Value addition for better returns

Farmer Producer Organizations have  a vast potential in helping the small and marginal farmers to address their challenges successfully. Building capacities of these organisations in value addition will result in better quality of produce, improve their bargaining power, provide additional employment opportunity and better returns.

The largest group of cultivators in India are primarily marginal and small farmers. Farmers primary challenges are crop failure, monsoon vagaries, lack of access to knowledge and guidance, indebtedness, lack of working capital, making them very vulnerable. Being not organised, they are constantly confronted with inadequate access to inputs and abilities to scale up to leverage markets.

Box 1: Shree Balajee FPC

Shree Balajee Farmers Producer Company Limited is a Farmer Producer Organisation which was started in the year 2019 in the village Murera, Gaya, Bihar. This FPO was initially started as an ATMA group and formerly known as “Shree Balajee Krishi Udaymi Samuh”. It was started with the involvement of only a small number of farmers, about 30 farmers. Later, this FPO set up a custom hiring centre with an initial capital of Rs. 3,20,000.  Following this, they started purchasing various agriculture implements by investing Rs. 10 lakhs and made it operational. During the first year, they got a benefit of Rs. 4 lakhs.  The FPO’ s major hurdle was in expanding the membership. KVK and ATMA groups along with people from the ATMA group helped them. Currently, they are involved in new initiaitives which include lemongrass cultivation,  G-9 bananas and red lady papaya and fisheries. They also started trying out  basmati rice varieties (1121 and 1509) for selling them for better prices to markets in Bengal and Punjab.

Small farmers groups like Farmer Producer Organisations (FPOs) and cooperatives are legal bodies formed by primary producers such as farmers, fishermen, milk producers, weavers, and others. They could be a producer company or a cooperative society which enables sharing of profits/benefits among the members. The primary mission of such POs is to ensure better incomes for the producers enabled by an organization which is their own. They are expected to enhance their incomes, reduce costs of input purchases including transaction costs, create opportunities for employment, involve them in value-addition including processing, distribution and marketing, enhance bargaining power and provide access to formal credit. These FPOs regularly face various issues and challenges in terms of gaining the trust of the members. The members on the other hand do not have clarity about their structure and the choice of FPO to become a member. Curently, the notable mainstream institution offering support is, National Bank for Agricultural and Rural Development (NABARD), which has been supporting the POs by providing financial assistance besides technical and managerial support. Shree Balajee Farmers Producer Company Limited, is depicted as an example in Box 1.

 Some success stories

Value addition has been a proven strategy for many FPOs, to reduce post harvest losses as well as better incomes. There are several examples of such efforts from diverse contexts. These contexts either offer the scale or the niche in terms of homogenous production or unique local product which offers them advantage of organising themselves. More importantly, the member’s capacities have to be improved through capacity building on skills required for processing, value addition.

Some of notable examples from diverse contexts are described below.

Value addition in banana in Meghalaya

The Bolkinggre Women’s Commodity Interest group of Meghalaya is associated with banana farming and cultivation. Banana is enriched with many vitamins and minerals and also a horticultural crop that is widely grown in the Garo hills of Meghalaya. They are the producers of a local variety of banana called Bitaguri (or Nendran). The size of the fruit and its quality to make chips is the main  attraction of this unique banana variety. Now, with the help of the District Commerce and Industry centre, they learnt the technique of making banana chips along with others including pickle making. As a result, their weekly and monthly earnings have increased.

 Value addition in fish and its products – The ATMA group (Sri Renugadevi ATMA group) envisioned enhancing their status of farming and income through a group approach along with value addition. In order to increase their ability both in value addition and post harvest technology, the group organised a training programme with the assistance from the Tamil Nadu Dr Jayalalitha Fisheries University on Fish Processing Technologies to increase the scope of fish processing and production of value-added products (dry products, baked items and fish storable products) along with how to increase marketing strategies.  The group is yet to take up value addition.

 Value addition of mango – The Krishi Vigyan Kendra, Unnao and the district Agriculture Department of Uttar Pradesh helped Smt Taravati by providing technical guidance and support to sustain her agricultural farming in a better way. She later became part of the project on “Empowerment of rural women through value addition of mango fruit”. Thereafter, she started value addition in mango of her farm and prepared pickles and powder and increased her earnings.


Farmer Producer Organizations have  a vast potential in helping the small and marginal farmers to address their challenges successfully. They offer many benefits to the farmers like increased bargaining power, enable better and easy access to inputs. However, capacities of these organisations has to be built through various training programmes. They will help them in getting better quality produce, reduce their post-harvest losses, generate more employment opportunities and help them to get better incomes through value addition. Currently, they are being supported by NABARD and SFAC (Small Farmers Agribusiness Consortium), KVKs, ATMA as well as several NGOs.


  1. Bikkina, N., Turaga, R. M. R., & Bhamoriya, V., Farmer producer organizations as farmer collectives: A case study from India., 2018, Development Policy Review,36(6), 669-687.
  2. Inspiring stories of progressive women farmers., 2020, Ministry of Agriculture & Farmers Welfare Department of Agriculture, Cooperation & Farmers Welfare.
  3. NABARD., Farmer producer organisations., 2015,

Ayyagari Ramlal, Dhandapani Raju, Madhulika Singh, Ajay Kumar and Ambika

Ayyagari Ramlal and Ambika Rajendran

Division of Genetics, ICAR-Indian Agricultural Research Institute (IARI),

Pusa Campus, Delhi – 110012

Corresponding author Email:

Dhandapani Raju

Division of Plant Physiology, ICAR-Indian Agricultural Research Institute (IARI),

Pusa Campus, Delhi – 110012

 Madhulika Singh, and Ajay Kumar

Cereal Systems Initiative for South Asia (CSISA – CIMMYT), Bihar

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