Farmer Producer Organisations (FPOs) as Sustainable Transition Intermediaries: Insights from India

Abstract

The scholarship on sustainability transitions has surprisingly few studies on agriculture and food systems, especially from emerging economies such as India. The role of firms and businesses, especially cooperatives and producer organisations in agri-food systems transitions, has not been explored as much. Over the past decade, many Farmer Producer Organisations (FPOs) have been formed, primarily focused on facilitating the supply of agro-chemical inputs, while offering limited support to farmers in transitioning towards ecologically sustainable agricultural practices. This study looks at four case studies FPOs from across geographies in India, providing an opportunity to look at these FPOs as intermediaries of sustainable transitions and how they situate themselves in the agricultural ecosystem that has mainstream market actors as well as FPOs that are not engaged in sustainable agriculture. Additionally, to understand the intermediary role of FPOs, it is essential to examine how key actors—such as civil society organizations, financial institutions, marketing partners, and government agencies—contribute to and influence the intermediary role of FPOs in sustainable transition. These FPOs that are engaged in and promote sustainable agricultural practices bring out their strong potential transition intermediaries of the future.

Keywords

Producer organisations sustainable agriculture India sustainability transition transition intermediaries

Introduction

As both developed and developing nations struggle to meet sustainable development goals, there is a growing recognition of the interconnected challenges that threaten food security for the expanding global population and highlight the true cost of maintaining sustainable agrifood systems (FAO 2023). Understanding this complexity is fundamental for transitioning to, and hence building sustainable food and farming systems (Mrabet 2023). Global food self-sufficiency is expected to decline, even with increased food production through sustainable agricultural intensification, as projected food demand is anticipated to surpass potential production capacity (Beltran-Peña et al. 2020). Decades of chemically intensive agricultural practices driven by the Green Revolution now pose significant threats to soil and water ecosystems, resulting in production systems with a substantial ecological footprint (Bawa and Seidler 2023; Katsir et al. 2024).

With each passing agricultural season, the shift towards more sustainable agro-food systems has become not merely a trend but a necessity for the survival of both plants and people. Sustainable agriculture seeks a balance of people, profit and planet. It aims to achieve optimal crop production while maintaining soil health, conserving natural resources and preserving ecological balance and biodiversity within agroecosystems (Sharma et al. 2019). The effective conceptualisation, implementation and functioning of policy interventions for sustainable agriculture at both the national and state levels require administrative bodies to move beyond narrow frameworks of techno-scientific and economic rationality (Gerber and Raina 2018) and oversee their formulation based on local situation (Rama Rao et al. 2018). In 2014–15, the Government of India launched the National Mission for Sustainable Agriculture (NMSA), which formally defines sustainable agriculture in the Indian context and identifies 10 key dimensions of sustainability (GoI 2014).

The extensive and evolving body of scholarship on sustainable transitions views environmental issues as significant societal challenges arising from production patterns and unsustainable consumption. Within the agri-food systems transitions research, there is a need to address inclusion and equity dimension, and governance of integrated agri-food systems, apart from focusing on low- and middle-income countries (Hebinck et al. 2021). The transition to sustainability in agriculture in the Global South is not navigated as easily because the existing frameworks do not adequately account for power relations and knowledge hierarchies in developing country contexts. A review of literature of published articles on sustainability transitions in India indicated that there is a missing emphasis on ‘agriculture’ in sustainability transition studies even as research on Indian agriculture has paid little attention to the challenges in sustainability transitions (Prasad et al. 2024; Prasad 2016). Agro-food sustainability transitions refer to the fundamental transformations required to advance towards sustainable agriculture and food systems (El Bilali 2019). To achieve impact, it is essential to develop pathways that involve active engagement with stakeholders (de Koning et al. 2021). In their examination of stakeholder engagement, Gonzalez-Porras et al. (2021) found that viewing stakeholders not only as change agents but also as part of a relational and collaborative process can be understood as a form of change agency that enhances sustainability transitions.

The role of firms and businesses, especially cooperatives and producer organisations in agri-food system transitions, has not been explored as much, with Groot-Kormelinck et al. (2022) being a notable exception. The transition from green revolution technology to sustainable/organic farming cannot be achieved overnight. It calls for a planned strategy that may go through stages of transition over a few years. Countries like Sri Lanka paid a heavy price in terms of a sudden drop in productivity across the country when the government tried to force farmers to change at short notice (Wipulasena and Mashal 2021). The transition involves multiple challenges, namely creating seed banks, investing in standardised organic or non-chemical input production, recognising and validating farmers’ innovation, and building institutions that help the farmers to produce and sell sustainably grown crops in the market. These challenges must be dealt with simultaneously as ignoring any of these leads to negative results and farmers may revert to chemicals or adopt them only partially.

Sustainable agriculture remains largely peripheral in India. While various regions across the country have seen innovations and pilot projects, most have been relatively niche. For instance, states like Sikkim have adopted predominantly chemical-free agricultural practices, earning the ‘organic’ designation, while others, such as Andhra Pradesh, have successfully experimented with and scaled up sustainable methods, supported by government initiatives and stakeholder involvement. Nevertheless, the widespread adoption of sustainable farming at both the regime and ecosystem levels remains limited. Additionally, evidence of the impact of sustainable agriculture on economic, social and environmental aspects is scarce, both in terms of geographical reach and the availability of long-term assessments. Currently, there are 30 identified Sustainable Agriculture Practices and Systems (SAPSs), many of which overlap, yet fewer than five million farmers—approximately 4%—are engaged in these practices in India (Gupta et al. 2021).

A Situation Assessment Survey (SAS) of agricultural households conducted during the NSS 77th round reported that approximately 89.4% of agricultural households own less than two hectares of land. These households face significant challenges in thriving and, in some cases, even in surviving within the current economic landscape. They struggle to accumulate sufficient capital, lack access to quality inputs, experience inadequate irrigation facilities and face delays in receiving timely advice. Poor extension services contribute to low yields and increased instances of crop failure, among other issues (Ghosh 2024). Farmer Producer Organisations (FPOs)¹ are regarded as vital institutions capable of safeguarding small farmers in a market increasingly dominated by global corporations that are taking over agricultural production and marketing. FPOs facilitate successful participation in modern competitive markets by providing a range of services that enhance member engagement, thereby fostering producer agency and empowerment (Penrose-Buckley 2007; Trebbin and Hassler 2012).

Emergence of FPOs as a New-generation Cooperative

FPOs enable producers of agricultural commodities to collectivise and access inputs and sell their farm output in the market. In Indian law, these entities are conceptualised as new-generation cooperatives that are registered as companies and are thus deemed safe from elite capture and too much interference from the state. However, the nature of these enterprises being a hybrid between company and a cooperative and the dual purpose of making profits while benefiting the shareholding farmers render their management very complex. There are also issues of governance since FPOs are inevitably situated in an ecosystem where there are several actors at various stages of the value chain that are more powerful than the farmers and management of the FPO. Decision making to access good quality extension services, farm inputs, storage and processing facilities and working capital and marketing partners is all subject to the ability of the FPO leadership and management to engage in negotiations with the various stakeholders within the ecosystem.

A few FPOs owned by marginal farmers and women in the Indian context have started using their collective enterprises to bring about systematic changes in their farming systems, steering them away from the use of harmful agro-chemical inputs and non-sustainable practices. The study of processes they have gone through and the impacts they are making on their member producers offer a great opportunity to understand their role as potential ‘transition intermediaries’. In the case of agricultural and food systems transitions, FPO are an important social innovation (Chebrolu and Dutta 2021). The need to address the transition needs of the members, thus, is the parameter that impacts how the FPO is governed and managed with respect to at least three attributes, namely production, value addition, ecosystem support. This, in turn, would depend on the identity that the enterprise has created for itself.

In this article, we have selected four cases of FPOs which were formed and promoted around the year 2013, spread across different geographies in India. These are trying to change farming systems even as they address the challenges of markets and socio-economic inclusion. The inferences may be considered a starting point for more systematic studies on this alternative, which promises to break the stalemate in sustainability transition of agricultural systems in India. Using the case-analysis method, this study helps to answer the following question:

How have FPOs in India balanced environmental sustainability with their financial and social performance? Can FPOs play the role of sustainability transition intermediaries? If so, what factors enable the same and what can other FPOs in India learn from these in moving farmers towards sustainability?

The rest of the article is arranged as follows. We describe the methodology used in the study in Section ‘Methodology’, followed by a brief overview of the four case studies in Section ‘Pathways to Embedding Sustainability’. In Section ‘Findings and Discussion’ we discuss the findings using a transitions intermediary lens. We conclude, in Section ‘Conclusion’ by highlighting key challenges in transitioning to sustainable agriculture and the need for promoting FPOs that are able to address these challenges from the very start as part of their vision and mission.

Methodology

The literature on FPOs in India has been increasing, but there are few detailed case studies that explore various dimensions of incubation, business models, governance and performance. The authors were involved in developing case studies following a common protocol in a recent volume that explored the co-creation of new knowledge on FPOs across various geographies in India (Prasad et al. 2023). The 15 FPOs in the volume represent great variety in size, membership, scale of business, locale and especially their normative underpinnings. The cases in the volume were chosen through a combination of convenience sampling that included willingness of the FPO to share financial data and enable interactions with the members, Board of Directors and stakeholders and with a minimum of 3 years in operation following a common protocol of all the authors. From this set, four FPOs were selected for this article that had an orientation towards sustainable production and consumption of food. The FPOs, being the unit of analysis, represent four different geographies of central, north, south and western India with diverse business models. Few FPOs in India have been studied with an explicit sustainability lens and we hope to, through the analysis, provide useful direction for FPOs of the future to envision themselves as sustainable ‘transition intermediaries’.

Very few of the over 30,000 FPOs in operation in India promote sustainable agricultural practices as part of their vision and mission. Their business models are often premised on selling agro-chemical inputs to their members with the FPOs enabling agro-chemical industries with last-mile connect to farmers. A few FPOs though have chosen to perform the enabling role of a sustainable transition intermediary by seeking to create opportunities for farmers that are both profitable and planet-friendly (Prasad et al. 2023, 287–88).

All four FPOs were promoted by institutions that have been champions of sustainable agriculture in their regions. They are diverse in terms of commodities and business models as seen in Table 1.

Table 1.

Snapshot of the Four Farmer Producer Organisations (FPOs).

	Desi Seed	Mahila Umang	Ram Rahim	Krushidhan
Location	Mysore, Karnataka	Ranikhet, Uttarakhand	Dewas, Madhya Pradesh	Ahmedabad, Gujarat
Year of formation	2013	2009	2012	2013
Promoting institution	Sahaja Samrudha	Grassroots	Samaj Pragati Sahyog (SPS)	Development Support Centre (DSC)
Shareholder profile	Individual farmers and farmer groups	Women organised in SHGs	SHGs of tribal women	Individual farmers, farmer groups and SHGs
Total shareholders	>500	1,000 (110 SHGs)	>5,000 (364 SHGs)	4,409
Shareholders’ equity in INR (2020–21)	346,850	215,880	7,055,740	4,410,000
Turnover in INR (2020–21)	5,595,000	14,030,936	85,347,394	85,045,944
Main product	Openly sourced, open-pollinated traditional seeds	Fruits, pulses, millets, knitted woollen wear	Red gram, chickpea, wheat, sorghum, maize	Agri-inputs, certified and foundation seeds, potatoes, spices and pulses
Key value addition	Buyback from seed farmers, sell through Sahaja Organic stores	Processing to make jellies, pickles, split pulse and so on	Local grading, processing and packaging for sale through safe harvest, farm input sales to SHG members	Backward integration for agri-inputs and forward integration for spices and pulses processing

Note: SHG, self-help group.

Pathways to Embedding Sustainability

FPOs like Desi Seeds, Ram Rahim, Mahila Umang and Krushidhan have established sustainable agriculture as a core value and possess substantial experience and data to substantiate their practices. We briefly outline these four FPO cases, focusing on their context and origin, the evolution of their business models, governance and management structures, and financial performance.

Desi Seed Producer Company

Desi Seed Producer Company Limited (hereafter Desi Seed) was incorporated in 2013 as a dedicated entity focused on the seed business. Since the early 2000s, Sahaja Samrudha has promoted organic and sustainable agricultural practices in Karnataka. They recognised that farmers would benefit more effectively if market linkages were established and strengthened, which led to the formation of Sahaja Organic Producer Company (Sahaja Organics) in 2010. As the market for organic produce steadily expanded, the potential for producing and marketing organic seeds became increasingly clear.

Sahaja Samrudha’s inception coincided with a significant agrarian crisis in the state, prompting the belief that organic farming could liberate farmers from the vicious cycle of high input costs, rising debt and poverty. Organic farming gained increasing visibility in global and Indian policy discussions,² leading to the launch of the National Programme for Organic Production (NPOP) in 2001, which established an institutional framework for the accreditation and certification of organic farming processes.³ Additionally, Karnataka’s Organic Farming Policy of 2004 was among the first state-level policies formulated in this domain.

Desi Seed is managed by a six-member Board of Directors, including one woman. The CEO, with a background in manufacturing, oversees operations. The Board meets quarterly, or sometimes monthly, to review progress and make policy decisions. They also set production targets and prices based on market demand, which are then shared with farmers.

The company produces a variety of certified organic seeds, including vegetables, grains like millets and rice, fruits, flowers and herbs. The seeds come from open-pollinated farms, usually under 2.5 acres, requiring more farmer commitment than conventional farming. Local community seed banks store seeds for local use and market sales. To compete with hybrid seed sellers, the company offers a buyback guarantee at a predetermined price. Seeds that meet germination and quality standards are sold under the ‘Sahaja Seeds’ brand to farmers, home gardeners and organisations. It also supplies seeds and technical advice for programmes like Karnataka’s Organic Village Programme and Kerala’s Kudumbashree. Retail sales are limited to Sahaja Organic store seed racks.

Over 50% of Desi Seed’s revenue comes from direct sales via online platforms and social media, with about 30% from local farmers. In 2016–17, the company faced a major setback, incurring a loss of nearly ₹400,000, and the net operating margin dropped to −25%. However, it became profitable again in 2017–18 and 2019–20, though it saw a slight loss in 2018–19. Each year, 25% of its net income is allocated to reserves to ensure long-term stability. In 2020–21, it earned ₹6.52 million, a 45% growth from the previous year, largely driven by increased demand from urban farmers during the COVID-19 lockdown, many of whom were working from home.

Mahila Umang Producer Company

Mahila Umang Producers Company, registered in 2009, is an ethical, women-led enterprise promoting Fair Trade principles. It was promoted by the Pan Himalayan Grassroots Development Foundation and operates in the small Himalayan village of Umang, located in Naini, Uttarakhand, at 6,000 feet, 9 km from Ranikhet. The company has its own processing facilities, administrative offices and a showroom for selling its products.

Umang has an all-women Board, consisting of seven members elected by self-help group (SHG) members from among the producer-members. It follows a rotational leadership model, allowing leaders to progress from SHG leaders to area/cluster heads, and eventually to Board members. The organisation is led by a female Managing Director, with 70% of the team also being women. This gender-inclusive approach is the key to enhancing and empowering women’s participation within the organisation.

Umang emphasises ethical business practices rooted in ecological respect and non-polluting production processes. It has partnered with e-commerce platforms and developed its own brand, ‘Kumaoni’. Collaborations with exhibitions, new restaurants promoting traditional cuisine, market players like Fabindia, online sales and self-owned retail outlets are part of its strategy. However, balancing costs, pricing and securing fair prices for its ethically produced premium products remains a challenge (Bhamoriya and Paul 2023).

Umang has evolved into a revenue-generating social enterprise, creating sustainable livelihoods for its shareholders. In 2009, Grassroots provided an initial investment of ₹8 million through a grant to build infrastructure, acquire tools and cover basic expenses. By 2020–21, Umang’s revenue reached ₹14.03 million, with a modest net profit of ₹82,310 after taxes. Unutilised SHG savings deposits have been used to fund activities when needed, and short-term loans from SHGs have helped address working capital shortages in the past.

Ram Rahim Pragati Producer Company

Ram Rahim, a fully women-owned FPO, was registered in 2013 and promoted by Samaj Pragati Sahyog (SPS) in Dewas district, Madhya Pradesh. It operates in one of the region’s most underdeveloped and water-scarce areas, primarily inhabited by tribals. By 2006–07, women’s SHGs began selling their surplus in the Agricultural Produce Market Committee (APMC)-managed farmers’ market. When prices were unfavourable, they stored soybean—a major crop—in warehouses and used it to secure loans, which were then used to pay farmers. As operations expanded, SHGs were organised into clusters, and by 2012–13, the SHG federation was formalised as a Farmer Producer Company (FPC), representing over 5,000 women from 364 SHGs.

The Board of Directors of Ram Rahim consists of six women representing federations made up of SHG clusters. The Board meets quarterly, and all members are required to attend the Annual General Meeting (AGM). Additionally, bimonthly SHG meetings are held in the villages. The FPO’s CEOs are typically trained management professionals who are given time to understand the local social and business context.

Ram Rahim initially aimed to eliminate middlemen, but soon realised that this alone was not enough to ensure sustainable benefits for women farmers. To address this, SPS shifted its focus to cost reduction by introducing decentralised sorting and grading at the farm level. Between 2013 and 2017, the FPC exited several initiatives, including biopesticide sales, seed production and hedging soybean at the National Commodities and Derivatives Exchange (NCDEX). Currently, it is involved in input and seed sales to farmers and sells processed and packaged produce under a contract with Safe Harvest Private Limited (SHPL), a social enterprise that markets food grown using non-pesticide management (NPM) methods.

Since 2015–16, Ram Rahim has been a profit-making enterprise, earning ₹3.3 million in 2020–21. Its main revenue comes from sales to SHPL, followed by input sales to farmer members. SPS’s contribution to operational costs peaked at 12% in 2017–18 but dropped to 5.5% by 2020–21, as Ram Rahim assumed more operational expenses like salaries, travel and administration. The company now regularly secures working capital loans from Friends of Women’s World Banking (FWWB) and Nabkisan. Increased profits have allowed it to offer incentives to SHGs, including discounts on inputs, premiums on output and bonuses linked to farm produce sales through the FPC.

Krushidhan Producer Company Limited (KPCL)

KPCL was established in 2013 to improve agricultural productivity in Gujarat, where 60% of the population relies on farming for their livelihood. Supported by the Development Support Centre (DSC), KPCL focuses on participatory irrigation management (PIM) in irrigated areas and watershed management in dry-land areas. With its mission to address diverse agricultural needs, KPCL has evolved into a multi-location, multi-commodity and multi-community FPC.

KPCL initially focused on retailing pesticide-free and organic produce but discontinued it due to low margins. However, selling commodities to the government under the minimum support price (MSP) scheme has been profitable despite just a 1% margin, thanks to high volumes. The production of certified and truthfully labelled seeds by farmers shows promise due to moderate margins and significant volume potential. Contract farming of potatoes serves as an ‘anchor activity’ in KPCL’s portfolio, allowing the inclusion of other activities that cater to the needs of different groups, even if they are less profitable.

Krushidhan has 11 employees, in addition to the CEO, organised into three categories: finance and administration, supervisory staff and field staff. To prevent internal threats, KPCL emphasises transparency, democratic decision-making and aligning members with common goals. During the COVID-19 pandemic, staff voluntarily deferred 20% of their salaries until the company’s financial situation improved. A key challenge is building the financial and legal literacy of the Board of Directors, which should continue beyond the incubation phase due to changing regulations. The management recognises the importance of maintaining minimal profitability in the early years to build fixed assets, reserves and surpluses, which will help secure commercial and institutional loans for scaling activities.

By September 2019, Krushidhan had reserves and surplus totalling approximately ₹0.39 million. Its fixed assets increased from ₹0.075 million to ₹1.224 million, which included a plot of land and a 35 sq. ft. godown for storing agricultural produce. The company secured long-term debt of about ₹1.83 million, with ₹0.80 million contributed by large farmers and the rest from KCs/SHGs. In the 2020–21 period, Krushidhan accessed an additional long-term loan of ₹2 million from NABKISAN at a favourable interest rate of 8.5%, which is lower than that of commercial banks. The four case studies of the FPOs reveal that an enabling ecosystem is required in transitioning towards sustainable agriculture in the long run. The relationship between the stakeholders and the FPOs is dynamic and keeps evolving over time while transitioning towards sustainable agricultural practices (Saxena and Prasad 2024). Table 2 outlines the roles of key stakeholders within the ecosystem, including promoting institutions, market partners, financing partners, infrastructure and services partners, certification agencies and the transition pathway, along with the associated challenges they face in the transition process.

Table 2.

Key Stakeholders’ Role in Sustainable Transition.

FPO Role in Sustainability Transitions	Desi Seed	Mahila Umang	Ram Rahim	Krushidhan
Production	Community seed bank, buy back agreement with seed producers	Enables organic certification of farm produce through PGS⁴	Move towards native crops, sustainable agricultural practices (including NPM)	Production of certified and foundation seed, potato contract farming
Market partner	Similar philosophy around seed sovereignty and sustainable production	Partners are conventional market players in the agri and food sector	Promotion and sales of sustainably grown food in urban markets	Retailing of commodities especially pesticide-free and organic produce
Financing partner	Credit support for seed production	Finance accessed through women SHGs	Loan accessed from NBFCs and banks	Short-term and long-term loans were accessed based on viable business activities
Institutional support	Support for certification, testing, integration into the Sahaja ecosystem	Linkages to marketing partners, necessary certifications, trainings, exposure visits	Training and support through financial linkages and infrastructure support	Production, marketing and technical support along with financial support
Certification agencies	NPOP certification and peer review-based certification helped gain legitimacy in market	Fair Trade partner and peer review-based certification for foreign and Indian buyers	NPM produce does not require certification in India	Promoted production of certified and foundation seed for wheat crop, thereby benefiting both producers and consumers
Transition pathway	Promotion of seed saving among farmers, maintaining seed bank and advocating traditionally grown organic produce	Reviving and promoting traditional intercropping methods, PGS and Fair-Trade certification	Farmers adopting NPM and focus on native crops	Reduction of chemical input; working towards organic farming
Challenges in sustainable transition	Niche market for open pollinated and traditional seed production. Issues of organic certification limiting scaling up	Value addition to local produce and branding become necessary in order to reach distant markets	Working capital constraint, search for market partners beyond procuring NPM produce at a competitive price	Measuring and making stakeholders understand the health and nutrition impact is tough

Note: FPOs, Farmer Producer Organisations; NBFC, non-banking financial company; NPM, non-pesticide management; PGS, Participatory Guarantee System.

While the table provides a snapshot of the roles of stakeholders that facilitate sustainable transitions to FPOs, it is crucial to recognise that these roles evolve over time. Moreover, it is important to notice that these four FPOs are mediating the move towards sustainability at various stages of the value chain. Desi Seed produces and markets certified organic seeds. It is supported by an ecosystem geared towards sustainable food production, sales and consumption. However, in the larger ecosystem it interacts with actors that do not have promoting sustainability a mandate. Mahila Umang promotes locally grown produce and engages in value addition but often markets its products through partners who are conventional actors in the agri and food sector. While Ram Rahim promotes sustainable production and consumption through its partnership with SHPL, in the processing and logistics stages it is liaising with several actors who do not have a mandate to promote sustainability transitions. Finally, Krushidhan has primarily concentrated on rebuilding the agricultural system to enhance its viability and sustainability. The DSC has supported this effort by creating a systematic plan aimed at promoting sustainable and profitable agriculture, focusing on key objectives such as enhancing productivity, reducing costs, mitigating risks and increasing price realisation through value addition and market linkages.

The activities of FPOs, especially the ones that aim at transitioning towards a sustained economy for the member farmers, depend on engagements that extend beyond the agency of the enterprise, the shareholders, the Board and CEO of the FPO. FPOs are part of a ‘web of relations’ (Wicks et al. 1994) with other stakeholders that exist in the ecosystem. These include entities such as sellers of farm input and seeds, buyers, millers, exporters, retailers of farm produce, including big multinationals and retail chains, as well as funding institutions like banks and non-banking financial companies, APMC farmers’ markets, other cooperatives and most importantly the promoting institution. These stakeholders have different interests and in (and from) the FPOs.

Findings and Discussion

A transition pathway is a narrative that describes how a new or adapted system may evolve from an existing one. An ordinary marginal farmer to make the transition when surrounded by others who continue to use chemicals, would be almost impossible due to the inter-connectedness of farms through ecological pathways. FPOs can become transition intermediaries for sustainable food systems as they try to ‘work with what they have’ to achieve their social and ecological goals (Maye and Duncan 2017). Thus, while financial impact may be created in terms of profits and sharing of dividends and offering a better price than other market players, non-financial impact of such enterprises become equally important.

Impact Beyond Financial Metrics

FPOs pursue their social goals and business goals together, with the latter contributing to the former. Since FPOs are often promoted by non-profits or civil societies, their social goals are those propounded by their promoting institutions. The key attribute, however, is to be aware and mindful of the values that the FPOs are founded upon and not to compromise on them.

In the case of Ram Rahim, SPS’s focus on promotion of NPM of crops resulted in aggregating and marketing NPM crops. The choice of Ram Rahim’s key market partner, SHPL, also can be attributed to the common leadership and shared vision between SPS and SHPL. A focus on women entrepreneurship also helped Ram Rahim seek funding from FWWB. Somewhat similar is the case of Desi Seed, where Sahaja Samrudha’s vision of promotion of production and consumption of organically grown food, resulted in the broader movement in Karnataka as well as resulted in the formation of Sahaja Organics as well as Desi Seed, two FPOs that hold similar values and are part of the ecosystem.

Mahila Umang is deeply rooted in the values of Grassroots, prioritising the empowerment and dignity of women. Similarly, Krushidhan has made significant efforts to combat climate change by promoting the cultivation of short-duration varieties of wheat and castor. While innovative organic farmers received support for production and marketing, the adoption of organic farming remained limited, primarily for home consumption. An agri-extension system, comprising para-workers, provided the latest information on non-chemical and organic farming methods to Kisan Clubs (KCs) and women’s SHGs at the village level, fostering viable and sustainable agriculture.

Apart from Krushidhan, profitability is a concern for the other three FPOs as indicated in Figure 1. This low profit is not easily explained only by higher costs or suboptimal business models. Often, enterprises such as FPOs, especially the ones that are engaged in sustainable agriculture and work with vulnerable populations such as tribals and women in remote and rainfed regions, find it tough to compete with the market players with no such considerations and goals. FPOs such as these also are mindful of their processing and marketing partners and funding partners and may not sacrifice their values defined by the promoting institution and the Board for the sake of business. In that sense, these organisations are more ‘entrepreneurial’ in that they try to do the best business they can with a focus on local social and ecological context.

Figure 1.

Profit (Loss).

Mahila Umang’s vision is to integrate ecology, economics and equity. Beyond women’s empowerment, it engages in Fair Trade sales of farm produce and facilitates organic certification of members’ produce under the Participatory Guarantee System (PGS). Desi Seed has a direct vision of promotion of traditional organic seeds and work with other ecosystem actors in the ‘Sahaja’ universe to promote organically grown food. It has buyback arrangements with its farmers owing to tough competition from cheaply available hybrid seeds. Quality assured seeds are sold to farmers, urban enthusiasts and publicly funded institutions. Krushidhan and DSC worked in tandem to create an agro-extension system to serve the needs of 40,000 farmers in the target area to address a multitude of challenges related to organic production identified by the farmers, and considerable headway has been made. However, the biggest challenge is in finding assured markets with, if possible, premium pricing.

While all these four FPOs identify themselves outside the mainstream for-profit business, they interact with multiple private and public entities that are part of the ecosystem to enable transition, as per the needs of their members, while striving to remain in business. While they may not be able to cause an ecosystem or regime level change due to the constraints of local political economy and the agricultural marketing context, they nevertheless present key pilots in the local niche. This ability to articulate its identity and goals can help in self-conceptualisation as an important intermediary (Rosol and Barbosa 2021) in a market where alternative and conventional actors exist and influence the value that FPOs (Chiffoleau et al. 2019) are able to create for farmers.

Identifying as an Alternative in the Market

All the FPOs discussed above resemble the alternative entities in the food system that distance themselves from the conventional actors in the agri-food industry. They have very strong identities in at least two aspects. First, they are democratically governed member-owned enterprises that are primarily functioning for the benefit of their shareholding producers and second they are promoting local, sustainably grown or foraged seasonal produce, adding value to it and selling to the consumers either through their own channel or through a partner.

The four FPOs have non-profits as promoting institutions and predate the 10,000 FPO schemes of the Government of India. In all the four FPOs, they have played a long-term crucial role throughout the life cycle of the FPOs, even if the nature of the relationship between the FPO and promoting institution has evolved. Although most non-profits have been able to develop market orientation, they still tend to subordinate their financial goals to their social goals (Padanyi and Gainer 2004). Ram Rahim came about as a result of the work done by SPS with tribal women led SHGs. Mahila Umang was incubated by Grassroots that was working with women SHGs in the hill state of Uttarakhand. Desi Seeds emerged out of the ecosystem that was enabled by Sahaja Samrudha towards promotion of organic and sustainably grown food. Krushidhan was incubated by DSC to make agriculture profitable and sustainable while managing the resources efficiently.

Mahila Umang espouses the core value of dignified living to women through value addition and sales of the produce of the Himalayan states to the markets in urban areas. Desi Seed differentiates itself from other seed companies through selling saved traditional seeds that are open pollinated. They do not sell their seeds through retail shops and believe in ‘seed sovereignty’ and the right of the farmers to save, use, exchange and sell seeds. Ram Rahim promotes NPM agriculture, a value that is at the core of its promoting institution, SPS and does business with an enterprise which shares this value. Also, Krushidhan encouraged farmers producing and/or consuming bio-fertilisers and bio-pesticides with limited volume and margin as part of ‘responsible farming’ along with retailing of pesticide free and organic produce.

The role of ecosystem partners especially the governments determines whether business models aiming at transition towards an alternative can become viable or not (Sarasini and Linder 2018). For instance, in the case of Desi Seed, the state policy played a role in the Sahaja Samrudha movement to flourish; however, there are constraints of marketing of organic seeds and farm produce as differentiated from conventional seeds and agri-produce. FPOs that are aware of their alternative nature seek partners that align well with their goals. Such partners may include funding partners, marketing partners, value chain actors, Board members, CEOs and shareholders of the FPO as well as government and civil society organisations.

Conclusion

There are changes both niche and systemic that are required for FPOs to recognise and mediate the transition needs of the farmer members. Such a transition cannot take effect in a vacuum and needs landscape level changes. Some of these changes are in (a) natural resource management and farming systems—which includes better water management and integrating farming system where it is missing, (b) cropping patterns and diversity, (c) innovative techniques for substituting non-sustainable methods and chemical inputs, for conserving natural resources and germplasm, (d) aggregating demand for eco-friendly agri-inputs sourced from outside, (e) aggregating farm produce and adding value through processing, packaging, storage, branding among other methods in order for farmers to realise higher prices, (f) exploring innovative ways of producing and marketing organic produce, (g) integrating collective organic certification which would provide the right kind of assurances to the consumer resulting in higher price realisation, (h) creating forums for educating consumers and strengthening consumer movement for organic produce, (i) creating new value chains that try to link organic producers directly with consumers to the extent possible.

For such changes to take effect though, FPOs very different from the ones which are being promoted currently are required. This is easier said than done since it requires accessing and spending resources on a market that is very niche compared to the conventional agri-food industry, by an enterprise that has other complexities of being farmers’ collectives that have profit goals as well as social goals. They need long-term handholding and support and an alignment of goals and values for working towards sustainable agriculture while being profitable and promoting farmers’ welfare. Insights such as those from this study are necessary as the GoI is contemplating setting up of FPOs on organic and natural farming produce, high value crops, clusters specific to any geography and such other produce clusters. A support system for value addition, processing and domestic and export market linkages is required while such FPOs will be called ‘Special produce Cluster FPOs’.

Managing shareholder’s expectations for transition towards sustainable agriculture and the interests of other stakeholders, including the government, is not easy. The current market and the policy are not geared enough towards incentivising production, sales and consumption of sustainably grown food. The lack of price incentive for organic produce in the market seems to be the most important break in the transition, which will need to be addressed sooner than later. Specialised state-level institutions with financial support from state government and Corporate Social Responsibility (CSR) foundations to address this issue could prove to be the next-level solution to hasten the transition. Conversely, for FPOs to comprehend the transition needs of both their members and non-members, and to position themselves as business enterprises focused on sustainable food production and consumption, it is essential to identify proxies and appropriate metrics that reflect the social and environmental returns on investment. Producer organisations must track and calculate metrics that capture both tangible and intangible benefits to effectively communicate their overall impact, which extends beyond financial statements. Research on collective enterprises, particularly FPOs, is still in its early stages but is expanding, presenting opportunities to develop frameworks that address the complexities involved in sustainable transitions.

Footnotes

Acknowledgement

We would like to thank the Small Farm Incomes (Ford Foundation) project at IRMA and the editors of the book “Farming Futures: Reimagining Producer Organisations in India”. We would also like to acknowledge the organising committee of the conference “Managing Sustainable Transitions in Agriculture: Newer Directions for Civil Action” where the work presented in this paper took shape. Lastly, we also thank the reviewers of the manuscript for their valuable suggestions.

Declaration of Conflicting Interests

The authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The authors received no financial support for the research, authorship and/or publication of this article.

Notes

ORCID iD

Abhishek Saxena

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