Study Finds Most FPOs Need Outside Experts to Reach Markets
A study on the Farmer Producer Organisation (FPO) sector was released on October 12, 2026 by the National Association of Farmer Producer Organisations (NAFPO).
It says most FPOs, in their current form, lack the skills, systems and money needed to connect with markets on their own. It suggests that third-party organisations (outside companies and agencies) should step in and help them build this ability.
The study accepts the criticism that many FPOs exist only on paper or cannot provide even basic services to their member farmers. But it says the "Formation and Promotion of 10,000 FPOs" scheme helped the country understand the problems of organising farmers at a very large scale. The 10,000 target was reached by February 2025.
Three case studies show different market models. Two follow a Business-to-Business (B2B) model that links FPOs to large organised buyers. One follows a Business-to-Consumer (B2C) model that helps FPOs with branding, packaging and pricing for end consumers.
In one example, a mustard producer company in Mathura, Uttar Pradesh, saw its revenue rise from ₹50 lakh to ₹1.2 crore with support for warehousing, working capital and buyer links.
Farmer Producer Organisations (FPOs)
A Farmer Producer Organisation, or FPO, is a group of farmers who come together and form their own registered business. The farmers are its members and owners. Together they buy inputs like seeds and fertilisers in bulk at lower prices, store and process their crops, and sell in larger quantities to big buyers. In simple words, an FPO gives small farmers the bargaining power of a big farmer.
The study says that getting FPOs registered was only the first step. Selling well is the hard part, and most FPOs do not yet have marketing skills. So outside players, like warehouse-finance firms, input companies and consumer brands, are filling the gap for now.
Agricultural Produce Market Committees (APMCs) and Mandi System
An Agricultural Produce Market Committee (APMC) is a body set up by a state government to run a regulated market, called a mandi, for farm produce. Farmers bring their crops to the mandi, licensed traders bid for them in an open auction, the produce is weighed, and the farmer is paid. The APMC makes the rules for this trade and collects a small fee on it. Most farm produce in India that is sold in organised wholesale markets passes through such mandis.
The study shows why FPOs struggle to sell well. The traditional route is the APMC mandi, where an FPO is just one more seller facing a few traders and agents. The firms in the case studies help FPOs go around this by linking them directly to warehouses, big buyers and consumers, which is the kind of "multiple channel" marketing that APMC reforms have tried to allow.
- Study on FPOs released by: National Association of Farmer Producer Organisations (NAFPO), October 12, 2026
- "Formation and Promotion of 10,000 FPOs" scheme: Central Sector Scheme approved in 2020; outlay ₹6,865 crore; target achieved by February 2025
- Scheme support: ₹18 lakh per FPO over 3 years; equity grant up to ₹15 lakh; credit guarantee up to ₹2 crore; CBBO support up to ₹25 lakh per FPO over 5 years
- Market models in the study: two B2B (linking FPOs to organised buyers) and one B2C (consumer branding)
- Case example: a Mathura mustard producer company's revenue rose from ₹50 lakh to ₹1.2 crore
- e-NAM: launched 14 April 2016; 1,656 mandis (2026); 4,518 FPOs registered (June 2025)