Challenges and opportunities of farmers producer organizations (FPOs) in Chhattisgarh plain: A case study

Introduction

Agriculture is rightly regarded as the backbone of the Indian economy as it contributes to 13.7 percent to the country's of Gross Domestic Product (GDP) and provides employment to 58 percent of population. The Green Revolution, has led to a significant four-fold increase in food grain production during the last five decades. The production trend has projected to a laudable state of self-sufficiency from a meager 51 million tonnes in 1950-51 to record production of 284.8million tonnes of food grains by the end of 2018. This provides strong evidence for the fact that the Indian farmers are good producers. Farmer Producer Organizations (FPOs) are formal rural institutions formed to empower small and marginal farmers by enhancing their agricultural incomes through collective action. These organizations facilitate improved production practices, efficient marketing, and local processing of agricultural produce. Acting as cooperatives, societies, unions, or companies, FPOs provide a platform for farmers to access essential services such as credit, technology, inputs, and market linkages while enabling their active participation in decision-making and policy advocacy. FPOs are a business-oriented approach to mobilizing small-scale producers, allowing them to access high-value markets and modern agricultural technologies. Registered primarily under the Companies Act, they benefit from legal and institutional support, enabling them to address the challenges of fragmented farming systems. Supported by the government, NGOs, and private organizations, FPOs play a key role in aggregating farmer interests, reducing transaction costs, and leveraging collective bargaining power for financial and non-financial inputs. The Government of India has prioritized the promotion of FPOs as part of its agricultural development strategy, aiming to establish 10,000 additional FPOs within five years. Agencies like NABARD, SFAC, and NCDC, along with CSR initiatives and agriculture departments, are actively involved in this effort. These organizations serve as a crucial mechanism for fostering technology penetration, improving productivity, and ensuring better access to markets, thus strengthening agriculture-based livelihoods. By organizing farmers into Farmer Interest Groups (FIGs) and federating them at the FPO level, these organizations facilitate capacity building, ensure access to quality inputs, and promote cluster-based competitiveness. They enable small farmers to achieve economies of scale, enhance forward and backward linkages, and transition agriculture into a profitable enterprise. FPOs are instrumental in transforming the agricultural sector into a sustainable and inclusive business ecosystem, ensuring higher incomes and better livelihoods for small and marginal farmers. www.extensionjournal.com

Methodology

There are three agroclimatic zones in Chhattisgarh: Bastar Plateau, Northern Hill Areas, and Chhattisgarh Plains. The state has 130 FPOs that are supported by the Directorate of Horticulture and Farm Forestry, SFAC, NABARD, and NGOs. The highest number of operational FPOs in Chhattisgarh Plains was reported as 37, followed by 13 in Northern Hills and 7 in the Bastar Plateau. But out of 37 FPOs in Chhattisgarh Plains, only 24 were functional. The area with the highest concentration of FPOs in Rajnand gaon district, 13 FPOs, was chosen for sampling. From that district, 10% of functional FPOs were chosen; from there, 3 FPOs were selected with a total of 10 members randomly taken from each, making it a total of 30 respondents. Besides this, 10 non-member farmers from the same villages were taken randomly, making the total sample size 60.

Garrett's ranking technique

Where, Rij = Rank given for the i th variable by j th respondents. Nj = Number of variable ranked by j th respondents.

Personal Constraints

Table 4 indicates that difficulty in reaching consensus among members was the primary challenge (mean score 56.93), followed by increased workload due to group activities (54.27). The dual responsibility of women in household and farm operations contributed to these constraints. Lack of leadership skills, financial pressure, resistance to resource sharing, and overdependence on a few active members ranked third to sixth, respectively.

Infrastructural Constraints

Table 5 highlights limited access to shared processing units (58.17) as the biggest infrastructural challenge, followed by lack of cold storage (57.8) and insufficient transportation (57.33). Poor connectivity to markets (56.37) and inadequate office facilities (54.77) further hindered efficiency, while the absence of IT infrastructure for recordkeeping was the least severe constraint (52.93). The study concludes that, Farmer Producer Organization (FPO) members face a diverse range of constraints that hinder their effective functioning and growth. Personal challenges, such as difficulties in reaching consensus and increased workload due to group activities, limit cohesive decision-making. Infrastructural issues, including inadequate processing units, cold storage, and transportation facilities, pose significant barriers to efficient operations. Operational constraints, such as internal conflicts, coordination challenges, and insufficient technical guidance, disrupt group farming initiatives and delay progress. Economic challenges, including high operational costs, limited access to large-scale loans, and delayed financial returns, strain the financial viability of FPOs. Additionally, market constraints like poor collective branding, weak market linkages, and high transportation costs reduce the competitiveness of FPOs in broader markets. Addressing these constraints through targeted interventions and support systems is essential for enabling FPOs to fulfill their potential as drivers of agricultural transformation and sustainable rural development.

Operational Constraints

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