Determinants of agricultural households to join farmer producer organisations (FPOs) in Northeast India: evidence from Sikkim

Abstract

PurposeGovernment of India has launched FPOs to organise small and marginal farmers into farmer collectives called FPOs. These FPOs, through economies of scale, aim to provide better collective strength to farmers for better access to production technology, value-addition services, high-quality inputs and marketing services for improving their incomes. Recently, the government has launched a scheme for creation and promotion of 10,000 more FPOs in the country. Despite potential benefits of FPOs and encouragement from the Government, there are many farmers in India, particularly Sikkim, who do not join the FPOs. This study aims to identify the major determinants that motivate farmers to join FPOs.Design/methodology/approachPrimary data for this study was collected during October, 2019–February, 2020 from 560 farm households in all four districts of Sikkim, India. The study used two-sample t-test and FPO participation probit model for determining the factors influencing a household's decision to participate in an FPO.FindingsThe results of this study illustrate that education, farming experience, farming as the primary occupation, size of landholding, access to Internet, distance to the nearest market, medium level of social participation, extension contact, transportation facility and plan to expand the scale of operation in future are the major explanatory variables that have statistically significant impact on the farm households' participation in FPOs.Research limitations/implicationsThis study was based on a cross-sectional survey. As a result, the findings may be subjected to some limitations though the study made all possible efforts to minimise the limitations.Originality/valueThis paper is based on or a novel data set, collected specifically to examine the determinants of membership in Sikkim, India that has not been studied before. Moreover, this study has identified the importance of information and awareness initiatives among the farmers as responsible for farmers' participation in FPOs. The findings of this study will have important implications and lessons to draw from for the Central Government's effort towards Formation and Promotion of 10,000 new FPOs, especially in the hilly states of India.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-04-2022-0216.