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Spice is predominantly cultivated by small and marginal farmers. Such farmers lack access to modern methods and technologies of production and are also not fully aware of the quality norms and requirements of the market. They are also unable to avail of easy credit facilities available from banks and are dependent on others for finance at heavy cost to themselves.
To enable these farmers, meet the challenges being faced by them, the government promoted the concept of Farmer Producer Organis ations (FPOs) which are collective institutions owned and managed by farmers themselves. FPOs have emerged as legally registered entities and can build inclusive and transparent value chains that can address the various constraints inhibiting their constituents. They help integrate farmers into value chains instead of just supply chains that ensure that they benefit from every stage of the process
FPOs can help farmers aggregate their resources and obtain inputs like quality seeds and good planting material, safe pesticides and other chemicals in bulk at competitive rates thereby enabling them to reduce their cost of production. Through them it is possible to create shared infrastructure in the form of processing and storage facilities. This aids in minimizing post-harvest losses and reducing waste.
Making it more marketable
FPOs have become integral to ensuring consistency and quality of produce, which is a prime requirement of both global and domestic markets. They provide access to new technologies and good agricultural practices (GAP) and enable organisations to conduct training programs on such matters in a more effective manner. Farmers can avail themselves of services which hitherto may not have been offered to them like soil testing and crop planning. It enables them to purchase certified and quality seeds as well as bio input at viable and competitive rates
It also becomes possible to set up primary and secondary processing facilities at the village and farm level which helps farmers clean, dry and grade their produce more easily and make it more marketable as well as reduce post-harvest losses which are the bane of small and marginal farmers. Value addition at this stage of the value chain aids the farmer to obtain a better price and higher unit value realisation thus helping him to increase his income and improve his standard of living.
FPOs help farmers to aggregate their produce collectively and sell in commercially viable lots. Buyers would prefer to do that rather than purchase fragmented lots from individual small farmers. Aggregation of produce also assists in improving the collective bargaining power of the farmers / FPOs and provides a direct link to the market. Farmers are therefore able to obtain a better price on their offerings. Operating through a FPO thus gives the farmer a better chance of obtaining a fairer price than negotiating on his own. They also open doors to markets which may have perhaps been inaccessible to them like retail chains both in the export and domestic markets, food processing companies, exporters and institutional buyers. Online and grocery platforms are becoming increasingly popular and operating through a FPO will expose farmers to a larger market.
Establishing market linkages
Obtaining a fair and equitable price is central to farmer empowerment and FPos are instrumental in helping to achieve this. They enable farmers reach end users more directly and establish close market linkages by eliminating some layers and middlemen in the distribution channel This ensures a better price realisation for the farmer. Members of FPOs are in a better position to obtain market information and trends than individual farmers and hence it makes it possible for the former to negotiate a price in a more effective manner. Also, collective bargaining through a FPO leads to more equitable prices and better payment terms
Another important area where a FPO plays a major role is by providing better and improved access agri-tech innovations and digital technology. These tools simplify operations and support in setting up traceability systems which are now becoming essential to the export markets and large-scale retail chains. Such innovations make farmers more responsive to the needs of the market and help achieve better efficiency.
FPOs have shown themselves to be integral to empowering the farmers but this requires strong leadership, high professionalisation and financial discipline on their part. if this is done FPOs will become a vital part of India’s agricultural ecosystem and be the harbingers of empowerment and prosperity to our farmers.
(The author is Chairman- World Spice Organisation)
Published on November 22, 2025
