Financial Performance of Farmer Producer Companies of India: A Study from 2013–2014 to 2018–2019. (December 2022)

• Record Type: Journal Article
• Authors: Kakati, Shivam; Roy, Arup
• Is Part Of: International journal of rural management. Volume 18:Number 3(2022)
• Page Start: 410
• Page End: 428
• Publication Date: 2022-12
• Subjects: Farmer producer company -- financial performance -- ratio analysis -- trend analysis -- grey relational analysis; Rural development -- Management -- Periodicals; Rural development projects -- Periodicals; 307.1412
• DOI: 10.1177/09730052211034700
• Languages: English
• ISSNs: 0973-0052

Abstract

The prime objective of the study is to analyse and evaluate the financial performance of the FPCs in India. Financial ratios, trend analysis and grey relational analysis (GRA) were the tools used to achieve this objective. The present study analysed the financial performance of 83 FPCs in India from 2013–2014 to 2018–2019. The liquidity position of the FPCs was found to be above satisfactory levels. The solvency position of the FPCs was found to be improving as they were shifting from debt financing to equity financing. The efficiency and profitability positions of the FPCs were below par. Almost one-third of the FPCs were loss-making in 2018–2019. Using GRA, 'Howrah Agro Producer Company' from West Bengal was found to be the best performing FPC among the select 83 FPCs. The solvency position of the FPCs was found to have a strong positive association with the overall financial performance of the FPCs. The study also proposed financial ratio benchmarks for the FPCs using quartiles. The present study finally proposes to incorporate 'second-class shareholders' into the FPC model. These shareholders would have limited rights and voting power, and they would provide FPCs with capital, marketing channels and managerial support.