The FEED report serves as a reality check. It flags cooperatives as the “missing link” for marginal farmers under the new policy, warning that uneven outreach and governance gaps could undermine national goals.
As India wraps up the International Year of Cooperatives with ambitious government reforms under the banner of “Sahkar se Samriddhi” (Prosperity through Cooperation), a stark reality emerges for the country’s most vulnerable farmers: only one in four marginal farmers is actively linked to agricultural cooperatives, according to a groundbreaking report released in December.
The “State of Marginal Farmers in India 2025,” published by the Forum of Enterprises for Equitable Development (FEED) and launched on Kisan Diwas (December 23), paints a sobering picture. Marginal farmers – those cultivating less than one hectare of land – form the backbone of Indian agriculture, comprising 60-70 per cent of the nation’s farming households. Yet, despite the vast cooperative network spanning over 8.5 lakh societies and nearly 30 crore members, less than 25 per cent of these smallholders are active participants.
The report, based on surveys across six diverse states – Andhra Pradesh, Bihar, Himachal Pradesh, Maharashtra, Tripura, and Uttarakhand – highlights sharp regional disparities. Awareness of Primary Agricultural Credit Societies (PACS), the grassroots-level cooperatives, is highest in Andhra Pradesh at 86.2 per cent, but plummets to a mere 2.3 per cent in Tripura. Participation is particularly low in Bihar, Tripura, and Himachal Pradesh, where structural barriers keep marginal farmers on the sidelines.
“Primary Agricultural Credit Societies occupy a strategic position in shaping farmers’ interaction with formal institutions and state-led agricultural interventions,” the report notes. PACS provide essential services like credit, inputs, procurement, marketing, and even digital access. However, obstacles such as complex membership procedures, long distances to society offices, limited capital, and social exclusion – often along caste and gender lines – push many marginal farmers toward informal moneylenders and markets, exacerbating their vulnerability to climate shocks and price fluctuations.
Scaling the Success
Where cooperatives do reach these farmers, the impact is transformative. Among linked marginal farmers, 45 per cent reported increased household income, compared to just 21 per cent experiencing stagnation or decline among non-members. Nearly 49 per cent noted improved livelihood security, 67 per cent gained better access to credit and financial services, and 42 per cent saw enhancements in crop yields. States with multifunctional PACS – acting as one-stop rural hubs for inputs, procurement, and public services – showed the strongest outcomes.
Yet, challenges persist in scaling this success. Digital adoption remains superficial and uneven: in Tripura, 77.8 per cent of cooperatives reported no use of digital tools, while in Bihar, the figure was 25 per cent. Women and older farmers face the steepest skill gaps, limiting transformational benefits.
Gender disparities are equally glaring. Nationwide, over 21 lakh women are registered cooperative members, but only 3,355 hold director positions on boards. Restrictive social norms, limited mobility, and unpaid care burdens hinder women’s leadership, even in regions where they drive much of the agricultural labour.
Dr. Sanjeev Chopra, FEED Chairperson, emphasised that cooperative effectiveness hinges on accessibility, transparency, and inclusivity. “While the New Cooperative Policy 2025 presents an ambitious vision, its success will depend on effective convergence across government schemes and stronger collaboration with Farmer Producer Organisations,” he said.
The report’s timing coincides with a surge in government efforts to revitalize cooperatives. In 2025, marked by the United Nations as the International Year of Cooperatives, the Ministry of Cooperation – established in 2021 – rolled out over 55 initiatives under Prime Minister Narendra Modi’s “Sahkar se Samriddhi” vision. The National Cooperative Policy 2025, launched mid-year, aims to modernize cooperatives as technology-enabled enterprises central to agri-food transformation and inclusive growth.
2025 a Turning Point
Key achievements include the National Cooperative Database portal, cataloguing over 8.4 lakh societies for better planning; diversification of PACS into multi-service centres like PM Kisan Samriddhi Kendras and Jan Aushadhi outlets; White Revolution 2.0 targeting 50 per cent milk production growth; and the establishment of Tribhuvan Sahkari University, India’s first national cooperative university. New ventures extended cooperatives into urban sectors, such as Bharat Taxi for gig workers and plans for cooperative insurance services.
India’s cooperative ecosystem already boasts impressive scale: societies contribute 31 per cent of national sugar production, 25 per cent of fertilizers, and manage 35 per cent of distribution. PACS alone have 13 crore members and procure 20 per cent of paddy and 13 per cent of wheat. Cooperative banks hold trillions in deposits, anchoring rural financial inclusion.
Analysts hail 2025 as a turning point, with digital tools like UPI payments and online systems adopted by thousands of societies. Capacity-building programs and model bye-laws have streamlined operations, while new multipurpose societies – over 18,000 registered by early 2025 – expand into dairy, fisheries, and village-level services.
However, the FEED report serves as a reality check. It flags cooperatives as the “missing link” for marginal farmers under the new policy, warning that uneven outreach and governance gaps could undermine national goals. Strengthening PACS as inclusive, digitally empowered hubs – while addressing gender and digital divides – is crucial for translating policy ambition into rural prosperity.
As India eyes Viksit Bharat by 2047, experts call for targeted reforms: simplified membership, proximity enhancements, sustained digital training, and genuine gender inclusion. “Cooperatives deliver strongest outcomes as multi-service platforms,” the report concludes. It says that bridging the gap for marginal farmers could unlock resilience, income growth, and equitable transformation for the agrarian majority.
