Centre May Soon Set-up Rs 6,660 crore Fund for Farmer Producer Organisations

The Centre is planning to set up a-Rs 6,660 crore fund to nurture 10,000 Farmer Producer Organisations also known as FPOs across India over the next 5 years, a promise made by Nirmala Sitharaman, Finance Minister in the budget.

These FPO will help the farmers increase income through better market access as well as collective bargaining power.

A senior Agriculture Ministry officer on condition of anonymity told media that “This will totally be a centrally sponsored programme and we have got the go-ahead from the agriculture minister”. The official added “Now, the proposal is being evaluated by the Department of Expenditure before being sent to the cabinet for approval.”

The agriculture ministry, under this programme will support, fund, train, ensure easy credit availability & provide other support to these FPOs to make them feasible. The Centre will also provide them with technological interventions for improved output & they will be able to have access to shared reasonable resources.

According to the proposal, every FPO must have a minimum of 500 member-farmers on board with Centre having a sizeable equity. The official said, “The main challenge before the FPOs is availability of finance as banks don’t give them loan because of unsecured returns”. He added “With government’s equity, Farmer Producer Organisations will be able to have an easy access to credit supported by sovereign guarantee. This will help the FPOs expand their operations.”

Also FPOs will operate as a business unit & the profit generated will be shared between the member-farmers. Just like a corporate body, the FPOs will also have capacity-building programmes to improve their competitiveness in the market.

Another official said, “We will work closely with the state governments, NABARD & State-run Small Farmers Agri-Business Consortium (SFAC) that has been mandated to provide the FPOs an ecosystem for sustainable as well as viable growth”.