Strengthening Rural Economy Through Farmer Producer Companies

Abstract

While there has been a significant improvement in many human development indicators in rural India over the last few decades, economic and social inequalities faced by marginalised groups persist. Agriculture and allied activities continue to be the mainstay for majority of the households in rural India. Economic non-viability of agricultural production, combined with deterioration of soil quality and decline in groundwater levels, has worsened the agrarian distress and amplified the precarity of agricultural households. It is therefore imperative to re-imagine a rural economy where farmers (especially small and marginal ones) have access to non-exploitative markets and are able to generate higher incomes with reduced uncertainty and risk.

As past experience has shown, one way to achieve these goals is through collectivisation of small and marginal producers. This chapter shows how a new form of producer collectives, namely farmer producer companies (FPCs), have the potential to help farmers move beyond subsistence agriculture and indebtedness and build stronger rural communities. It also outlines some ways of improving the viability of producer companies by rethinking how they are promoted, their operating models, linkages with government support and capacity building of their board members and teams. Underlying these arguments is our broader imagination of ‘smart villages’, moving beyond the conventional understanding focused on the use of digital technologies to considering digital technologies as enablers to achieve equitable social, economic and ecological outcomes for rural communities.