Rural Producers Collectives in India

Ever since the integration of India’s peasants into global agri-food markets, their livelihoods have become at risk. In this globalized food system where large corporations rule, small-scale farming is not economically viable because global economic rules are against it. For example, the World Bank’s Structural Adjustment Programme (SAP), and the World Trade Organization (WTO) brand of trade liberalization had forced India to open its agricultural markets to foreign agribusiness. Unlike Indian farmers, agribusiness companies receive massive subsidies in Industrial countries like the US. They can produce massive quantities at cheap prices. Trade rules have forced India to allow such agribusiness to sell their cheap produce in India by asking India to lower import duties/tariffs. This dumping of cheap agricultural commodities into Indian markets has pulled down local market prices of agricultural products, and made it difficult for local Indian farmers to compete with rock-bottom prices. While market prices are falling, the cost of inputs is rising. Many agricultural inputs like seeds or fertilizers have become privatized and sold at high prices, which makes it difficult for small farmers to earn profits. These and many other unfair policies have made it difficult for small farmers to survive in globalized markets.

Whether in joint farming, services, or other areas, forming collectives have a number of benefits. Collectives could allow farmers to jointly invest in inputs such as machinery and seeds, to pool and lease land, to build wells and unite in all other efforts to cultivate and market their produce collectively. Cooperatives help farmers buy or sell better due to scale benefits, as well as lower transaction costs for both sellers and buyers. United, producers can more easily arrange technical help in production, processing, or marketing for all of them. (Singh and Singh 2012)

This study booklet aims to provide an overview of producers’ collectives in India, which broadly falls under the cooperative movement. It will also highlight some case studies of successful collective organizations, with a variety of organizational styles and under different laws, mainly to get a taste of the diversity of rural collectives in India.

The paper will start with an introductory section on cooperatives—what cooperative values signify, the difference between top down versus bottom up collective farming models, their brief history, and challenges faced by state controlled cooperatives. After this, we will look at the large cross-section of laws and acts that govern the formation of producers’ collectives in India. We will then move into the so-called new generation cooperatives like Producer Companies and Self Help Groups that have proliferated around the country. Finally, we will look at five case studies. This is followed by a conclusive summary of some key lessons.

Author: Ashlesha Khadse

November 2016

Published by Focus on the Global South

Sponsored by the Rosa Luxembourg Foundation e.V with funds of the Federal Ministry for Economic Cooperation and Development of the Federal Republic of Germany.