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Farmer Producer Organisation (FPO)

A Farmer Producer Organisation (FPO) is a member-owned legal entity — typically a producer company registered under Part IXA of the Companies Act or a registered cooperative — that aggregates small and marginal farmers for collective input procurement, marketing of produce and access to credit and extension services.

Overview

The Central Sector Scheme for Formation and Promotion of 10,000 FPOs was launched by the Prime Minister on 29 February 2020 with an outlay of Rs 6,865 crore till 2027-28, administered by the Department of Agriculture & Farmers Welfare. It is implemented through three lead agencies — the Small Farmers Agribusiness Consortium (SFAC), NABARD and the National Cooperative Development Corporation (NCDC) — supported by Cluster-Based Business Organisations on the ground.

Eligibility

An eligible FPO must be a producer company or cooperative with a defined minimum number of producer-members, governance bye-laws and audited financials, and must be onboarded by an empanelled CBBO. Members must be agriculturists, livestock keepers, fishers or allied-sector producers.

Benefit and structure

The principal financial supports under the scheme are:

  • Equity Grant: matching grant up to Rs 2,000 per producer-member, capped at Rs 15 lakh per FPO
  • Credit Guarantee Fund cover up to Rs 2 crore of project loan per FPO, administered through SFAC
  • Three years of handholding, training and management cost support through CBBOs

Implementation

SFAC, NABARD and NCDC each take responsibility for specific clusters and channel CBBO support, audit and reporting. Once stabilised, FPOs use these supports to bargain better with traders, run input-supply centres, undertake direct marketing on platforms such as Enam Electronic National Agriculture Market, enter contract farming arrangements (Contract Farming) and access infrastructure financing through Nabard Agri Infrastructure Fund.

See also Fpo Farmer Producer Organisation (duplicate entry covering the same scheme), Nabard Agri Infrastructure Fund, Contract Farming, Enam Electronic National Agriculture Market and Primary Agricultural Cooperative Society Pacs.

References

  1. Central Sector Scheme on Formation and Promotion of 10,000 FPOs. Press Information Bureau.
  2. Equity Grant and Credit Guarantee Fund Scheme. Small Farmers Agribusiness Consortium.