A STUDY ON PERFORMANCE OF FARMER PRODUCER ORGANIZATIONS IN KRISHNA DISTRICT OF ANDHRA PRADESH
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Date
2018
Authors
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Journal ISSN
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Publisher
Acharya N.G. Ranga Agricultural University
Abstract
Smallholder agriculture is argued to remain important for economic
development and poverty reduction in developing countries, but its development
is challenged by the need for institutional innovations to overcome market
failures. There is a renewed interest from donors, governments and researchers in
cooperative producer organizations as an institutional vehicle to improve
smallholder agricultural performance, particularly through improved market
participation. Smallholder producers participation in market-oriented production
holds potential for diversifying their incomes and increase agriculture
productivity, hence promoting food security and poverty eradication. With the
numerous farming problems in developing countries, low agricultural productivity
has negative effect on the economic welfare of the rural population. Farmers
organizations have been suggested as a key tool to improve the living conditions
of the resource-poor farmers in developing countries. Farmer groups are important
institutions for the transformation of smallholder farming, increase productivity
and income, thereby reducing poverty.
Farmers Producer Organizations (FPOs) are a legal form of the company
and according to 2002 Act passed in parliament, only farmer – producer can
become member of FPOs. In the Indian context, the role of farmer organizations
is to help smallholder farmers specifically, improve their position in the
emerging value chains. FPO helps the farmers in production, harvesting,
processing, procurement, grading, pooling, handling, marketing, selling and
export of primary produce of the members or import of goods and services for
their benefit. FPO renders technical services, consultancy services, training,
education, research and development for the promotion of the interests of its
members.
Keeping this in view, the present study entitled “A Study on Performance
of Farmer Producer Organizations in Krishna District of Andhra Pradesh” - was
taken with the following objectives.
1. to study the structure, conduct and performance of FPOs in Krishna
District
2. to identify the factors influencing performance of FPOs
3. to analyse the impact of FPOs on farmers’ economy
4. to identify the problems faced by the FPOs and suggest measures to
improve functioning of FPOs
Krishna district has been selected purposively for the research study as it
has more number of functional FPOs in all sectors i.e., 16. Out of 16 Registered
and functional FPOs in the district, two FPOs with maximum membership and
two FPOs with minimum membership were selected purposively. Eighty FPO
member farmers constituting twenty member farmers from each village selling
their produce to the FPOs and forty non – FPO farmers constituting ten non-
FPO members from each village selling their produce in other markets but not in
FPOs were selected for the study. Primary data were collected through personal
interview method from farmers and directors of FPOs. The secondary data on
agro economic features of the district were collected from Chief planning office,
Krishna district. The data regarding FPOs were collected from NGO Nestham
and from Research report of ICRISAT (2016).
The performance of FPOs increased with the increase in the efficiency of
FPO by 12 per cent. Market share which was a measure of profitability showed
that the profitability of FPOs increased by 42 per cent, Equity to assets ratio
(EAR) was 147 which showed that the FPOs were having strong equity base to
sustain their business and improve their performance. If age of FPO was more,
then the experience and external linkages would increase and this increases the
performance by 15 per cent. The heterogeneity in membership increases the
performance of FPO by 1.5 per cent.
The factors that potentially explain the performance of FPO can be
grouped into: (1) Governance and management; (2) Membership commitment;
(3) External linkages; (4) Group composition and (5) Type of FPO. The various
indicators are used for each of these factor groupings. In case of governance and
management registry, known to the political authority and with membership
registry are the variables mostly influencing the FPOs. In case of membership
commitment, financial and land contribution were the factors influencing the
performance. In case of external linkages, asked help was influencing the
performance. In case of group composition, proportion of female in membership
had influenced the performance. In type of FPOs, village level and age of FPO
are variables influencing the performance.
In the analysis of the impact of FPOs on farmer’s economy, the results
indicate that the coefficient of inverse mills ratio insignificant showing that there
was no selection bias. Group membership and market price were positive and
significantly influencing factors on farmer’s economy in all the four selected
FPOs. In case of Sri Vigneswara FPO the other influencing factors on the
farmer’s economy were age, production and labour mandays. In case of both
Chandragudem and Baji Baba FPO the factors which were influencing the
farmer’s economy were production area and share of crop sold. In case of China
Ogirala FPO the factors that showed impact on farmer’s economy was age other
than group membership and market price.
The sample FPOs faced various problems like big fluctuation in market
prices, awareness among the people, competition from other markets, lack of
capital to provide sufficient services, lack of backward and forward linkages,
moving away from FPOs when there is loss, no storage and ware house facility,
poor infrastructure facility and they prioritized competition from other markets
as the major constraint with a score of 0.82 followed by big fluctuations in
market prices (0.81), lack of capital to provide sufficient services (0.72),
awareness among the people (0.66), moving away from FPOs when there is loss
(0.47), lack of backward and forward linkages (0.38), poor infrastructure facility
(0.37) and no storage and ware house facility (0.29).
The various suggestions given for improving the functioning of FPOs are
awareness among the people should be built up with the help of scientists,
Government has to provide financial support, credit and input provision to
farmers, providing storage facilities, business done on commission basis and
reducing the transportation cost. They have given highest priority to
Government has to provide financial support for the efficiency of FPO(0.70)
followed by business done on commission basis(0.66), awareness among the
people should be brought with the help of scientists(0.62), by reducing the
transportation cost (0.58), improving the credit and input provision to
farmers(0.50), by providing the storage facilities(0.48).
Description
D5618
Keywords
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