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G. SUNEESHA, I. BHAVANI DEVI, Y. PRABHAVATHI AND P. LAVANYAKUMARI
Institute of Agribusiness Management, S.V Agricultural College, ANGRAU, Tirupati 517502, Chittoor Dt.
Andhra Pradesh
Kurnool district was selected for present study as the district is having nine actively functioning FPOs (six under NABARD and three under SFAC). The average size of the farm was 2.37 ha on Farmer producer organisation (FPO) and 2.6 ha on non-FPO farms. Total human labour was 104.38 and 100.4 man days per hectare on groundnut FPO farms and non-FPO farms respectively. On an average the total cost of cultivation per hectare of groundnut was Rs. 58,412 on FPO and Rs. 57,526 on non- FPO farms. The gross income realized on FPO farms was slightly higher with Rs. 78,804 as against Rs. 74,030 on non-FPO farms.
KEY WORDS: FPO, NABARD, SFAC
Agriculture has been and remains an important sector of Indian economy. Agriculture and allied activities support livelihoods of nearly 70 per cent of India’s rural population. Agriculture, along with fisheries and forestry, is one of the largest contributors to the Gross Domestic Product (GDP). As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) was
17.3 per cent of the Gross Value Added (GVA) during 2016-17 at 2011-12 prices.
Cooperatives concept is one of the options avail- able for the farmers to get organized themselves to move up in the value-chain and having business ownership. But an analysis on the performance of cooperative system in the country concluded that they have been infected by political interference, corruption, elite capture, poor effi- ciency, loss-making ways and declining government sup- port (capital constraint) (Singh, 2008). The challenges faced by the small and marginal farmers are being attempted to solve through the concept of farmer producer organisations that empowers them by economies of scale and access toinformation, agricultural services, technology etc. A va- riety of approaches has emerged in response to the prob-
lems faced bythe small and marginal farmers.
*Corresponding author, E-mail: iabm.angrau@gmail.com
At the market end of agriculture value-chain,private par- ticipation is being promoted through contract farming, par- ticularly afterthe amendment of the Agricultural Produce Marketing Committee (APMC) Act in 2003. Contract farming involves agricultural production based on an agreementbetween a corporation and the farmer for pro- duction and supply of agreedquantities of a product meet- ing certain quality standards (FAO, 2014). However, con- tract farming arrangements tend to exclude small produc- ers (Gill, 2004; Pritchard and Connell, 2011) and in many instances have benefited the buyers at the expense of the producers. The other approach is the facilitation of col- lective action by small and marginal farmers. Agricultural cooperatives, formed under the Co-operative Credit So- cieties Act, 1904, have long been the dominant form of farmer collectives; however, the experience with coop- erative point too many limitations that prevent effective collective action. Hence the Indian government has been promoting a new form of collectives called Farmer Pro- ducer Organizations (FPOs) to address the challenges, faced by the small and marginal farmers, particularly those to do with enhanced access to investments, technological advancements, and efficient inputs and markets (Hellin et al., 2009;
The present study was conducted in Andhra Pradesh state. Purposive-cum-random sampling technique
was employed for the selection of sample in the present study. Kurnool district was purposively selected, as the district is having nine actively functioning FPOs (six under NABARD and three under SFAC).
The list of the mandals along with corresponding number of FPO farmers was prepared. One mandal from the district with maximum number of FPO farmers was selected purposively. The selected FPO was found covering four villages in Dhonemandal. Hence all the four villages in the mandal were purposively selected for present study. The total sample size was 80. All the FPO farmers in selected villages were listed out and 40 farmers were randomly selected. Another sample of 40 non-FPO farmers from the same villages were also randomly selected to serve as a control group.The required data for the study were collected from the selected farmersusing
a pre-tested schedule for the agricultural year 2016-17.
Simple arithmetic averages and percentages were worked out to arrive at costs, returns and farm efficiency measures.
Cost A1: It includes: Value of hired human labour, value of hired and owned animal labour, value of hired and owned machine labour, value of seed (both farm seed and purchased), value of manures (owned and purchased) and fertilizers, depreciation on fixed assets, irrigation charges, land revenue, interest on working capital and miscellaneous expenses.
Farm business income = Gross income – Cost A1 Family labour income = Gross income – Cost B2 Net income = Gross income – Cost C3
Farm investment income = Farm business income – imputed value of family labour
or
Net income + imputed renta value of owned land + inter- est on owned fixed capital invested.
It is observed from Table.1, that the average family size was 4.79 and 4.13 in the case of FPO and non-FPO farmers respectively. The number of males, females and children was larger on FPOs compared to non-FPOs. On an average 1.45 male members were available for farm work on FPO, whereas it was 1.12 on non-FPO. The number of females participating on the farm was 1.0 on FPO farms, whereas, it was 0.9 on non- FPO. There was no participation of children on the farms.
Total cost of cultivation per hectare of groundnut was Rs. 58142 on FPOs and Rs. 57526 on non-FPO farms (Table.2). The break-up of total costs into operational costs and fixed costs indicated that the operational costs were Rs.43612 for FPO farmers and Rs.42910 on non-FPO farms. The break-up of total costs into operational costs and fixed costs indicated that the operational costs were Rs. 43612 (75 per cent) for FPO farmers and Rs.42910
Cost A : Cost A
+ rent paid for leased in land.
(74.5 per cent) for non-FPO farmers, while the fixed costs
2 1 were Rs. 14530 (25 per cent) and Rs. 14616 (25 per cent)
Cost B1: Cost A1+ interest of fixed capital (excluding land)
Cost B2: Cost B1 + rental value of owned land + rent for leased in land.
for the corresponding farms.Human labour is required to perform various cultural practices viz., land preparation, sowing, application of manures and fertilizers and plant protection chemicals, weeding, harvesting and stripping.
Cost C1: Cost B1 Cost C2: Cost B2
+ imputed value of family labour.
+ imputed value of family labour.
Of the total costs, human labour was the highest costing input service in the cultivation of groundnut. The expenditure incurred towards this resource service was Rs. 16250 (26 per cent) for FPO farmers and Rs.15380
Cost C : Cost C + 10 per cent of cost C
as management
(27 per cent) for non-FPO farmers.The FPO farms used
3 2
cost.
2
hired bullock labour with an expenditure of Rs. 4,175
(7.1 percent) whereas for non-FPO farms it was Rs. 3,094(5.3 percent). Of the total costs the expenditure on
machine power in the cultivation of groundnut was Rs. 3,098 (5.3per cent) on FPO farms and Rs.1,447 (2.5 per cent) on non-FPO farms. Seed was the major item in cost of the cultivation of selected enterprise amounting to Rs.8,700 (15 per cent) for FPO farmers and Rs. 10,750 (19 per cent) for non-FPO farmers. The cost of seed for FPO farmers was less when compared to non-FPO farmers. This is because the seed obtained by FPO farmers was at the subsidized price. On manures and fertilizers the FPO farmers incurred Rs. 4,771 (8 per cent) while for non-FPO farmers it was Rs. 5,284 (10 per cent). The non-FPO farmers incurred little more expenditure on plant protection chemicals with Rs. 3,476 (6.5 per cent) over FPO farmers Rs. 3,285 (6 per cent). Among the fixed costs, rental value of owned land was the major item. It was Rs. 12,500 accounting for 21.5 and 22 per cent in FPOs and non-FPOs respectively. . The other items of fixed costs were land revenue, depreciation and interest on fixed capital. The analysis of cost structure of groundnut cultivation revealed that it was more for FPO farmers over non-FPO farmers. The difference was evidently due to the higher use of human labour and machine labour.
It is clear that from Table.3 there was no leasing in activity among the selected farmers and hence the cost A1 and cost A2 were the same. On an average, the total cost of cultivation (Cost C2) was more or less same on FPOs and non-FPO farms with Rs. 58412 and 57526 respectively
The details of physical output and gross returns per hectare of groundnut crop are presented in Table 4. On an average, the yield of main product was 17.58 and
16.9 quintals, while the yield of by-product was 2.35 and
2.14 cart loads on FPOs and non-FPO farms respectively. The FPO and non-FPO farms realized a gross income of Rs. 78804 and Rs. 74030 respectively. The net income was high on FPO farms with Rs. 20661 compared to Rs. 16503 on non-FPO farms. FPO farms realized higher net income in the cultivation of groundnut in the study area.
It is clear that from Table.5 the gross income realized on FPO farms was slightly higher with Rs.78804 as against Rs.74030 on non-FPO farms. Net income too exhibited similar trend, with FPO recording Rs. 20661 against Rs. 16503 by non-FPO farms. FPO farms were able to secure Rs.1.35 per every rupee spent, while non-
FPO farm received Rs.1.28.Family labour income was
another measure of farm efficiency which represents returns to farmers own labour and family labour. FPO farms derived more family labour income of Rs.23,201 compared to non-FPO farms (Rs.19,203). It was noticed that the FPO farms were efficient in utilization of resources in the cultivation of groundnut. Farm investment income was a measure that indicated returns to fixed capital. It was Rs. 34,164 on FPO farms and Rs. 30,007 on non- FPO farms.
The average size of the farm was 2.37 ha on FPO and 2.6 ha on non-FPO. The per hectare value of assets for FPO farms was Rs. 13,13,069 and the same for non-FPO farms was Rs. 13,35,000. Total human labour was 104.38 and 100.4 man days per hectare on ground- nut FPO farms and non-FPO farms. On an average the total cost of cultivation per hectare of groundnut was Rs.58,142 on FPO and Rs. 57,526 on non-FPO farms. The price per quintal was more on FPO farms with Rs. 4,482 compared to Rs. 4,380 on non-FPO farms. The gross income realized on FPO farms was slightly higher with Rs. 78,804 as against Rs. 74,030 on non-FPO farms. Net income too exhibited similar trend, with FPOs.
Table.1 Family composition and family labour contribution on selected farms (in number)
Note: Figures in parentheses indicate percentages to the total
Table.2 C ost of cultivation of grou nd nu t component w ise on FPO and non -FPO farm s (in rupees per ha)
Table 3 Cost concepts in groundnut production on FPO and Non-FPO farms (Rs per ha)
Table 4. Output and returns per hectare of groundnut on FPO and non-FPO farms
(Rs. per ha)
Table 5. Measures of farm income in groundnut production on FPO and non-FPO farms (Rs. per ha)
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