Relative Efficiencies of Farmer Producer Companies in India- Slack-Based Model Approach

The concept of the farmer producer company (FPC) model has received a large momentum especially during the 20202021 farmers' protest in India. This paper examines the relative efficiencies of 46 FPCs in Kerala using non-radial data envelopment analysis (DEA) for the financial year 2018-19. We use a non-oriented slack-based model (SBM) under assumptions of constant and variable returns to scale. The results reveal that 36.96 per cent of the sample FPCs are overall technical efficient and 50 per cent of the FPCs are pure technical efficient. It is found that technical inefficiency is reported for a few FPCs due to scale inefficiency. Among the input and output targets suggested for inefficient FPCs, reduction in the ‘number of shareholders' and augmentation of ‘profits' reported in most cases to improve their efficiency scores. Based on the findings, we suggest the concerned stakeholders to provide additional financial and non-financial supports to the needy rather than focusing on establishing new FPCs.