Are farmer-based organizations still relevant? Evaluating the impact of farmer-group participation on maize productivity in Indonesia

Abstract

Maize production contributes significantly to Indonesia’s economic development, but the sector faces a classic challenge: rising demand and low productivity. Support from a farmer-based organization (FBO), commonly referred to as a farmer group, is a key institutional factor that can enhance productivity. It can, among others, increase farmers’ access to the input and output markets. However, it is also argued that the role of an FBO in agricultural development depends on its capabilities and institutional support. On the empirical front, evidence on the impact of farmer-group membership remains inconclusive. This study examines the causal effect of farmer-group participation on maize productivity in Indonesia using the propensity score matching (PSM) method and dataset from the Indonesian Secondary Food Crops Cultivation Farm Household Survey by Statistics Indonesia. The PSM estimation indicates that farmer group participation increases maize productivity by 0.095 to 0.195 t/ha, equivalent to approximately 2.2–4.4% improvement relative to non-members. It indicates that FBOs remain relevant in agricultural development policy in Indonesia.