Comprehensive Evaluation of Functional and Financial Performance: A Study on Selected Farmer Producer Organizations (FPOs) in Tamil Nadu, India

Abstract

Aim: This study conducts a meticulous evaluation of the functional and financial performances of Farmer Producer Organizations (FPOs) in Tamil Nadu, unveiling insights into their functional dynamics and assessing their economic sustainability Research Gap: In the limited literature on FPOs, the focus predominantly revolves around income and turnover metrics. This highlights a notable absence of comprehensive evaluation methods, emphasizing the need for thorough assessments of FPO performance. Additionally, there is a scarcity of studies specifically addressing the financial performance of selected FPOs in distinct regions. Study Location: The study is geographically focused on Tamil Nadu, with a specific emphasis on Farmer Producer Organizations specializing in millet and oilseed. Sample Size: The study encompasses thirty FPOs, with 15 focusing on millet and another 15 specializing in oilseed. Data Collection: A meticulous process, including stakeholder discussions and quantitative analyses, was employed to create a performance rating tool for FPOs. Adapted from GIZ India's 2020 tool for functional measures, this approach ensures standardized scoring. Data Analysis: Ratio analysis was employed to analyze the financial performance of the selected FPOs. Conclusion: FPOs in millet and oilseed clusters received positive scores due to strong governance, compliance, member engagement and efficient operations. Most millet-based FPOs have healthy short-term finances, but three face liquidity issues. Similarly, in the oilseed cluster, most FPOs fare well in the short term, except for one with liquidity concerns. To ensure sustainability, strategies should focus on financial ratio optimization, debt management and improving profit margins and Earnings per share.