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Policy Report No. 27

Farmer Producer Companies: Preliminary Studies on Efficiency and Equity from Maharashtra

In recent years, the concept of Farmer Producer Company (FPC) has gained the attention of researchers. Though relatively new in India and still in an emerging phase in Maharashtra, these FPCs are being viewed as a possible replacement for the old cooperative model and taken the form of new movement. The formation of FPCs in the districts of Maharashtra began in 2015 under the Maharashtra Agricultural Competitiveness Project (MACP). In Osmanabad and Solapur districts of Maharashtra, FPCs have been in operation for the past three years. As FPCs gained the attention and participation of the farmers it becomes pertinent to study their formation and performance. 

This Policy Report attempts to look at the FPCs in Solapur and Osmanabad districts of Maharashtra to ascertain the level of inclusiveness and participation of the various categories of farmers in the running of the company. The study points out that caste and family hierarchies continue to hold a grip on ownership patterns, albeit in the early days of the FPCs. However, it can be said that the FPCs have the potential to overcome the difficulties faced by the farmers in selling their produce directly in the conventional market arising out of rigid vertical coordination of the middlemen based on the experiences of the farmers with the producer company model.

The Report also includes an analysis of the new policy on the FPCs and attempts to assess the differences between the old cooperative Act and new Farmer Producer Companies Act.

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