A study on performance of Farmer Producer Organizations (FPOs) in Kalaburagi District of Karnataka

Introduction

Small and marginal farmers play a crucial role in Indian agricultural growth and food security, yet they face significant challenges such as limited resources, poor access to modern technology and weak market linkages. These farmers are illiterate and have a limited understanding of the value of good seeds and other agricultural inputs (Chauhan, 2015) [2] . Individually, these farmers struggle to secure fair prices and are unable to benefit from economies of scale. To address these issues, collective approaches like cooperatives and contract farming were introduced. However, while some sectors like dairy and poultry have seen success, many such initiatives fail due to weak organizational structures and lack of sustainability. To strengthen collective action, the concept of Farmer Producer Organization (FPOs) was introduced following the recommendations of the Y.K. Alagh Committee in 2003 [1] . FPOs are farmer-led, legally registered entities formed to carry out business activities related to agricultural production, processing and marketing. They provide end-to-end support and services including input supply, technical guidance, financial assistance, processing and market access. By aggregating produce and resources, FPOs enhance farmers' bargaining power, reduce transaction costs and improve income opportunities, especially for small and marginal farmers. FPOs combine strengths of cooperative principles with the efficiency of corporate structures, functioning as hybrid organizations. They operate on democratic principles such as "one member, one vote" and ensure transparency and equitable profit distribution. The main objective of the FPOs were to eliminate the middlemen from taking away highest share in marketing channels. Farmers were directly paid according to the prevailing market rates after deducting part of the amount for the reserve fund of FPOs (Deepa et al., 2018) [3] . Their functions extend across financial services, input supply, procurement, processing, marketing, insurance, technical advisory and networking. Institutional support from organizations like NABARD and the Small Farmers Agribusiness Consortium (SFAC) has been instrumental in promoting and strengthening FPOs through funding, capacity building and market linkages (Nalini et al., 2017) [6] . A significant investment in capital infrastructure to create the supply chain, agribusinesses need reliable, continuous, and enough supplies of produce on a regular basis. As a result, agribusinesses are increasingly seeking direct relationships with farmers to get the agricultural products they demand (Murray,2009) [5] . Despite their potential, many FPOs still face challenges in achieving long-term sustainability due to issues like limited managerial capacity, inadequate infrastructure and weak market integration. In India, there are currently 3200 FPOs in operation. The state of Karnataka has 318 FPOs (www.sfacindia.com) that are being promoted by institutions such as NGOs and government departments. The Kalaburagi district has 24 FPOs. However, since these organizations are relatively new, there is a need to assess their performance to evaluate their effectiveness and to develop strategies for improving their impact on farmers' livelihoods. Hence, this paper is aimed to assess the performance of FPOs in the Kalaburagi district.

Methodology

The present investigation was carried out in Kalaburagi district of Karnataka state during 2020-2021. Ex-post facto research or after-the-fact research, which is a type of research design where the study begins after the events or conditions have already occurred, without any manipulation or intervention by researcher, was employed. Because this research design is a nonexperimental approach used to explore possible cause-and-effect relationships by analysing existing conditions. Kalaburagi district was purposively selected as it is one of the front running districts in the FPO program in Karnataka. To measure the performance of the FPO, the procedure followed was developed by NABARD (National Bank for Agriculture and Rural Development) with suitable modification, consultation with experts, POPIs (Producers Organizations Promoting Institutions) of the FPOs promoters and previous studies on FPO. This procedure consisted of 25 performance indicators. Under each criterion, members of the groups were asked to indicate the level of performance of their group. Some of the indicators were assessed by looking into the different records maintained by the organization. Under each indicator four related statements were framed and scoring was assigned to each statement as 0 to 3. The maximum and minimum score that may be obtained by each group was 75 and 0 respectively. Thus, after computing performance score, the FPOs were grouped into low, medium and high-performance categories by taking the mean and half standard deviation as a measure of check.

Performance category

Sl. No. Category

Poor Less than (Mean -½ SD) Less than 36.29 2.

Average Between (Mean ± ½ SD) Between 36.29 -42.03 3.

Better More than (Mean + ½ SD) More than 42.03

Further, the results were analysed using chi-square to find out relationship between the FPOs promoted by NGO and Horticulture department using the formula,

Where, O i -Observed value; E i -Expected value

Results and Discussion Indicator wise performance of FPOs

As observed in the Table 1, there are twenty-five indicators have been considered under the performance. of FPOs each indicator was analyzed using frequency and percentage. Data in table 1 indicate the performance of five FPOs with. respect to the twenty-five indicators viz., rules and regulations for the FPO, credit service, percentage of loan offered to members, internet services, rotation of executive body, conduct of meeting, auditing of accounts of FPO, training programmes organized, 'planning, implementation, monitoring and evaluation programmes', attendance of the members for meeting, insurance service, backward linkage (input supply), training programmes attended, market linkage, dissemination of market information, aggregation and storage of produce/input, primary processing (drying, cleaning and grading), custom hiring service, participation of members in decision making, participation of members in responsibility sharing, book keeping and documentation, sanctioning of loans, loan repayment, attitude of members towards FPO and its activities and team spirit among the group members. Under each indicator four statements were analysed by using frequency and percentage.

Pertaining to the first indicator rules and regulations for the FPO, Cent per cent of the respondents expressed that the rules and regulations of the FPOs exists which being known by all the members and Board of Members and rules and regulations are being followed without any penalties. Under the credit services, it was observed that, almost half (44.00%) of the respondents expressed that the credit services were being provided based on members' decision and their needs, more than 41.60 per cent of the respondents expressed that no credit service is available in the FPO, followed by 14.40 per cent of the respondents expressed that the credit service is demand based. With respect to the third indicator, percentage of loan offered to members as depicted in the Table 1. It was visualized that more. than half (58.40%) of the respondents were found to be experienced that less than twenty-five per cent of the members were offered loan services among their total members of the FPOs and remaining 41.60 per cent of members expressed that no members were being provided with loan services. Regarding the internet services, it was visualized that more. than half (64.80%) of the respondents had expressed that their FPOs were equipped with no internet connection as well as computer along with operating staff. Nearly 21 per cent of the respondents opined that their FPOs were equipped with computer along with operation staff with internet services available all the time and 14.40 per cent of the respondents expressed that their FPOs were possessing computers but they lack with the operating staff.

In terms of the rotation of executive body, it was found that 16.00 per cent of the FPOs were having fixed time period for the rotation of the executive body, almost half (44.80%) of the FPOs were not having certain fixed time period for rotation of executive bodies whereas 39.20 per cent of FPOs were having the executive body rotation only when required.

With respect to the conduct of meeting more. than half of the FPOs (54.40%) were not organizing meetings regularly which means less regular meetings organized, followed by 20.80 per cent of FPOs were having regular conduct of meetings, 17.60 per cent of FPOs were having more irregular meetings and 7.20 per cent of the FPOs were having no fixed date and time for the conduct of meetings. This might be because very less members are involved in the decision. making and responsibility sharing aspects of FPOs.

Regarding auditing of accounts of FPOs, it was found that about 84 per cent of FPOs were getting done their auditing every year, and few (15.20%) FPOs were used to get their auditing done when it is required other than every year. This might be because the FPOs are working under the NGO and Dept. of Horticulture which expects FPOs to maintain their audits yearly and it is necessary for the well-functioning of the FPOs.

Regarding book keeping and documentation, as depicted in the Table 1 it's been visualized that cent per cent of the FPOs have all books are up to date: and correctly maintained and regularly audit has been done. In the context of the training programmes organized, it's been visualized that more than half (59.20%) of the FPOs were found to have conducted more than five training programmes followed by 21.60 per cent of the FPOs had organized three to five training programmes for their members and 19.20 per cent of the FPOs had organized less than three training programmes. This might be because of the fact that the one of the prime roles of FPOs is to organize training programmes for their members with respect to specific technical knowledge, hence the majority of the FPOs are full filing their prime objectives. As concerned to the planning, implementation, monitoring and evaluation programmes, it is visualized that more. than half (65.60%) of the FPOs were irregular in such activities with fifty per cent of the members involved, 23.20 per cent of the FPOs were irregular in such activities with fifty per cent of the members involved, and 11.20 per cent FPO were having zero members involved in such activities. It might be because the majority of members are not involved in official as well as responsibility sharing activities of the FPOs, majority of the prime role of the FPOs are handled by the officials of the FPOs. With respect to the attendance of the members for the meeting, slightly less than half of the FPOs have less than fifty per cent of the members attending for the meeting while 38.40 per cent of FPOs have fifty to seventy-five per; cent of the members attending for the meeting, followed by 18.40 per cent of the FPOs are having 75 to 90 per cent of the member's attendance for the meetings conducted by FPOs. This was probably because of the fact: that majority of the members are less involved in the activities and still FPOs are not fully fledged with all the facilities and majorly working under their sponsoring organizations. Insurance services, cent per cent of the FPOs are not providing any such facilities, it might be because of the; fact that there are other insurance companies which are certainly focused on insurance policies and it was, observed that FPOs don't consider providing insurance services as their prime objectives.

In terms of the backward linkage (input supply), 44.80 per cent and 41.60 per cent of the FPOs were providing best and good quality inputs on /before onset of sowing operations respectively and 13.60 per cent of FPOs are providing average input supply to the. members of the FPOs. This was probably because establishment of the FPOs is to provide inputs to the members at the reasonable and subsidized rates and it is also one of the major roles of the FPOs, hance, keeping strong backward linkages is the basic for good performance of the FPOs. respectively. Yet some FPOs moving forward to gain strong market linkages for all crops to benefit their members.

Regarding dissemination of market information, most (47.20%) of the FPOs were having accurate and timely dissemination of market information, 34.40 per cent of the FPOs were having timely but not accurate and 18.40 per cent of the FPOs were having accurate but not timely dissemination of market information. As majority of the FPOs are having good market linkage, the dissemination of market information is also accurate and timely for majority of the FPOs. With respect to aggregation and storage of produce and inputs, most (44.80%) of the FPOs had poor godown facility, 36.80 per cent of the FPOs were having average level of godown facility to store the produce/inputs and 18.40 per cent of the FPOs were having no godown facility to store the produce. Regarding primary processing units, as depicted in the Table 1, it's been visualized that for most (42.40%) of the FPOs were provided with the average kind of primary processing units for drying cleaning and grading followed by 18.40 and 39.20 per cent of the FPOs were found to be having poor and no primary processing services, respectively. With respect to custom hiring services, it was observed that, more than half (58.40%) of the FPOs were having custom hiring services available, with few equipment available for members, followed by 41.60 Per cent of FPOs are having no custom hiring services for the benefit of members. This might be due to the majority of the FPOs in the study area are functioning under NGO and are not fully established with all the facilities available and FPOs are yet to establish such facilities to be availed in their FPOs.

Taking to the account of the participation of members in decision making, it was observed that less than half of the members (45.60%) responded that the issues were understood by the representatives or the promoters and some members who also influence decision making, 36.80 per cent of the respondents expressed that understanding issues and decision making is limited to the representatives and one or two members and 17.60 per cent of the members responded that there is high dependency on the promoters for the decision making respectively. Participation of members in responsibility sharing, it's been found that less than half (45.60%) of the members had responded that the responsibility was shared among few members of the FPOs, 37.60 per cent of the members responded that some people take the responsibility or depend on the staff or promoters and 16.80 per: cent of the members shared that there is high dependence on promoters or staff members for the responsibility sharing respectively. It was found almost similar results for the both participation of members in decision making and participation of members in responsibility sharing. About sanctioning of loans, it's been found. that more than half (58.40%) of the FPOs have sanctioned less than 50 per cent of the loan to the members, followed by 41.60 per cent of FPOs have no such facility to benefit the members. Regarding loan repayment, out of the FPOs which have provided loan to the members, more. than half (58.40%) of the FPOs have documented that 70 to 90 per cent of the loan repayment has been done by members. Attitude of members towards FPO and its activities, it's been observed that almost half (43.20%) of the FPOs were found to be having 75 to 90 per cent of the respondents expressing favourable attitude towards activities of FPOs, followed by 30.40 per cent of the FPOs were found to be having more than 90 per cent of the members expressing favourable attitude, while 26.40 per cent of FPOs were found to be having 50 to 75 per cent of the respondents expressing favourable attitude towards activities of FPOs. Team spirit among the group members, most (43.20%) of the respondents found to be having good level of team sprit among them, 38.40 per cent of members were found to be having average level of team spirit among the members and 9.60 and 8.80 per cent of the members were found to be having poor as well as excellent team spirit among the group members respectively. This might be because majority. of the respondents were found to be having favourable attitude towards activities of FPO and majority of the members were found to be having. medium level of perception. towards the functioning of FPOs.

Overall performance of Farmer Producer Organizations

It is clearly observed. from the Table 2, that 47.20 per cent of the FPOs were having average level of performance, 27.20 per cent of FPOs were having better level of performance and about one fourth (25.60%) of the FPOs were found to be having poor level of performance respectively. The probable reason for this might be that most of the FPOs are good at their prime objectives like input supply, market linkages, dissemination of market information, providing custom hiring services, maintaining rules and regulations, auditing of accounts, conduct of meetings and organizing training programmes these have added in performance of the FPOs in having average and better level of performance. Some of the FPOs were found to be having poor level of performance since, some of the FPOs are not fully equipped with all the required facilities such as custom hiring services, credit facilities, insurance services and involvement of members in decision. making and responsibility sharing activities of FPOs. The results obtained are in line with the findings of Eswarappa et al., (1999) [4] .

Difference between NGO promoted FPOs and State Horticulture Department promoted FPOs

The results presented in the table 3 Rules and regulations for the FPO Exists, understood: and followed by all penalties for breaking rules 00 00.00 Exists and understood, by most but not fully followed penalties in some but not all cases 125 100.00 Exists, many members are not aware, no Penalties 00 00.00 Only promoters and staff say that they exist, members do not know them 00 00.00

Conclusion

The results showcased predominantly average performance of FPOs with good input supply, training, auditing and market information dissemination, but there are gaps in credit services, insurance facilities, infrastructure and member participation in decision-making that needs to be improved in FPOs. Apparently study showed that FPOs promoted by NGO performed better than the FPOs promoted by horticulture department, particularly in financial services, market linkages and capacity building activities. Strengthening institutional support, improving member involvement in decision making and enhanced financial and marketing services are essential for the better performance of the FPOs which holds significant potential to improve farmers' livelihoods if operational challenges are addressed effectively.

References

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