Efficiency Analysis of Member and Non-Member Farmers of FPOs Using Data Envelopment Analysis

Abstract

This study evaluates the efficiency levels of member and non-member farmers across different agricultural sectors using Data Envelopment Analysis (DEA). The research compares Technical Efficiency (TE), Allocative Efficiency (AE), Economic Efficiency (EE), Pure Technical Efficiency (PTE), and Scale Efficiency (SE) between the two groups. The findings indicate that FPO member farmers generally exhibit higher efficiency levels, suggesting the advantages of collective action in agricultural productivity. Member farmers achieved an average TE of 87 per cent in agricultural commodity farms compared to 79 per cent for non-members, while in livestock farming, members exhibited a significantly higher TE of 90 per cent against 52 per cent for non-members. Similarly, members in vegetable farms showed an AE of 99.8 per cent, substantially higher than the 60% observed for non-members. The TE distribution also highlighted disparities, with 70 per cent of livestock member farms achieving the highest efficiency range (90-100%), whereas 53 per cent of non-member livestock farms fell below 50 per cent. These results emphasise the efficiency advantages of FPO membership.