What drives FPOs towards success: Evidence from Punjab

The current study aims to investigate the challenges the farmers in Punjab encounter as members of an FPO organization registered with NABARD. These limitations include a lack of extension services, a lack of help from funding agency representatives, a lack of knowledge, weak communication links, ensuing intermediary corruption, challenges with trust, and more. The study took place in the state of Punjab during 2020-21. Data were gathered from 263 farmer members and 32 chosen FPOs that are registered with NABARD. The study used a logit regression model to pinpoint the variables affecting Punjabi FPOs’ success or failure. Out of the 67 FPOs in Punjab, the survey indicated that 48% were operational, 28% were closed or non-operational, and 24% were untraceable. The study identified a number of factors that contributed to the collapse of FPOs in Punjab, including loss of business, dissolution of farmer membership, excessive delays in funding in many instances, and switching to another industry due to very low-profit margin, lockdowns, a lack of funding, and other administrative factors. The profitability of FPO was found to be significantly impacted by pricing. Additionally, working officers in that district or area had a significant impact on the success of FPO/FPC.