Farmers Producer Organization
The Problem
- marginal small farmers - disadvantaged in bargaining power, low scale etc. They have skill to produce but not to market.
The solution
- FPO (company or coop soc) provides sharing of profits among farmers.
- ownership with farmers, mgmt thru representatives
- ensure better income of farmers thru larger org
- enable member farmers reap benefits of economies of scale in purchase of inputs, processing and marketing their produce
More points
- Small Farmers AgriBusiness consortium (SFAC), National Coop Dev Corp (NCDC) and NABARD promote/ help in establishing FPO
- SFAC running Equity Grant Fund (EGF) under which it is providing equity equal to the amt of shareholders / farmers equity in FPO
- NABARD provides loan to FPO members without any collateral for contribution towards share capital up to Rs. 25k/member. Also provides credit support for business ops of FPO, technical, managerial and financial support for hand holding, capacity buliding and market intervention efforts of FPO.
- SFAC and NABARD provide training to top mgmt of FPO; enable them function efficiently. ICAR providing technical support to FPO thru KVK.
- Minimum number of member requirements. Studies have shown FPO require 700-100 active farmers as members for sustainable ops.
- Income from FPO’s agri activities is treated as agri income and exempt from taxation
- GoI - CG Scheme - Formation and Promotion of 10000 FPO