Assessing social capital and its impact on economic performance: A comparative study of members and non-members of farmer producer companies in India

  • 182 Views
  • 39 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

Farmer producer companies (FPCs), modern farmer collectives registered under India’s Companies Act, play a crucial role in providing core services like input supply, marketing, technical, and financial support, as well as auxiliary services such as social capital and consultancy, which are linked to higher economic performance and innovation. The study analyzes the levels of social capital among members and non-members of FPCs and their relationship to the economic performance of their members. The data on social capital were collected from 20 FPCs (292 members and 77 non-members) from Maharashtra state of India. Unpaired student T-tests and Mann-Whitney tests were performed to compare the levels of social capital among the members and non-members. OLS regression was performed to understand the difference in social capital and its effect on economic performance. The results reveal that all the indicators of social capital were significantly higher for the members (Mean = 4.27) than for non-members (Mean = 3.14). The social capital indicators related to membership and participation in groups (p-value < 0.10) and the sharing of production and other information (p-value < 0.01) positively affected economic performance. Higher levels of education (p-value < 0.05) and frequent contact with members (p-value < 0.01) positively affected, whereas higher landholding (p-value < 0.10) and years of membership (p-value < 0.01) negatively affected the economic performance of members. As the Indian government plans to add 10,000 FPCs in the next three years, the strategy to increase the social capital of FPCs may enhance the overall resilience and sustainability of rural economies.

view full abstract hide full abstract
    • Figure 1. Composition of social capital amongst members and non-members
    • Table 1. Variable definition and measurement
    • Table 2. Normality tests
    • Table 3. Results of unpaired students’ t-test
    • Table 4. Mann-Whitney U Test
    • Table 5. Descriptive statistics of variables
    • Table 6. OLS regression
    • Conceptualization
      Sushant Malik, Dilip Kajale
    • Data curation
      Sushant Malik, Dilip Kajale
    • Formal Analysis
      Sushant Malik
    • Investigation
      Sushant Malik, Dilip Kajale
    • Methodology
      Sushant Malik, Dilip Kajale
    • Project administration
      Sushant Malik, Dilip Kajale
    • Resources
      Sushant Malik, Dilip Kajale
    • Software
      Sushant Malik
    • Validation
      Sushant Malik, Dilip Kajale
    • Visualization
      Sushant Malik, Dilip Kajale
    • Writing – original draft
      Sushant Malik
    • Supervision
      Dilip Kajale
    • Writing – review & editing
      Dilip Kajale