Farmer Producer Organization (FPO) is a collective of farmers, who produce agricultural goods. The Department of Agriculture & Cooperation, Ministry of Agriculture, Government of India, has authorized the Small Farmers Agribusiness Consortium (SFAC) to assist the state governments in the development of Farmer Producer Organizations (FPOs) of up to a maximum of Rs 18 lakh/FPO or an actual cost, whichever is less, is granted under the initiative for a period of 3 years from the year of establishment.
As a result of starting in the fourth year of existence, the FPO shall handle its financial reports from its own commercial operations. The fee of establishing FPOs under the Companies Act or registering under the Co-operative Societies Act would be reimbursed up to a maximum of Rs 40,000/- or an actual cost, whichever is lower, under this program, with a reminder, if any, paid by each FPO. The equity grant would be in the form of a matching grant of up to Rs 2,000 per farmer of the FPO, subject to a maximum ceiling of Rs 15.00 lakh per FPO.
Eligible Farmers
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FPOs with a minimum farmer member’s size of 300 will be eligible for the scheme, while in northeastern & hilly areas, FPOs with a minimum farmer member’s size of 100 would be eligible.
Estimated Financial Support
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The estimated financial support of Rs 18 lakhs generally includes the salary assistance for its CEO/Manager up to Rs 25000 per month & Accountant up to Rs 10000 per month.
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One–time registration fee of up to Rs 40000 or an actual cost whichever is less, office rent of up to Rs 48000 a year.
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FPO office utility charges of up to RS 12000 per year, a onetime cost for minor equipment, including the furniture items of up to Rs 1, 00,000 subject to the condition that the FPO saves from other heads such as office rent, cleaning, travel, etc. by FPO subject to overall ceiling of support of Rs 18 lakhs per FPO in 3 years.
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A farmer can be a member of many FPOs along with various crop clusters, but he/she will only be eligible for equivalent equity payment once for each FPO in which he/she is a participant.
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In September 2021, the Central Government has approved the formation of 10,000 new FPOs between the year of 2019 to 2022 & 2023 to 2024.
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A total budget of Rs 6,865 crore has been made for the formation & promotion of new FPOs under One District, One Product, the incentive will be given.
