Does participation in farmer-producer companies enhance farm income? Evidence from Assam

Abstract

This study investigates if participation in Farmer Producer Companies (FPCs) increases farm income amongst agricultural households in Assam, India. It evaluates the effectiveness of institutional participation in improving farm profitability and identifies the key determinants influencing income variation. Using primary cross-sectional data from 404 farm households, the study employs descriptive comparisons and multivariate regression analysis to assess the role of FPC participation. Farm income per unit of landholding is measured using three complementary indicators – Gross Value Added per hectare (GVAH), Farm Business Income per hectare (FBIH), and Gross Profit from Farming per hectare (GPFH) – capturing different dimensions of farm profitability. Whilst FPC-member farmers report higher average income, the differences become statistically insignificant after controlling for farm, household and locational factors. Cropping intensity and irrigation significantly influence income, whilst regional and social disparities persist. Disaggregated results show positive relationship for banana and fishery but weaker outcomes for potato due to inadequate postharvest infrastructure. Field evidence indicates that these effects operate through improved input access, reduced transaction costs and better price realisation through collective marketing. The use of cross-sectional data limits causal interpretation; future research using longitudinal or quasi-experimental approaches is recommended. Strengthening FPCs can promote collective empowerment, income equity and rural economic resilience, contributing to inclusive agricultural development. This study integrates multiple income indicators with crop-specific analysis to provide a nuanced assessment of FPC's role in smallholder agriculture.