Over 1,100 farmer producer organisations (FPOs), of the total 10,000 launched under the Centre’s special incentive scheme, have succeeded in crossing a business turnover of INR 1 crore
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NEW DELHI — Over 1,100 farmer producer organisations (FPOs), of the total 10,000 launched under the Centre’s special incentive scheme, have succeeded in crossing a business turnover of INR 1 crore, according to figures compiled by the Ministry of Agriculture and Farmers Welfare.
The number of farmers on board the FPO scheme has surpassed the 30 lakh mark, with around 40 per cent of them being women. These FPOs are now conducting business worth thousands of crores in the agricultural sector, a senior official said.
FPOs aim to increase farmers' income and provide small farmers with direct access to significant market benefits, bargaining power and improving market access.
Under this scheme, launched by Prime Minister Narendra Modi on February 29, 2020, there is a provision for handholding support for a period of five years to each new FPO that is formed, and financial assistance to the tune of INR 18 lakhs to each FPO for meeting management cost for 3 years.
Additionally, matching equity grant up to INR 2,000 per farmer member of FPO with a limit of INR 15 lakh per FPO and a credit guarantee facility up to INR 2 crore of project loan per FPO from eligible lending institutions to ensure institutional credit accessibility to FPOs is also extended under the scheme.
The scheme was launched with a budget outlay of INR 6,865 crore till 2027-28. Since the launch of the scheme, INR 254.4 crore in equity grants has been released to 4,761 FPOs and credit guarantee cover worth INR 453 crore has been issued to 1,900 FPOs.
Farmer Producer Organisation (FPO) are registered entities formed for the purpose of leveraging collectives through economies of scale in production and marketing of agricultural and allied sector.
The concept behind Farmer Producer Organisations is that farmers, who are the producers of agricultural products, can form groups. To facilitate this process, the Small Farmers’ Agribusiness Consortium (SFAC) was mandated by Department of Agriculture and Cooperation, Ministry of Agriculture, to support the state governments in the formation of FPOs.
The “Formation and Promotion of 10,000 Farmer Producer Organisations (FPOs)” scheme was launched with the main focus on leveraging economies of scale in production and marketing with a view to enhance productivity through efficient, cost effective and sustainable resource use for ensuring sustainable income-oriented farming, thus helping in reduction of cost of farm production and increase in farmers’ income.
The official pointed out that other ministries have also joined the effort to boost farmers’ incomes through FPOs. For instance, the Spices Board has launched the “Sustainability in Spice Sector through Progressive, Innovative and Collaborative Interventions for Export Development (SPICED)” scheme for the fiscal year 2025–26 under which financial assistance is offered across the value chain to farmers and farmer producer organisations to enhance the production, quality and export of spices.
The scheme is aimed at increasing the productivity of small and large cardamom, improving the quality of post-harvest processes, and encouraging the production and export of value-added, GI-tagged, and organic spices. It also helps in enabling compliance with global food safety and phytosanitary standards and boosting the capacity of stakeholders across the value chain.