Many FPOs struggling as they face a slew of challenges

Why do a good number of Farmer Producer organisations (FPOs) struggle to carry on business? A host of challenges confront farmers when they do business. These include a lack of business and managerial acumen, the absence of patient capital, and the requirement of working capital.

FPO ecosystem stakeholders discussed these challenges at a roundtable organised by the Centre for Business Innovation at the Indian School of Business here.

Ram Kaundinya, a veteran from the seed industry, felt that FPOs should have professional Chief Executive Officers (CEOs). “They require extended funding cycles up to 5–7 years for capacity development. Farmers may not know how to conduct business. Hence they need well trained professional CEO. The Government can consider offering one-year diploma course to train youngsters as CEOs of FPOs,” he said.

Access to credit

“They require better access to credit and working capital. The government must mandate priority sector lending for FPOs. We also need to allow FPOs to use warehouse receipts, collective collateral, and forward contracts as security,” he said.

He felt that the governments should rope in FPOs in procurement activities so that they get assured incomes.

“We need to establish mentor pools in different parts of the country. The government can encourage mentor pools in each State. Without mentorship, agritechs may find it very difficult to navigate the system,” he said.

Azhar Tambuwala of Sahyadri Farms, felt that there was a need for strong leadership with intent and integrity to make the FPOs successful. He called for a proper mindset to run the FPOs as business entities, and not just as a farming activity.

Use of data

Siddharth Chatruvedi of Gates Foundation called for efforts to build a strong ecosystem that helped in creating a strong pipeline of success stories like Anand and Sahyadri. 

Regarding technology and data, while there is a need to consider how to use data for FPOs, the increasing amount of data also requires greater effort to maintain and analyse. There is a need to figure out how Digital Public Infrastructure (DPI) can be used to support transactions, investments, and incorporate data like soil and weather conditions, the panel felt.

The challenge of data overload and the need for processes to handle it was illustrated with a story about how overwhelming data made traditional marketing approaches historical, with brands becoming surrogates for information.

Published on June 12, 2025