Economic Performance, Resource Use Efficiency, and Socio-Economic Impact of Millet Farmer Producer Organizations: Evidence from Tamil Nadu, India

Abstract

Background: Millet-based Farmer Producer Organizations (FPOs) are increasingly promoted as institutional mechanisms to strengthen smallholder livelihoods in semi-arid regions of India; however, rigorous empirical evidence on their economic performance, resource use efficiency, value chain dynamics, and determinants of farmer participation remains limited in the Tamil Nadu context.

 Objective: This study aimed to (i) estimate the cost of cultivation and returns of millet FPO and non-FPO farmers; (ii) analyse resource use efficiency using a Cobb-Douglas production function; (iii) assess the socio-economic impact and value chain of millet FPOs; (iv) identify factors influencing farmers' participation in millet FPOs through binary logistic regression; and (v) rank production and marketing constraints using Garrett's ranking technique.

Methods: Primary data were collected from 120 farmers (60 FPO, 60 non-FPO) across three major millet-producing districts of Tamil Nadu - Virudhunagar, Madurai, and Perambalur using a structured, pre-tested interview schedule during 2024–25. Cost and return analysis, Cobb–Douglas production function, binary logistic regression, and Garrett's ranking technique were employed.

 Results: FPO farmers achieved significantly higher yield (1,151.18 kg/farm; ₹599.74/acre), gross return (₹42,873.28/farm), net return (₹14,546.11/farm), and benefit–cost ratio (1.50) compared to non-FPO farmers (875.00 kg/farm; BCR = 1.08). The Cobb–Douglas model (R² = 0.82) revealed decreasing returns to scale (Σβ = 0.916), with summer ploughing (β = 0.788), sowing operations (β = 0.256), and second weeding (β = 0.238) as the most significant productivity drivers. Logistic regression indicated that farm size, access to institutional credit, and awareness of government schemes were the strongest determinants of FPO participation. Market price fluctuation, high labour cost, and labour scarcity emerged as the top-ranked constraints.

Conclusions: Millet FPOs substantially improve productivity, profitability, and market integration among smallholder farmers; however, sustained policy support on price stabilization, institutional credit, value addition, and labour-saving mechanization is imperative for long-term viability.