Opportunities in Farmer Producer Organization - FPO Confederation of Indian Industry Ministry of Food Processing Industries Government of India
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Opportunities in
Farmer Producer Organization - FPO
Confederation of Indian Industry
Ministry of Food Processing Industries Government of India
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One of the fastest growing economies in the world
Largest producer of several agri commodities
Second largest consumer market
Significant investments in world-class ports, logistics & supply chain infrastructure
Proactive Government policies
Investor friendly incentives
Highly skilled manpower pool
Concept and Objective
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The concept of Producer Organizations was legally introduced in 2003 by an amendment to the Companies Act 1956 which incorporated a new Part IX-A in the Companies Law.
FPO is a member driven Producer Organization which constitutes of farmers who come together as a collective at state, cluster or village level and register themselves under the Companies Act.
The objective of constituting FPOs is to foster technology penetration, aggregate produce, improve productivity, enable improved access to inputs and services, and increase farmer incomes, thereby strengthening their sustainable agriculture based livelihoods.
An Organization will be called a Farmer Producer Organization, if
o it is formed by a group of primary producers
o it is a registered body and a legal entity
o producers are primary shareholders in the organization
o it deals with business activities related to the primary produce/product/ related inputs
o it works for the benefit of the member producers
o portions of profit are shared amongst the producers and the balance goes to the share capital or reserves.
o it has minimum shareholding members numbering 50 at the time of registration. However, the shareholding membership will have to be increased over a period of 3 years to a sustainable level.
Advantage India
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Small Farmers' Agribusiness Consortium (SFAC), a Society promoted by
Department of Agriculture and Cooperation, Ministry of Agriculture,
Government of India, has been mandated to act as a nodal agency to promote
FPOs.
SFAC is the designated agency to act as a single-window for technical support,
training needs, research and knowledge management, and to create linkages to
investments, technology and markets.
o SFAC will provide all-round support to State Governments, FPOs and other
entities engaged in promotion and development of FPOs.
o SFAC will create sustainable linkages between FPOs and inputs suppliers,
technology providers, extension & research agencies, and marketing &
processing players, both in the public and private sectors.
SFAC – Nodal Agency
Social and Economic Impact of FPOs
Enhanced productivity
Ensuring a competitive
market and higher
farmer profit
Smooth availability of inputs
Increased food and nutritional
security
Assured market linkage for backward and forward integration
Additional employment
generated due to increased intensity of
farming
Better labour wages and
reduction in migration
ECONOMIC IMPACT OF
FPO
Social Impact of FPO
Increased bargaining
power for input purchase and
marketing produce
Reduced social conflicts and
enhanced household wellbeing
Technology absorption
Positive health and nutrition
impact on consumers
Environment friendly
practices with reduced carbon
footprint
Assessment & Audit
Cluster Identification
Diagnostic Study
Feasibility Analysis
Baseline Assessment
Business Planning
Mobilisation of Farmers
Organising & Formalising
Resource Mobilisation
Systems Development
Business Operations
The life cycle of an FPO
Policy Support and Incentives for FPOs
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Government of India provides budgetary support to SFAC for its Equity Grant and Credit
Guarantee Fund Scheme for the Farmer Producer Company.
SFAC operates a Credit Guarantee Fund to mitigate credit risks of financial institutions
which lend to the Farmers Producer Companies (registered as Producer Company under
Part IX-A of Companies Act) without collateral. This helps the FPCs (one form of PO) to
access credit from mainstream financial institutions for establishing and operating
businesses.
SFAC provides matching equity grant up to Rs. 10 lakh to the FPCs to enhance borrowing
power, and thus enables the entities to access bank finance.
Lending to POs for contribution towards share capital on matching basis (1:1 ratio) to
enable the PO to access higher credit from banks. This is a loan without collateral which
will have to be repaid by the PO after specified time. The maximum amount of such
assistance is Rs. 25 lakh per PO with a cap of Rs. 25,000 per member.
NABARD provides credit and grant support for setting up marketing infrastructure
facilities for sale of produce.
NABARD facilitates tie-ups with buyers and provides support for marketing produce of
FPOs through rural haat and rural marts.
FPOs are eligible to get higher subsidies for creation of storage and other agricultural
marketing infrastructure under the Integrated Scheme for Agricultural Marketing
(Ministry of Agriculture, Government of India).
CAPART, Ministry of Rural Development and NABARD provide capacity building and
technology extension support to FPOs.
Ministry of Rural Development, Government of India also imparts skill and capacity
building training which can be made use of by the PO for its members.
Key States in FPOs
Goa
Assam
Mizoram
Nagaland
Sikkim
Tamil Nadu Puducherry
Jharkhand
Delhi
Andhra Pradesh
West Bengal
Arunachal Pradesh
Meghalaya
Manipur
Islands
Madhya Pradesh
Maharashtra
Bihar
Chhattisgarh
Uttarakhand
Odisha
Karnataka
Himachal Pradesh
Punjab
Jammu and Kashmir
Gujarat
Lakshadweep
Uttar PradeshRajasthan
Tripura
Haryana
Chandigarh
Dadra and Nagar Haveli
DamanDiu
Kerala
Telangana
Source: Agricultural and Processed Food Products Export Development Authority (APEDA), 2016-17
MadhyaPradesh
WestBengal
RajasthanKarnataka Maharashtra
Registered FPOs
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108
85
62
38
Ministry of Food Processing Industries, Govt. of IndiaTel: +91-11-26492216/ 26492174/ 26493227/ 26490933
Web: www.mofpi.nic.in
YES BANK Ltd.Tel: +91-11-46029071Email: [email protected]: www.yesbank.in
Confederation of Indian Industry (CII)Tel: +91-11-46344614Email: [email protected]: www.cii.in
Contact
Confederation of Indian Industry
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