International Journal of Farm Sciences 9(2): 12-18, 2019 Analysis of constraints for performance improvement of FPCs in Tamil Nadu B NAVANEETHAM 1 , K MAHENDRAN 2 and SD SIVAKUMAR 1 1 Department of Agricultural and Rural Management 2 Directorate of Agri-Business Development, Tamil Nadu Agricultural University Coimbatore 641003 Tamil Nadu, India Email for correspondence: navaneethamait@gmail.com © Society for Advancement of Human and Nature 2019 Received: 16.11.2018/Accepted: 3.12.2018 ABSTRACT The urge for bringingsmall holders together is to offset the negative effects of increasing urbanization, decreasing land area under cultivation and the other reason being poor resource base of farmers making them unable to operate their farm with limited capital, while agriculture is becoming non-competitive. Therefore to protect the interests of small and marginal farmers the farmer producer companies (FPCs) were included in the special provision of Producer Companies Act 2002. In the present study twenty FPCs were selected purposively for the study based on the highest paid-up and authorized share capital. Focus group discussion (FGD) method was employed in collecting the details of constraints of the selected FPCs where the farmers and administrative members like CEOs and BODs constituted the participants. Altogether 20 FGDs were conducted to cross check/validate the response from the farmers and the survey. The study probed the driving forces in performance of FPCs by employing qualitative tools and also assessed the challenges in the operations of FPCs. The results revealed that the driving factors were potential of branding purchase of machines and assets, scope in value addition, active dissemination of market information, price setting and credit for purchase. The challenges faced by FPCs were: problem in obtaining bank loan, no waiving off of license fee, cumbersome process of registration of FPCs, not able to raise funds from farmers and capturing market for selling the produce which were the major causes for failure of some FPCs in the state. Keywords: Force field; constraints; FPC; performance INTRODUCTION Now and then for years, the only sector whose uncertainties are persisting with no proper consistent solution is agriculture and its business. As most of the farmers in India are small and marginal, coping to the restraining factors is difficult owing to factors like small landholdings, economically weak status, outbreak of pests and diseases, high cost of delivering produce to customers, high agency costs and no reasonable returns from produce. So the imminent need is to bring a new breath of fresh air for the problem and one such initiative brought is farmer producer companies (FPCs). FPCs were established in order to bring up a better market by linking all the stakeholders of agribusiness owing to failure of cooperatives in marketing the agricultural produce. The livelihood of small farmers in India is becoming vulnerable aftermath of privatization and globalization of the economy. The growing foreign investment in agribusiness has been threatening small farmers to cope up with emerging business climate. Due to increased fragmentation larger proportion of farmers with marginal landholdings faces variety of issues pertaining to credit, market access, modern retailing and technology adoption. Therefore the key rationale required is hand holding support for rural farmers by promotion of FPCs that paves way for developing remunerative agriculture for the small farmers and to establish a better market potential in the era of competitiveness by leveraging the benefits of economies of scale. So aggregating small farmers into FPCs provides a pathway for the rural farmers to amplify investment, better negotiate, move up value chains and improve access to technology and markets.