Abstract
Farmer Producer Organisations (FPOs) have emerged as an important institutional mechanism for addressing the structural disadvantages faced by small and marginal farmers in India. Fragmented holdings, limited bargaining power, high transaction costs, weak access to institutional finance, inadequate post-harvest infrastructure, and uneven market access constrain individual producers' ability to participate effectively in agricultural value chains. This paper examines whether the expansion of FPO formation has been accompanied by comparable progress in financial integration, market integration and organisational sustainability. It adopts a descriptive, analytical macro-level research design based on secondary data from official government and institutional sources, with particular use of NABARD, the Small Farmers’ Agri-Business Consortium (SFAC), the Ministry of Agriculture and Farmers Welfare, and the Economic Survey 2025–26. The analysis maps the evolution of FPO policy and the institutional architecture of support and examines formation, credit linkage, market linkage, digitalisation and selected state-level evidence. As of 31 July 2025, NABARD reported 6,219 registered FPOs with 2,903,239 shareholder members; 2,962 were credit-linked, and 4,585 were market-linked. These figures indicate that organisational formation and economic integration are related but distinct stages of FPO development. The paper therefore proposes a lifecycle approach—formation, stabilisation, commercialisation, expansion and graduation—and an outcome-oriented sustainability framework covering institutional strength, finance, markets, management, member outcomes and infrastructure. The paper argues that future policy monitoring should increasingly complement formation targets with indicators of active membership, business transactions, working-capital access, value addition, profitability and farmer-level benefits.