Less than 25 per cent of India’s marginal farmers are active members of agricultural cooperatives, despite making up nearly 60-70 per cent of the country’s agricultural households, according to a new report released by the Forum of Enterprises for Equitable Development (FEED) on Kisan Diwas (December 23).
The report, titled State of Marginal Farmers in India 2025, studied six states — Andhra Pradesh, Bihar, Himachal Pradesh, Maharashtra, Tripura and Uttarakhand — to examine how cooperatives were functioning for farmers at the margins.
It found especially low cooperative participation in Bihar, Tripura and Himachal Pradesh.
Cooperative institutions, specifically Primary Agricultural Credit Societies (PACS), represent the most proximate and institutionalised mechanism through which rural households, particularly small and marginal farmers, access credit, inputs, procurement channels, and increasingly, digital and public services.
“As the lowest tier of the cooperative structure, PACS occupy a strategic position in shaping farmers’ interaction with formal institutions and state-led agricultural interventions,” the report said.
Structural barriers such as complex membership procedures, long distances to PACS, limited availability of capital and persistent social exclusion were the main reasons why marginal farmers’ engagement with the cooperatives remained low.
And because of this, they remained more dependent on informal markets, saw slower income growth, and were more vulnerable to climate and market shocks.
“On Kisan Diwas and in the International Year of Cooperatives, these facts are particularly sobering,” the report noted.
Marginal farmers, defined as cultivators owning less than one hectare of land, form the structural backbone of India’s agrarian economy.
Meanwhile, digital adoption remained limited in Bihar and Tripura, and its impact remained informational rather than transformational, it found. For instance, in Tripura, 77.8 per cent of cooperatives reported not using any digital tools at all, while 25 per cent of cooperatives in Bihar report no digital tool usage, pointing to a significant digital divide.
Further, limited digital skills, especially among women and older farmers, continued to restrict the benefits of digitisation.
Cooperatives continued to be largely male dominated, particularly in leadership and decision-making roles. Although 21.25 lakh (2.125 million) women were registered as cooperative members, only 3,355 women serve as directors on cooperative boards nationwide.
“Barriers such as restrictive social norms, limited mobility, and time burdens linked to unpaid care work highlight a significant disconnect between membership and leadership. Mixed perceptions around gender inclusion show that actual leadership and influence remain concentrated among a relatively small, predominantly male group,” it said.
The report was launched at the Institute of Social Sciences in New Delhi by K K Tripathi, Joint Secretary, Economic Advisory Council to the Prime Minister (EAC-PM), NITI Aayog.
Where marginal farmers were able to access cooperatives, outcomes improved significantly.
Across six states, 45 per cent of cooperative-linked marginal farmers reported an increase in household income, compared to roughly 21 per cent who noted a decline or stagnation.
Also, nearly half (49 per cent) of cooperative members reported improved livelihood security after joining, while about 16 per cent felt their situation remained insecure or highly insecure.
Across all six surveyed states, 67 per cent or two-thirds of cooperative member reported access to credit and financial services through their cooperatives.
The report highlighted the evolving role of PACS, which in several states were moving beyond credit provision to function as rural service hubs.
These PACS support input supply, procurement and marketing, distribution of essential commodities through the Public Distribution System (PDS), and access to digital and other public services. States where PACS operate as integrated service centres tended to show better outcomes for marginal farmers.
For example, 42 per cent marginal farmers linked to cooperatives, reported improvements in crop yields, while 22.5 per cent reported decline.