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What is FPO and How it is helpful to Farmers?

FPO stands for Farmer Producer Organizations. FPO is an organization, where the members are farmers itself. Farmers Producers Organization provides end-to-end support and services to the small farmers, and cover technical services, marketing, processing, and others aspects of cultivation inputs.

M Kanika
Farmers working in the field

FPO stands for Farmer Producer Organizations. FPO is an organization, where the members are farmers itself. Farmers Producers Organization provides end-to-end support and services to the small farmers, and cover technical services, marketing, processing, and others aspects of agriculture inputs. 

The idea behind the Farmer Producer Organizations (FPO) was that “Farmers, who are the producers of their agriculture products, can form the groups and can register
themselves under the Indian Companies Act”. 

To facilitate the process, the Small Farmers Agribusiness Consortium (SFAC) was mandated by the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India, to support the State Government in the formation of the Farmer Producer Organizations (FPOs). The goal is to enhance the farmers’ competitiveness and to increase their advantage in emerging the market opportunities. The major operations of Farmers Producer Organization (FPO) include the supply of seed, machinery, market linkages & fertilizer, training, networking, financial and technical advice.  

The main aim of the Farmer Producer Organization is to ensure a better income for the producers through an organization of their own. Small producers do not have the volume individually to get the benefit of economies of scale. In agricultural marketing, there is a chain of intermediaries, who often work non-transparently leading to the situation, where producer receives only a small part of the value, which the ultimate consumer pays. This will be eliminated. Through accumulation, the primary producers can avail the benefit of the economies of scale. Farmers Producers have better bargaining power in the form of bulk buyers of produce and bulk suppliers of inputs. 

Key Points of FPO  

  • Initially, the minimum members in Farmer Producer Organization are 100 in North East & Hilly Areas and 300 in plain areas. 

  • The Farmers Producers Organizations are formed and promoted through the Cluster-Based Business Organizations and engaged at the State or Cluster level by implementing the agencies.

  • Farmer Producer Organization is promoted under “One District One Product” to promote the specialization and better branding, marketing, processing and exports by FPO.

  • The Farmers Producer Organization provide adequate training & handholding and the CBBOs provide the initial training. 

  • Priority is given for the formation of Farmer Producer Organization in aspirational districts with at least one FPO in each block of the aspirational districts.

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