State of Marginal Farmers in India 2025 Report

• A recent report, “State of Marginal Farmers in India 2025,” highlights the limited integration of marginal farmers into India’s cooperative framework.
• The report was released on Kisan Diwas (December 23) and studied cooperative functioning across six States: Andhra Pradesh, Bihar, Himachal Pradesh, Maharashtra, Tripura, and Uttarakhand.

About Marginal Farmers

• Definition: Marginal farmers, who own less than one hectare of land, form the backbone of India’s agrarian economy and constitute 60-70% of India’s agricultural households.
• For Marginal Farmers, Primary Agricultural Credit Societies (PACS) serve as the lowest and most accessible tier of the cooperative structure.

Key Findings of the Report

• Low Cooperative Coverage: Less than 25% of marginal farmers are active members of agricultural cooperatives.
• Regional Disparities: Particularly low participation observed in Bihar, Tripura and Himachal Pradesh.

Challenges Limiting Cooperative Access

Barriers to Marginal Farmer Inclusion

• Structural Barriers: Complex and exclusionary membership procedures; long distances to PACS; increased transaction costs; and Limited capital availability within cooperatives.
• Social Exclusion: Persistent caste, gender, and class-based exclusion restrict access.
• Economic Consequences: Continued dependence on informal credit and markets. Hence, slower income growth and higher vulnerability to climate and market shocks.

Digital Divide in Cooperatives

• Limited Digital Adoption: In Tripura, 77.8% of cooperatives reported no use of digital tools.
• In Bihar, 25% of cooperatives reported no use of digital platforms.
• Nature of Digitisation: Where present, digital tools remained informational rather than transformational.
• Capability Constraints: Low digital literacy, especially among women and elderly farmers, limits impact.

Gender and Leadership Gaps

• Membership vs. Leadership Divide: Over 2.1 million women are registered as cooperative members, yet only 3,355 serve as directors on cooperative boards nationwide.
• Underlying Factors: Restrictive social norms, limited mobility, and time poverty due to unpaid care work.
• Outcome: Decision-making power remains concentrated among a predominantly male leadership.

Impact Where Access Exists

• Income and Livelihood Outcomes: 45% of cooperative-linked marginal farmers reported increased household income and only around 21% reported stagnation or decline.
• Livelihood Security: 49% of members reported improved livelihood security after joining cooperatives.
• Financial Inclusion: 67% of cooperative members accessed credit and financial services through PACS.
• Productivity Gains: 42% of marginal farmers linked to cooperatives reported improved crop yields.

Way Forward

• Doorstep Cooperatives: Introduce mobile PACS units and satellite service points at the hamlet level to overcome distance barriers, especially in hilly and tribal regions.
• Simplified Entry: Replace multi-layered membership procedures with Aadhaar-linked, time-bound enrolment norms and automatic inclusion of PM-KISAN beneficiaries.
• Capital Rebalancing: Mandate minimum capital allocation for marginal-farmer lending within PACS, backed by NABARD refinancing tied to inclusion outcomes, not loan volumes.
• Women’s Governance Quota: Reserve board-level positions for women members in PACS and link leadership diversity to eligibility for central digitisation and infrastructure grants.
• Service Hub Model: Scale PACS as multi-service rural hubs integrating credit, procurement, PDS, insurance and extension services rather than limiting them to credit delivery.