A recent paper by the Indian Council of Agricultural Research’s (ICAR) National Institute of Agricultural Economics and Policy Research (NIAP) has revealed that just one-third of India’s nearly 33,000 registered Farmer-Producer Organisations (FPOs) are currently financially viable.
The policy brief, “Enhancing Financial Viability of FPOs”, authored by ICAR-NIAP director P. S. Birthal, senior scientist Vinayak Nikam, scientist Kiran Kumara, and Samarth Godara of ICAR-IASRI, highlights major challenges in the FPO ecosystem.
Key findings:
Average equity capital support for FPOs stands at only 45% of optimal levels.
Credit access remains at just 37% of the required levels.
Expanding membership beyond 1,000 farmers can significantly improve financial stability and eligibility for government grants.
The paper recommends strengthening access to institutional credit, increasing awareness of financing schemes, and broadening membership to enhance sustainability.
As the Centre works on reinvigorating the FPO framework, the study underscores the urgent need for reforms to ensure farmer collectives can thrive.