Economic impact of farmer producer organisation (FPO) membership: empirical evidence from India

Rajiv Gurung, Manesh Choubey and Runa Rai

International Journal of Social Economics, 2023, vol. 51, issue 8, 1015-1028

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: FPO; Propensity score matching; Sikkim; India; Organic farming; Smallholder (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijsepp:ijse-06-2023-0451

DOI: 10.1108/IJSE-06-2023-0451

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