Are farmer producer companies ready to behave as business entities? Insights from the vegetable-based farmer companies in West Bengal, India

Abstract

Farmer producer companies are seen as an institutional arrangement to provide market access and sustainable livelihood to small farmers. In India, more than 4,200 producer organizations were registered over the last 8–10 years to mobilize millions of farmers to enhance their income through collective action. However, most of these organizations are at an early stage of establishing themselves amidst several hurdles. This study attempted to understand the challenges faced by the farmer producer companies (a type of producer organization) with the help of primary data collected through interviews of the CEOs of 36 such companies in West Bengal, India. The study also analyzed the issues concerning developing a supply-chain by producer companies with institutional buyers based on a real-time experiment, which involved examining the process of supply of vegetables to a bulk purchaser. The study found a lack of trust and awareness among the farmers to be significant hurdles to form producer companies. Inadequate training, inept management, and poor organizational skills of the members challenge the functioning of such companies. Further, some of the inadequacies in the supply-chain of a producer company, as found in the experiment, can be improved by the coordinated use of technology, training, and planning.

Keywords

• small farmers
• farmer producer companies
• collective action
• sustainability
• challenges
• supply chain experiment