FPO (Farmer Producer Organisation)

A Farmer Producer Organisation (FPO) is a member-owned producer company or cooperative that aggregates small and marginal farmers for collective bargaining on inputs, direct marketing of produce and access to institutional credit. This entry covers the Central Sector Scheme that promotes their formation; see Farmer Producer Organisation Fpo for the parallel detailed entry that should be treated as the canonical record.

Overview

The Central Sector Scheme for Formation and Promotion of 10,000 FPOs was launched on 29 February 2020 with an outlay of Rs 6,865 crore till 2027-28 under the Department of Agriculture & Farmers Welfare. Cluster-Based Business Organisations are the operational arm on the ground, supported by SFAC, NABARD and NCDC.

Eligibility

A new or existing producer company or registered cooperative aggregating small and marginal farmers can apply for inclusion under the scheme through an empanelled Cluster-Based Business Organisation, subject to minimum member-base and governance norms.

Benefit and structure

Matching equity 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
Multi-year handholding for governance, business planning and market linkages

Implementation

The Small Farmers Agribusiness Consortium (SFAC), the National Bank for Agriculture and Rural Development (NABARD) and the National Cooperative Development Corporation (NCDC) are the three implementing agencies, each taking responsibility for assigned clusters. They link FPOs into financing instruments such as the Nabard Agri Infrastructure Fund, buyback arrangements through Contract Farming and electronic markets via Enam Electronic National Agriculture Market.

References

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