Benefits of Producer Company Registration to Farmers

  • March 28, 2023
  • Registrationwala
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To your surprise, the Ministry of Corporate Affairs has dedicatedly drafted a design for a specialized Company, specifically dealing in the commerce of agricultural produce. Such companies are termed Producer Companies. Mostly, farmers in India subscribe to such a form of Company Registration. There are various benefits of Producer Company Registration which we will later discuss in this article.

The primary reason why a Farmer registers for a Producer Company is that it provides a legal framework to collectively undertake multiple agricultural activities. Let us describe such activities in detail in the following sections.


Scope Farmer’s Producer Company offers to Farmers in India

The Companies Act of 2014 has clearly defined the scope of working of a Producer Company Registration in India. In the following enumerations, we will discuss the range of service provisions of a Producer Company posts its incorporation process.

Activities related to primary produce

A Farmer’s Producer Company can be involved in any of the following activities responsible for the generation of primary produce of the Company’s members or their import of goods/services:

  • Production
  • Harvesting
  • Procurement
  • Grading
  • Pooling
  • Handling
  • Marketing
  • Sales and Distribution
  • Export 

Here, the Farmer’s Producer Company, after its registration process, must carry out the activities as specified in this clause.

Winery Produces from the Farms

The Producer Company can be involved in any of the following activities responsible for the generation of winery products for the Company’s members:

  • Preservation
  • Drying
  • Distillation
  • Brewing
  • Vinting
  • Canning & Packaging 

Manufacturing Procedure

The Producer Company can be involved in any of the following activities responsible for the manufacturing of the primary products for the Company’s members:

  • Manufacture
  • Sale & Supply of Machinery
  • Sale & Supply of Equipment
  • Sale & Supply of Consumables
  • Education in Mutual Assistance principles to Members

Service Training

The Producer Company can also render any of the following services related to the final packaging and delivery of the produces to the masses:

  • Technical Services
  • Consultancy Services
  • Training
  • Research and Development 

Such activities are for the promotion of the interests of the Company’s Members.

Infrastructural Requirements

The Producer Company can be involved in the provision of any of the following services necessary for the produce generation:

  • Power Generation
  • Power Transmission
  • Power Distribution
  • Revitalization of Land & Water Resources
  • Primary Produce conservation
  • Communications related to primary produce
  • Insurance of Primary Produce 

There are many more services which you can opt for to contribute to the production of agricultural produce in India. Now, let us explore why Farmers must opt for the Producer Company incorporation process.


How can Farmers benefit from Producer Company Registration in India?

Since we have detailed the wide scope of service provisions, a Producer Company can undertake after its registration process. Here we will discuss the benefits of registering a Producer Company by a farmer in India.

Access to Government Schemes & Subsidies

Company Registration for Agricultural Producers becomes easy with various government schemes and subsidies. This aids in securing them financially for running business operations. The Farmer here can also raise funds through any of the following instruments from banks and other financial institutions:

  • Equity
  • Deposits
  • Loans

Emboldened bargaining power with Company Registration

Farmers, as a registered Producer Company, can collectively negotiate better prices for their produce. It can be done by pooling their resources as well as negotiating with buyers, furthering better product prices as well as their bargaining power.

Infrastructural Provisions resulting in reduced Production Costs

Setting up a Producer Company can help farmers reduce their transaction costs. The Company can provide access to the following shared infrastructure, such as the following:

  • Storage Facilities
  • Processing Units
  • Transportation Facilities

Access to Bigger Markets

Producer Companies aid farmers in accessing far-reaching markets through their dedicated marketing channels. This will help them sell their produce at better prices, in turn increasing their profits.

Collective Elevated Efficiency of the Company Members

By working as a Producer Company, farmers from different walks of life can share their knowledge, expertise, and resources, helping them in improving the following:

  • Agricultural Practices
  • Increased Productivity
  • Costs Reduction


With those mentioned above and many more, you now have a general idea of the set benefits of Producer Company Registration in India. If you want to know about the Company Registration procedure, contact the Incorporation Experts at Registrationwala.


Also read:  Importance of Dealer Certification in India for Weights and Measures: An Overview

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