Building members' trust in a producer company through social capital

Abstract

PurposeThe paper contributes to the long-standing interest in studying the relationship of social capital and trust. It examines the relationship between social capital and trust in a producer company and the role of perceived benefits as a mediating variable.Design/methodology/approachA multistage sampling was done to collect data from 395 farmer members from five producer companies spread over three states of India. Through exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) latent constructs were mapped, and composite reliability and construct validity were established. PROCESS macro of Statistical Product and Service Solutions (SPSS) was used to probe relationship between social capital and member's trust and mediation effect of perceived benefit.FindingsThe authors’ research findings establish that the social capital has a positive and significant relationship with members' trust in a producer company and perceived benefit mediates this relationship.Research limitations/implicationsThe paper contributes to reduce complexity of social capital theory by differentiating sources and benefits of social capital. It opens up the avenues of testing theoretically valid mediation effects of many other constructs.Originality/valueThe role of member's perceived benefits as a mediator between social capital and members' trust is a new knowledge to the literature of social capital.

Social Capital, Trust, and Cultivation of Bioenergy Crops: Evidence from Germany and Greece

“…As explained by Wilson, social capital (or trust) includes the benefits or advantages resulting from "one person or group's sense of obligation towards another" [37]. Within this framework, the role of trust is an important driver, a precondition, and an outcome of social capital, and is evident in line of research in (local) development within rural areas [31,40,41,45,46].…”

“…On the other hand, remoteness and the closed character of rural areas were associated with higher levels of social capital [57]. Positing that trust is a precondition and an outcome of social capital, Rivera et al [31] and Chamola et al [46] demonstrated that, in the presence of trust, co-operation among farmers and participation in a producer company is facilitated, is sustainable, and simultaneously positively influences local governance and outcomes in rural areas. Similarly, Ezezika et al [58] report that the successful partnership of agricultural biotechnology in Burkina Faso depended on strong collaboration between research, industry, and farmers, fostered by trust.…”

“…Similarly, Ezezika et al [58] report that the successful partnership of agricultural biotechnology in Burkina Faso depended on strong collaboration between research, industry, and farmers, fostered by trust. The significance of collaboration and networking as a form of social capital is further evidenced in examples such as the reduction of contracting costs and increased efficiency via trustworthy relations in rural agro-enterprises in Colombia [59], on local development among Local Action Groups in Italy (Nardone et al [60]), farmers' innovation adoption in China [61], the sustainability of producers' company in India [46], the de-risking innovation adoption among Ghana coca farmers [62], and even a positive element in interorganizational cooperation [63] and revitalization of farmers' homestead [64]. In contrast, Kasabov [65] turns to issues of trust, mistrust, and trustworthiness among members of Welsh rural cooperatives in order to explain failures in performance.…”

Social capital and performance of farmers' groups in producer organizations in India: examining the mediating role of self-efficacy

“…The fragmentation of land is considered as nonhealthy sign for agricultural production and food security leads to increased production cost, farm inefficiency (Ntihinyurwa and Varies, 2021), and negative growth in net income to farmers (Giller et al, 2021). To overcome various issues related to shrinking lands and small farms, Indian government has started promoting farmers' collectives under a new form, popularly known as farmer producer organization (FPO) (Bikkina et al, 2018;Chamola et al, 2022). In India, FPOs are being mobilized to build their own enterprises which in turn offer farmers to participate effectively in the field production and market activities (Krishna et al, 2018), these collectives have started business under hybrid model of company and cooperative to solve…”

“…To overcome various issues related to shrinking lands and small farms, Indian government has started promoting farmers' collectives under a new form, popularly known as farmer producer organization (FPO) (Bikkina et al. , 2018; Chamola et al. , 2022).…”