An Analytical Study on Managerial Competencies and Business Performance of Farmer Producer Organizations (FPOs): A Value Chain Perspective from India

Abstract

Farmer producer organizations (FPOs) act as an effective institutional mechanism in addressing the constraints of small holders in India. But only a very few FPOs are prospering in their life stages, demanding a need for competent managerial team to understand the business dynamics and improve the organization performance. Hence, the present study attempted to understand the relation between business competencies and financial performance of FPOs operating in the state of Andhra Pradesh, India mediated through business approach. A proportionate representative sample of 4 FPOs and 11 FPOs registered under cooperatives act and companies act, respectively, were selected randomly. Primary data from 50 % of managerial team of FPOs ( n = 94) and secondary data from audited financial reports from 2019–2020 to 2021–2022 were obtained. The major findings of the study showed that business competencies and financial performance of market-centric approached FPOs are significantly higher over production-centric FPOs. A strong and significant correlation existed between competencies and performances. Variables namely education, business exposure, leadership role in community-based organizations and digital media exposure showed moderate correlation with various competency spheres. Due to relatively higher level of these factors in the respondents of market-centric approached FPOs over their counterparts, they possessed comparatively higher business competencies and as such identified business opportunities on the upstream value chain (market-centric) and accordingly showed better financial performance over the FPOs that identified opportunities on the downstream value chain (production-centric). Thus, a strong relationship existed between business approach, business competencies and financial performance.