Author(s): Swamy Perumandla
The study aimed to critically evaluate the various dimensions of FPOs in generating benefits for farmers through the regulated commodity market. In particular, the study tried to identify and discuss major challenges in pursuit of farmers' inclusion in the commodity market for policy formulation. It also aimed to propose an inclusive model to help the farmers in price discovery and price risk management through regulated commodity market access. This study used a case study methodology in order to collect comprehensive data and gain a comprehensive understanding of the context and circumstances in which various organizations plan collective action, distribute collective goods, and encourage participation from small and marginal agricultural producers. Both quantitative and qualitative studies predominantly supported the benefit of farmers’ producer’s organization and their presence in the agricultural market value chain. The analysis revealed 5 major benefits and 4 challenges. The benefits classified necessarily add value to farmers’ participation in commodity market through FPOs. Benefit 1) Transaction Cost, 2) Cropping Decision and Diversification 3) Price Discovery 4) Warehouse Facility and Grading 5) Price Risk Management. The major challenges identified and discussed in pursuit of farmers' inclusion in the commodity market for policy formulation were 1) Financial constraints and Management) Warehouse and Grading: 3) Knowledge Constraints and Understanding of Future Markets: 4) Professional and Technology support. Finally, the proposed farmer-to-commodity market model may help the farmers in price discovery and price risk management through regulated commodity market access.