India’s farm cooperatives seen as key tool for market access, scale and rural resilience
A NAAS paper argues that agricultural cooperatives remain one of India’s most effective tools for helping small farmers gain market access, cut costs and stay competitive in a more technology-driven farm economy.
Agricultural cooperatives remain one of the strongest instruments available to India for improving farmer livelihoods, expanding market access and supporting rural development, according to a paper highlighted by The Economic Times. The study, titled Best Practices in Agricultural Cooperatives in the Global Arena, presents cooperatives as a practical response to the structural disadvantages faced by smallholders.
The paper argues that, despite major gains in food production, millions of small farmers still struggle with limited market access, rising input costs, climate risk and weak bargaining power. As agriculture becomes more technology-driven and tightly linked to formal markets, cooperatives can help producers act collectively instead of entering the market as fragmented individual sellers.
That message is especially relevant in India, where nearly 90 percent of farm households are smallholders. The article notes that the country has more than 800,000 cooperatives serving over 300 million members across agriculture, dairy, fertilisers, finance, storage, marketing and processing. M.L. Jat, Director General of ICAR and President of NAAS, said this network has long supported input supply, procurement, processing, storage, credit and farm marketing.
The paper cites Amul and IFFCO as two of the clearest success stories. Amul, founded in 1946, links about 3.6 million milk producers through nearly 18,000 village cooperatives and built its position through transparent pricing, timely payments, professional management and strong branding. IFFCO has meanwhile become one of the world’s largest farmer-owned fertiliser cooperatives, serving more than 50 million farmers.
Researchers say the importance of cooperatives is increasing as agriculture faces technological disruption, climate stress and deeper market integration. They point to government efforts under the Ministry of Cooperation and the National Cooperative Policy 2025, including plans to turn PACS into multi-service institutions, strengthen governance through digitisation and professional management, and widen the participation of women and young people.
The paper also looks ahead to a more digital cooperative model. It argues that AI, blockchain, IoT and digital finance can make cooperatives more efficient, transparent and market-oriented. It further recommends more focus on value addition, branding, direct market access, carbon-credit initiatives and inter-cooperative collaboration so that small farmers can compete more effectively and capture a greater share of rural value chains.