Agricultural marketing for marginal farmers -can farmers’ collectives be the solution?

The focus of the farm sector in the early decades of independence was mainly on production, in order to meet the food shortages faced by the country. However, the country in the seven and half decades journey, experienced commercialization of agriculture and also diversified into cash crops and horticulture. The main issue glaring at Indian agriculture is therefore the marketing of agricultural produce as poor logistics and weak supply chain are chronic deficiencies which create post harvest losses and low returns to the growers. The farmers are mainly resource poor marginal and small, who together number about 126 million and constitute 86 percent of landholdings. A solution to such marketing constraints is through forming institutional collectives such as Farmer Producer Companies which can create a network of farmers that can collectively respond to market demand. An exemplary example of such a company is Sahyadri Farms which has about 7958 registered farmers and covers 119 villages in Nashik district of Maharashtra state. Each farmer cultivates barely 1.25 hectares of land on an average but is still able to participate in the entire supply chain and benefit from the economies of scale. The FPO is further connecting with other collectives to enlarge, strengthen and diversify the supply chain. The government is aware of such strategies which can be a game changer in the rural sector and is hence promoting their formation through policy measures.