10,000 FPOs Scheme will Bring a Revolutionary Change in Agri Sector: Narendra Tomar

During the inaugural session of the National Conference of Cluster-Based Business Organizations (CBBOs) Union Agriculture Minister Narendra Singh Tomar said that more and more farmers must be part of Farmer Producer Organizations (FPOs).

He said that earlier around 7,000 Farmer Producer Organizations were made but they could not last and a new scheme of FPOs was launched by the Prime Minister with an outlay of Rs. 6865 crore. At a time when the country is observing Azadi ka Amrit Mahotsav, the government is making every effort for the prosperity of farmers.

Kailash Chaudhary, Union Minister of State for Agriculture said that farmers should be enthusiastic about joining FPOs.

At the conference Union Agriculture Minister also launched the logo for the 10,000 FPOs Scheme.

Indian agriculture is dominated by small and marginal farmers with average land holdings size of less than 1.1 ha. These small and marginal farmers constituting more than 86 percent of the total land holdings are facing tremendous challenges both in production and post-production scenarios such as access to production technology, quality inputs at reasonable prices, seed production, custom hiring, value addition, processing, credit, investments & most important markets. 

Thus, collectivization of such producers through the formation of FPOs is very important to address such challenges and enhance their incomes.

Realizing the need to form and promote FPOs across the country, the Government created a dedicated Central Sector Scheme “Formation & Promotion of 10,000 Farmer Producer Organizations (FPOs), and the same was launched by PM Modi on 29 Feb 2020 at Chitrakoot (UP) for implementation.

The scheme is based on the produce cluster approach to enhance production, productivity, market access, promote diversification, value addition, processing and export and also to create agri-based employment opportunities with the aim to economically empower farmers.

The FPOs to be eligible under the scheme for financial benefit and technical handholding must be registered either under the Companies Act, 2013 or States’ Co-operative Societies Act with a minimum number of 300 farmers in plain areas and 100 farmers in hilly and NER. 

Under the scheme, there is a provision for financial help of max Rs.18.00 lakh / FPO for three years as management cost to make them sustainable and economically viable . 

To strengthen the financial base of FPOs and entail them to avail collateral-free loan, there is a provision for matching equity grant of max Rs. 2000/- per member with ceiling of Rs, 15 lakh per FPO and  Credit Guarantee facility upto bankable project loan of Rs. 2.00 crore respectively.

Under the scheme, the CBBOs have been provisioned as the professional agency with a vital role to play as they are to engage themselves all along the value chain starting right from the mobilization of farmers, baseline survey, identification of production clusters, formation of groups, registration and capacity building to the preparation of the business plan, execution thereof with assurance to provide market to the FPOs. They are also to set up cardinal link with Implementing Agencies & FPOs.

Progress so far

• Over 5.87 lakh farmers have been mobilized under the Scheme.

• Around 3 lakh farmers have been registered as shareholders of the FPOs.

• Equity contribution by farmer members amounts to Rs. 36.82 crores.

• Total equity base of the FPOs, including the Equity Grant released, amounts to INR 50 crores.

• 201 women focused FPOs have been registered.

• 481 FPOs registered in tribal districts.

• FPOs have started business transactions:

• 84 FPOs of 14 CBBOs of SFAC have made transactions worth INR 928.28 lakhs

• 12 FPOs of 3 CBBOs of NAFED have made transactions worth INR 48.35 lakhs.

Source - PIB