Cluster-Based Business Organisations: A Game Changer in Agricultural Value Chain Development

Abstract

Indian agriculture, which is mostly dependent on small and marginal farmers, confronts several difficulties because of its dispersed holdings and restricted access to markets, new technology, and inputs. The organization of farmers through Farmer Producer Organizations (FPOs) has become a revolutionary answer to these limitations. FPOs facilitate collective activity, enhancing the efficiency of production, processing, and marketing. They can be registered under the Companies Act or Cooperative Societies. They guarantee social and economic empowerment, lower production costs, improve market accessibility, and limit post-harvest losses. The "Scheme for Formation and Promotion of 10,000 FPOs" of the Central Government seeks to assist agricultural communities' socioeconomic advancement and sustainable revenue production. This program, which is being carried out by Cluster-Based Business Organizations (CBBOs), stresses a produce-cluster strategy to take advantage of economies of scale. Because they offer technical support, capacity building, and market connections, CBBOs are essential to the establishment of FPOs. At the federal, state, and local levels, efficient implementation is guaranteed by a strong three-tiered monitoring system. Innovative elements including loan guarantees, equity awards, and an integrated platform for efficiency and transparency are also included in the program.