Comparative Financial Performance Analysis of Farmer Producer Companies in Eastern Uttar Pradesh

Abstract

"Farmer Producer Companies are emerging as an innovative model to transform agriculture into a profitable business venture by leveraging the collectives of small and marginal farmers through economies of scale with better bargaining power, better value addition facilities, better access to farming technologies, better input supply, and better market accessibility. Financial performance indicates the financial health and resource utilization efficiency of a business organization or a company over a certain period. In the present study, a comparative analysis of balance sheets and income statements was made for five different Farmer Producer Companies of Eastern Uttar Pradesh to identify the pattern of change in various financial components from 2019-20 to 2020-21. Based on the analysis, the important findings were that reserve and surpluses were significantly increased for most of the FPCs for future business expansion, three FPCs reported increased total liabilities, and all of the FPCs managed to grow their total assets compared to the previous year. The revenue growth rate for three FPCs was below par. The performance of the FPCs in respective to net profit after tax was asymmetric. Out of five, only four FPCs were able to meet all the operational expenses from the revenue generated out of business activities and hence, considered profit-making. Moreover, the overall financial performance of the FPCs was disrupted due to the wrath of the Covid-19 pandemic."