FPO

Taken together, small and marginal holdings (below 2 hectares) constitute 85 percent of the farming community in India. Small farmers face various farm- and household-specific transaction costs, limiting their ability to participate in input and product markets. As food preferences change toward a diversified, higher-quality diet due to income and population growth, small-farm commercialization is crucial to meet this rising demand.

Aggregation models are potential institutional interventions that help redress the constraints of small farms, wherein groups of producers jointly manage resources or access credit, inputs, information, and product markets to reduce transaction costs. Successful aggregation models have shown increasing economies of scale, decreased transaction and coordination costs, improved access to markets, and investment in yield-stabilizing technologies like irrigation and improved crop varieties to be the main benefits of organizing farmers.

After the amendment of the Companies Act in 2003, farmer Producer Organizations (FPOs) emerged as a new form of aggregation model in India. Owing to a hybrid business model (between a private company and a cooperative), the new institutional form of FPOs limits membership to only primary producers who contribute equitably to the working capital and democratically control the FPO, sharing equal voting rights. Thus, being structurally different in membership, governance, and business model from cooperatives, FPOs are viewed as an advantageous alternative to cooperatives, with the key purpose of facilitating smallholder commercialization and increasing farm incomes. (Source: Tata Cornell Institute)

The Department of Agriculture and Cooperation, Ministry of Agriculture has put together Policy and Process guidelines for FPOs. It includes the process of developing and promoting an FPO – incorporation of a producer company, practices, assessing the capital requirements of a producer company, assessment of the financial viability of the business of producer companies, assessing institutional performance of producer company and policy support available for FPOs.

This primer and trainer's guide for board of directors and management of an FPO comprehensively lists the steps and considerations for setting up an FPO – selecting a BoD and outlining their responsibilities. It also looks at Statutory compliances, marketing & networking, human resources, finance functions and business plans for an FPO.

An FAQ doc from NABARD covers the basics of what an FPO is and why FPOs are needed – concept of FPOs, business planning, financial management, funding for FPOs and monitoring by funding agencies

Here are relevant resources across the various stages pertinent to an FPO:

1. Collectivization

2. Financing

3. Procurement of Inputs

4. Marketing Outputs

5. Market Linkages for FPOs Here (page no. 11 to 23) are case studies of two FPOs (FPCs)- Bhoomgaadi Farmers Producer Company Limited, and Sahaja Aharam Producer Company Limited - by Centre for Science and Environment (CSE).

6. Sustainability (Azim Premji University proposes a Two-tier model of FPOs)

Here's a collection of success stories highlighting the role of FPOs in empowering farmers. It includes case studies from Maharashtra, Andhra Pradesh, Uttarakhand, Telangana, Karnataka, Tamil Nadu, Kerala, Bihar, Manipur, and Odisha.