Supply chain mapping and value chain analysis of livestock-based Farmer Producer Companies (FPCs) in Himachal Pradesh

Abstract

The current study was conducted to map the supply chain and evaluate the degree of value addition in livestock-based FPCs in Himachal Pradesh, with an emphasis on the milk and fisheries sub-sectors. A total sample of 560 respondents including member farmers, directors and chief executive officers was selected from 80 selected FPCs using a stratified two-stage random selection technique. Marketing cost, marketing margin, price spread, producer's share in consumer's rupee, marketing efficiency and degree of value addition were computed across three identified marketing channels in each sub-sector. The factors impacting farmers' choice of marketing channel were identified using the multinomial logit (MNL) model. With the highest marketing efficiency (7.32), the lowest price spread (₹6.15/litre), and the biggest producer share in the consumer's rupee (87.98%), Channel I (F–FPC–C) was the most effective channel in the milk subsector. The degree of value addition ranged from 10.33 to 10.46 per cent across milk channels. In the fisheries sub-sector, Channel I (F–FPC–C) was similarly the most efficient (marketing efficiency: 8.77), with the lowest price spread (₹20.53/kg) and highest producer share (89.76%). Value addition ranged from 10.13 to 16.20 per cent across fisheries channels. The Multinomial Logit Model (MNL) analysis revealed that cooperative membership and immediate liquidity requirement were the most significant determinants of channel choice in both sub-sectors, while distance to landing centre was a key driver in fisheries marketing. The findings demonstrate that direct FPC-linked marketing channels minimise intermediary costs, maximise producer surplus and offer a replicable model for strengthening livestock-based value chains in hilly regions.