According to the figures given by the Ministry of Agriculture and Farmers Welfare, around 1100 Farmer Producer Organisations (FPOs) that were launched under the Centre’s special incentive scheme have successfully crossed a business turnover of Rs 1 crore. A senior official said that Farmers associated with the FPO scheme have crossed the 30 lakh mark, of which 40% were women. As of now, these FPOs are carrying out business of nearly thousands of crores in the agricultural sector.
Notably, FPOs intend to improve Farmers’ income while offering small farmers access to important market benefits, bargaining power and enhanced market access.
The scheme was launched by Prime Minister Narendra Modi on February 29, 2020, with a budget outlay of Rs 6,865 crore till 2027-28. Not only this, it was launched under the provision of handholding support for five years and providing financial assistance of Rs. 18 lakh for fulfilling the management costs for 3 years. Rs 254.4 crore in equity grants have been released to 4,761 FPOs, and credit guarantee cover worth Rs 453 crore has been issued to 1,900 FPOs till now.
In addition, the scheme provides matching equity grant up to Rs 2,000 per farmer member of FPO with a limit of Rs 15 lakh per FPO. Besides this, 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 is also extended under the scheme.
Farmer Producer Organisations (FPOs) are registered entities formed to direct the collectives through economies of scale in production and marketing of agricultural and allied sectors. The motive of building FPOs deals with forming groups of Farmers, regarded as producers of agricultural products The concept behind Farmer Producer Organisations is that farmers, who are the producers of agricultural products, can form groups. To promote this initiative, the Department of Agriculture and Cooperation, Ministry of Agriculture, mandated the Small Farmers’ Agribusiness Consortium (SFAC) to assist the state governments in the creation of FPOs.