Farmer producer organisations (FPOs) are collectives of farmers formed to leverage the benefit of economies of scale and a better connect to market. The purpose of FPOs is to offer input and output services to members and to act as aggregator. FPOs can negotiate with institutional buyers to leverage better prices for its farmer members. With the government’s thrust on promoting 10,000 FPOs, many corporates have invested their resources through CSR to promote FPOs.

However, the performance of FPOs has been mixed. There is evidence showing FPOs benefiting their members like in the case of the Agriculture Production Cluster (APC) project of the Odisha Government. While there are examples of successful FPOs, there are plenty of failures as well.

Empirical evidence suggests that the success of FPOs depends on multiple factors — one being the active participation of members. While market linkages, value addition, access to finances, etc., are vital for any FPO to succeed, it is ultimately a member-based organisation, and its success is to be defined by the benefits derived by its members. The social and economic goods derived from FPOs are the outcome of collective actions.

For any collective action to sustain, there is a need for a social movement. This is more so if there is urgency for a change in the way things operate. Social movement is an organised effort by a large number of people to change some aspects of market or society. Market failures are the primary sources of social movement.

Amul shows the way

One of the incredible examples of social movement reinforcing collective action is that of Amul in Gujarat. Today, Amul’s ₹72,000 crore turnover is an outcome of collective action from the past. Self Employed Women’s Association (SEWA), Ahmedabad, is another such example.

FPOs can leverage social movement in three ways. First, it can help FPOs engage in conflictual collective action. This implies oppositional relationships between actors who are seeking control over the same stake. For example, FPOs can mobilise their members against uncertain and exploitative agricultural value chain nurtured by middlemen. Member participation could get momentum if the agenda is framed as protecting the access over the value chain as against surrendering before the mediating agencies.

Second, social movement survives on dense informal network among actors. FPOs promoted by social movements can leverage these informal networks among actors to spot and leverage unprecedented opportunities. Coalition with various interest groups including political parties are key to success of FPOs.

Such coalitions need not be based on a common shared goal rather can be purely instrumental in nature to ensure exchange of resources. Many agriculture start-ups are finding partnering opportunities to collaborate with FPOs.

The third benefit that social movement can offer is that of collective identity. It brings a sense of common purpose and shared commitment to cause which enables members to connect to FPOs not merely through an economic transaction but beyond a business goal. Many of the FPOs struggle to retain their membership in 2nd and 3rd year of operation. This is mostly because they fail to offer any meaningful benefit to members.

Collective identity enables members to view themselves as a part of larger societal change beyond individual benefits. Members viewing themselves as an instrument to influence the food value chain would find it more meaningful to cooperate with the FPOs than those looking at FPOs as merely another buyer.

The sense of collective identity can also help FPOs in different locations to collaborate with each other even when they are probably not dealing with the same product or market.

The writer is faculty member, Institute of Rural Management Anand (IRMA)

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