- India
- Mar 18
Formation and promotion of 10,000 FPOs scheme
• The Ministry of Agriculture & Farmers Welfare has achieved the milestone of 10,000 Farmer Producer Organisations (FPOs) across the country.
• This was informed by Minister of State for Agriculture and Farmers Welfare Bhagirath Choudhary in a written reply in Lok Sabha on March 17.
• As many as 1,175 FPOs are registered as 100 per cent women members under the scheme.
Farmer Producer Organisations (FPOs)
• The government of India launched the Central Sector Scheme for ‘Formation and Promotion of 10,000 Farmer Producer Organisations (FPOs)’ on February 29, 2020.
• The scheme has a total budgetary outlay of Rs 6,865 crore.
• The concept behind FPOs is that farmers, who are the producers of agricultural products, can form groups.
• To facilitate this process, the Small Farmers’ Agribusiness Consortium (SFAC) was mandated by Department of Agriculture and Cooperation to support state governments in the formation of Farmer Producer Organisations (FPOs).
• FPOs will be provided financial assistance up to Rs 18 lakh per FPO for a period of three years.
• In addition to this, provision has been made for matching equity grant up to Rs 2,000 per member with a limit of Rs 15 lakh per FPO and a credit guarantee facility up to Rs 2 crore of project loan per FPO from eligible lending institutions to ensure institutional credit accessibility to FPOs.
• Suitable provisions have been made for training and skill development of FPOs.
• Implementing agencies have been approved under the scheme for formation & promotion of FPOs.
• FPOs are to be developed in produce clusters, wherein agricultural and horticultural produces are grown/cultivated for leveraging economies of scale and improving market access for members.
Significance of the scheme
• Nearly 86 per cent of farmers are small and marginal with average land holdings in the country being less than 1.1 hectare.
• These small, marginal and landless farmers face tremendous challenges during agriculture production phase such as for access to technology, quality seed, fertilizers and pesticides including requisite finances.
• They also face tremendous challenges in marketing their produce due to lack of economic strength.
• FPOs help in collectivisation of such small, marginal and landless farmers in order to give them the collective strength to deal with such issues. Members of the FPO will manage their activities together in the organisation to get better access to technology, input, finance and market for faster enhancement of their income.
• FPOs are not just organisations but an unprecedented force to increase farmers' income and provide small farmers with direct access to significant market benefits, bargaining power and improving market access.
• Approximately 30 lakh farmers in the country are connected to FPOs, with around 40 per cent of them being women.
• These FPOs are now conducting business worth thousands of crores in the agricultural sector.
Objectives of the scheme:
• To provide a holistic and broad-based supportive ecosystem to form FPOs to facilitate development of vibrant and sustainable income-oriented farming and for overall socio-economic development and wellbeing of agrarian communities.
• To enhance productivity through efficient, cost-effective and sustainable resource use and realise higher returns through better liquidity and market linkages for their produce and become sustainable through collective action.
• To provide hand-holding and support to new FPOs up to five years from the year of its creation in all aspects of management of FPO, inputs, production, processing and value addition, market linkages, credit linkages and use of technology etc.
• To provide effective capacity building to FPOs to develop agriculture entrepreneurship skills to become economically viable and self-sustaining beyond the period of support from the government.