Behavioural Determinants of Functionality of Farmer Producer Organisations in Punjab

Abstract

Small and marginal farming communities of Indian agriculture account for more than 85%of the total farming households. They face the challenges of land fragmentation, high costof inputs and inability to market their produce efficiently. To tackle these challenges, policymakers came up with the model of farmers’ mutual cooperation through Farmer ProducerOrganisations (FPOs). This study conducted in Punjab analyses the behavioural factorsresponsible for functionality of FPOs. A random selection of 150 members from 5 functionaland 5 non-functional FPOs (i.e., 15 respondents from each selected FPO) was made andthe respondents were interviewed personally. The findings revealed that the members(including management) of the functional FPOs had higher risk bearing capacity, greatereconomic motivation and more innovativeness as compared to the respondents from non-functional FPOs. Similarly, respondents from functional FPOs were socially, economicallyand managerially more empowered than the non-functional FPOs. Business skills of themembers, including the managerial members, of functional FPOs were also better ascompared to those from the non-functional FPOs. Regression estimates revealed that thefunctionality, better academic qualification, bigger land holding and joint family systemwere responsible for the higher net annual income of the respondents.