research. All rights reserved

Stay Connected

  • Instagram - Black Circle
  • Facebook - Black Circle
  • LinkedIn - Black Circle