Scheme for formation and promotion of 10,000 new Farmer Produce Organizations

NEW DELHI: There is a need to facilitate our farmers with access to improved technology, credit, better input, and more markets to incentivize them to produce a better quality commodity. For this, the Aggregation of small, marginal, and landless farmers into FPOs will help enhance the economic strength & market linkages of farmers for enhancing their income. Keeping this in mind, the Government of India has launched a new Central Sector Scheme titled "Formation and Promotion of 10,000 Farmer Produce Organizations (FPOs)" with a clear strategy and committed resources to form and promote 10,000 new FPOs in the country with a budgetary provision of Rs 6865 crore.

FPOs are to be developed in production clusters, wherein agricultural and horticultural produces are grown/cultivated for leveraging economies of scale and improving market access for members. "One District One Product" cluster to promote specialization and better processing, marketing, branding & export. Further Agriculture value chain organizations forming FPOs and facilitating 60% of market linkages for members produce.

Under this Central Sector Scheme with funding from the Government of India, the formation & Promotion of FPOs is to be done through the implementing Agencies (IAs). Presently 09 Implementing Agencies (IAs) have been finalized for the formation and promotion of FPOs viz. Small Farmers Agri-Business Consortium (SFAC), National Cooperative Development Corporation (NCDC), National Bank for Agriculture and Rural Development (NABARD), National Agricultural Cooperative Marketing Federation of India (NAFED), North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC), Tamil Nadu-Small Farmers Agri-Business Consortium (TN-SFAC), Small Farmers Agri-Business Consortium Haryana (SFACH), Watershed Development Department (WDD)- Karnataka & Foundation for Development of Rural Value Chains (FDRVC)- Ministry of Rural Development (MoRD).

During 2020-21, a total of 2200 FPO produce clusters have been allocated for the formation of FPOs, which also include specialized FPO produce clusters such as100 FPOs for Organic, 100 FPOs for Oilseeds, etc. Of these, 369 FPOs are targeted for formation during the current year for formation in 115 aspirational districts in the country.

NAFED would form the specialized FPOs which should necessarily be forwardly linked to the market, agri-value chain, etc. NAFED will provide market and value chain linkages to the FPOs formed by other Implementing Agencies. NAFED has formed & registered 05 Honey FPOs during the current year in Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar & West Bengal.

FPOs will be provided financial assistance up to Rs 18.00 lakh per FPO for a period of 03 years. In addition to this, provision has been made for matching equity grant uptoRs. 2,000 per farmer member of FPO with a limit of Rs. 15.00 lakh per FPO and a credit guarantee facility up to Rs. 2 crores of project loan per FPO from the eligible lending institution to ensure institutional credit accessibility to FPOs.

Formation & promotion of FPOs is the first step for converting Krishi into Atmanirbhar Krishi. This will enhance cost-effective production and productivity and higher net incomes to the member of the FPO. Also, improve the rural economy and create job opportunities for rural youths in villages themselves. This was the major step towards improving farmers income substantially, stated a press release.

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