Improving farmers’ access to FPOs services: Evidence from eastern Uttar Pradesh

Introduction

The delivery mechanism of available technology in agriculture and allied sectors, along with the effective marketing strategy of the product, is still a researchable issue that compels the establishment of a full-proof technology delivery system. There are multiple extension agencies working to improve the delivery of agricultural technology. However, progressive farmers' bias has been observed in the majority. Most farmers in the country are small and marginal farmers. These farmers form the largest group of cultivators in Indian agriculture, with 85% of operated holdings being smaller than or around two hectares, and among these, 66% are less than one hectare (Singh, 2012) [10] . Over 90% of small and marginal farmers (SMF) rely on rain for their crops. In numbers, about 90-100 million small and marginal farmers in India depend on agriculture for their income and employment. Because of their fragmentation and disorganization, it is not economically feasible for farmers to adopt the latest technology, use high-yield seeds, or invest in inputs such as seeds, fertilizers, and agrochemicals. They also struggle to get good value from their marketable surplus by selling individually. Additionally, they cannot invest in innovations that could boost productivity and add value, limiting their ability to increase production and market their goods more efficiently. According to Pingali et al. (2005) [8] , high-value crops are difficult for marginal and small farmers to adopt because they are often perishable and incur high transaction costs. Various methods of collective action, such as forming producer organizations, can help reduce transaction costs and promote the development and coordination of commodity markets (Jaffee 1995; Staatz 1987) [5,11] . To resolve the challenges faced by small and marginal farmers, the Indian government has promoted a new type of collective action known as Farmer-Producer Organizations (FPOs), particularly to improve access to investments, technical advances, and efficient inputs and markets (Hellin et al., 2009; Department of Agriculture & Cooperation, 2013) [4,1] . It is a type of PO in which the members are farmers. FPOs are a means to unite small and marginal farmers and other small producers to develop their own business enterprises managed by professionals. The Small Farmers Agribusiness Consortium (SFAC) supports the promotion of FPOs. Farmer Producer Organizations (FPOs), also known as Farmers Producer Companies (FPCs), are organizations of producers who grow agricultural products. FPOs are built on www.extensionjournal.com the principles of self-help, self-responsibility, democracy, equality, equity, and solidarity. Members of FPOs must uphold ethical values such as honesty, openness, social responsibility, and caring for others. Ownership of the PO belongs to its members. It is an organization of producers, by producers, and for producers. One or more institutions and/or individuals may have promoted the PO by assisting with mobilization, registration, business planning, and operations. Nonetheless, ownership and control always remain with the members, and management is conducted through their representatives. FPOs will support members in increasing their income by undertaking any or all of the activities listed above. By aggregating demand for inputs, the FPO can buy in bulk, resulting in lower prices compared to individual purchases. Additionally, transporting in bulk reduces transportation costs, thus lowering overall production costs. Similarly, the FPO may aggregate members' produce and market it in bulk to fetch a better price per unit. The FPO can also provide market information to producers, enabling them to hold onto their produce until market conditions become favorable or to sell at a more profitable price. All these activities will lead to increased income for primary producers. Besides higher income, members also benefit from other advantages. An FPO is a collective of farmers (and non-farmers) who are primary producers of a product (an agricultural produce). It can serve as a platform to facilitate better access to government services like the Public Distribution System (PDS), Mahatma Gandhi Rural Employment Guarantee Act (MNREGA), scholarships, pensions, and more. It can also liaise with government departments to ensure the convergence of programs related to drinking water, sanitation, health, and hygiene.

Research Methodology

The study employed an exploratory research design to systematically examine the institutional and socio-economic barriers affecting the adoption of services provided by Farmer Producer Organizations (FPOs) in Gorakhpur and Basti districts of Eastern Uttar Pradesh. These districts were specifically selected due to their high density of established FPOs and active agricultural participation. A multistage sampling method was used, beginning with the selection of four blocks, from which two FPOs per district were randomly chosen to create the sampling frame. Then, a proportionate random sampling technique was applied to select a total of 400 respondents, with 100 respondents per block and 50 per FPO. Primary data were collected through face-to-face interviews using a structured, pre-tested interview schedule designed to capture detailed challenges faced by members, with the tool refined through thorough pre-testing to ensure clarity and reliability. The study's findings highlight several key constraints faced by farmers that greatly affect their agricultural productivity and income stability. The most important constraint identified by respondents was the lack of scientific storage facilities, which ranked first with the highest mean score (0.96). This indicates that post-harvest losses continue to be a major problem, forcing farmers to sell their harvest immediately after collection, often at unfavorable prices. The significance of this constraint emphasizes the urgent need for infrastructure development, especially cold storage and scientific warehousing facilities at the local level.

Results and Discussion

Frequent price fluctuations rank as the second most serious constraint (mean score 0.95). Price volatility exposes farmers to high market risks and income uncertainty, discouraging them from investing in better technologies and quality inputs. This issue is closely linked to the thirdranked constraint, the high cost of inputs and services (mean score 0.93), which further raises cultivation costs and reduces profit margins. Collectively, these constraints underscore farmers' vulnerability to market failures and increasing production expenses.

The lack of knowledge about government subsidies (mean score 0.90) ranked fourth, pointing to gaps in awareness and the dissemination of information about existing support programs. This reveals inefficiencies in extension services and highlights the need for improved communication strategies. Insufficient credit facilities (mean score 0.88) and a lack of transportation options (mean score 0.87), ranked fifth and sixth respectively, emphasize institutional and logistical challenges that restrict timely access to inputs and markets.

Lower-ranked constraints, such as high commission charges, a lack of market information and news, power outages, and adverse weather conditions, still pose significant challenges, though they are seen as less severe.

The ongoing presence of these issues indicates that farmers operate in a complex production and marketing environment where multiple constraints act together. In response to these constraints, farmers recommended several remedial actions. The top suggestion was to provide flexible sources of credit, which received the highest ranking, with a mean score of 0.

Conclusion

The study provides valuable insights into the challenges faced by farmers in adopting the benefits and services of Farmer-Producer Organizations (FPOs) and suggests practical measures to overcome these obstacles.

References

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