Economic impact of farmer producer organisation (FPO) membership: empirical evidence from India
International Journal of Social Economics
ISSN: 0306-8293
Article publication date: 13 December 2023
Abstract
Purpose
Farmer producer organisations (FPOs) are considered as a strategy to improve the livelihoods of small farmers through economies of scale by providing collective strength to farmers for improved access to production technology, value-addition services, high-quality inputs and marketing services for improving their incomes. This study investigates the impact of FPO membership on organic farming household's income in Northeast India.
Design/methodology/approach
This study uses field survey data collected from all four districts of Sikkim. Primary data were obtained from a survey of 560 organic farming households, 280 of which are FPO members and the rest 280 are non-members. Propensity score matching (PSM) is used to estimate the impact of FPO membership on net returns, return on investment (ROI) and profit margin.
Findings
Results show that the FPO members had, on average, Rs. 7,254–8,133 higher annual net returns, 4.6–4.8% higher ROI and 8–8.4% higher profit margin than the non-members. The findings confirm that FPO membership has a positive and significant impact on net returns, return on investment and profit margin. Also, heterogeneity analysis indicates that FPO membership has larger positive impact on relatively bigger farmers and female-headed households.
Research limitations/implications
As the study was based on a cross-sectional survey, the findings may be subjected to some limitations.
Originality/value
This study is based on a novel data set, collected specifically to examine the economic impact of FPO membership on organic farming in India.
Peer review
The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-06-2023-0451
Keywords
Acknowledgements
The authors acknowledge the financial assistance from UGC, New Delhi in the form of UGC-NET JRF and SRF provided to the first author. The authors are thankful to Mr. Rajesh Gupta, Management Executive at M-CRIL for providing valuable assistance and information during the field survey.
Citation
Gurung, R., Choubey, M. and Rai, R. (2023), "Economic impact of farmer producer organisation (FPO) membership: empirical evidence from India", International Journal of Social Economics, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJSE-06-2023-0451
Publisher
:Emerald Publishing Limited
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