International Journal of Agriculture Extension and Social Development

author(s)
Sushmita Rangar and Ashutosh Singh

abstract
Indian agriculture is dominated by small and marginal holders, over 86% of holdings operate less than two hectares, who face high transaction costs, price volatility and weak bargaining power in increasingly liberalised markets. Earlier collectivisation attempts through cooperatives, self-help groups and joint liability groups partially eased credit and input constraints but suffered from political interference, elite capture and limited market orientation. Farmer Producer Organisations (FPOs), especially Producer Companies enabled by the Companies Act amendment based on the Alagh Committee’s recommendations, have emerged as a hybrid institutional form combining cooperative principles with corporate governance to integrate smallholders into modern value chains. This review traces the historical evolution of FPOs in India, analyses key policies and institutional reforms, synthesises evidence on their economic, social and institutional performance, and identifies future policy directions. Recent reviews estimate that more than 7,000-10,000 FPOs cover around 4.3 million farmers, with income gains where organisations function effectively; however, about 70% face sustainability challenges. Central initiatives such as SFAC and NABARD promotion efforts, equity grants, credit guarantees, and the Central Sector Scheme for the Formation and Promotion of 10,000 FPOs have intensified support, but implementation gaps, fragmented databases, and uneven state-level ecosystems persist. The paper argues for an ecosystem-based strategy centred on institutional strengthening, innovative finance, digital and market integration, and inclusive, gender- and youth-sensitive design to align FPOs with national goals like Doubling Farmers’ Income, Atmanirbhar Bharat and the SDGs.