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

Rajiv Gurung (Department of Economics, Sikkim University, Gangtok, India) (Department of Economics, Sri Sathya Sai Institute of Higher Learning, Prasanthi Nilayam Campus, Puttaparthi, India)
Manesh Choubey (Department of Economics, Sikkim University, Gangtok, India)
Runa Rai (Department of Economics, Sikkim University, Gangtok, India)

International Journal of Social Economics

ISSN: 0306-8293

Article publication date: 13 December 2023

Issue publication date: 2 July 2024

298

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. (2024), "Economic impact of farmer producer organisation (FPO) membership: empirical evidence from India", International Journal of Social Economics, Vol. 51 No. 8, pp. 1015-1028. https://doi.org/10.1108/IJSE-06-2023-0451

Publisher

:

Emerald Publishing Limited

Copyright © 2023, Emerald Publishing Limited

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