Input intensive modern agriculture is adversely affecting human health and environment. Farmers of Telangana state have taken up organic chilli production with the assistance of FPOs. Primary data was collected from 120 farmers comprising 60 members and 60 non-members of FPO from two districts of Telangana through semi-structured interviews. The study found that the shift to organic chilli cultivation led to decrease in input use by 9.06% and yield by 23.4%. However, the gross return from organic chilli farming was 13.85% higher over that realised by non-members due to the efforts of FPOs. DEA analysis revealed that a higher proportion of member farmers (48%) had technical efficiency of more than 60% as compared to non-members (18%). FPOs were instrumental in reduction of transaction cost and number of intermediaries leading to the realization of a higher proportion of producerโs share in consumerโs rupee (65%). Discriminant function analysis revealed that the FPO promoting institutions (44%), ease of doing business (16%) and infrastructure facilities like storage, irrigation, electricity and credit have high influence on performance of the states with respect to FPOs
