How sustainable are the farmer producer companies (FPCs) in India?—Unravelling the determinants of farmers’ perceptions through multivariate analyses

Abstract

Agriculture is predominantly driven by smallholder farmers; majority are in Asian countries like China and India. Recognizing the need for commercializing smallholder farms and increasing their revenue, farmer producer companies (FPCs), a subset of farmer producer organizations, have emerged as smallholder farmers’ collectives in India. Present research examined how member‐farmers perceive the sustainability of FPCs and identified key factors influencing it. A random sample of the eight FPCs of varying duration and functions in the eastern Indian state of Bihar, where about 97% of farmers are smallholders, were assessed through an interview schedule survey of 320 member‐farmers in terms of their demographic, economic and socio‐behavioural attributes. Organizational factors, such as functional efficiency, member satisfaction, empowerment and group dynamics of the FPCs, were assessed using Likert‐type scales. Sustainability of the FPCs is indexed based on members’ perceptions on growth, business planning and outlook, management and governance, value and credibility, brand and promotion and collaboration and innovation. Multivariate analyses, including multiple regression and path analysis, revealed that older and more diversified FPCs were perceived as more sustainable, with higher levels of functional efficiency, satisfaction, empowerment and group cohesion. Functional efficiency, member satisfaction and group dynamics had a direct positive impact on sustainability, whereas empowerment and progressive attitudes showed indirect effects. These findings suggest that strengthening internal dynamics and organizational performance of FPCs can enhance their sustainability and make smallholders’ agricultural production system remunerative.