Collectivization

More than 86% of farmers in the country are small and marginal. There is a need to facilitate our farmers with access to improved technology, credit, better input and more markets to incentivize them to produce better quality commodity. For this, Aggregation of small, marginal and landless farmers into FPOs will help enhance economic strength & market linkages of farmers for enhancing their income.

Benefits of Aggregation A study in four states, viz., Kerala, Madhya Pradesh, Odisha and Rajasthan covering 1886 farmer members of 39 FPOs and another 977 non-members was done to understand the benefits accruing to the farmers after joining a FPO. The study clearly shows that farmers can generate more income from agricultural and allied sector activities on account of better farming practices, savings in the purchase of inputs, change in cropping pattern, increase in productivity and production of the crops and other activities after joining an FPO.

Central scheme to promote 10,000 FPOs

Government of India has launched a new Central Sector Scheme titled "Formation and Promotion of 10,000 Farmer Produce Organizations (FPOs)" with a clear strategy and committed resources to form and promote 10,000 new FPOs in the country with budgetary provision of Rs 6865 crore.

FPOs are to be developed in produce clusters, wherein agricultural and horticultural produces are grown / cultivated for leveraging economies of scale and improving market access for members. “One District One Product” cluster to promote specialisation and better processing, marketing, branding & export. Further Agriculture value chain organizations forming FPOs and facilitating 60% of market linkages for members produce.

Under this Central Sector Scheme with funding from Government of India, formation & Promotion of FPOs are to be done through the Implementing Agencies (IAs). Presently 9 Implementing Agencies (IAs) have been finalized for formation and promotion of FPOs viz.

1. Small Farmers Agri-Business Consortium (SFAC)

2. National Cooperative Development Corporation (NCDC)

3. National Bank for Agriculture and Rural Development (NABARD)

4. National Agricultural Cooperative Marketing Federation of India (NAFED)

5. North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC)

6. Tamil Nadu-Small Farmers Agri-Business Consortium (TN-SFAC)

7. Small Farmers Agri-Business Consortium Haryana (SFACH)

8. Watershed Development Department (WDD)- Karnataka

9. Foundation for Development of Rural Value Chains (FDRVC)- Ministry of Rural Development (MoRD).

Implementing Agencies (IAs) will engage Cluster Based Business Organizations (CBBOs) to aggregate, registered & provide professional handholding support to each FPO for a period of 5 years. CBBOs have been empanelled & engaged by IAs. CBBOs will be the platform for an end to end knowledge for all issues related to FPO promotion.

Resources by Relevant Organizations

SFAC:

• Here's a detailed guide on collectivizing into an FPO by the Small Farmer's Agribusiness Consortium.

NIRDPR

• Here's a detailed guide on making a business plan for an FPO, intended to guide the CEO of an FPO by National Institute of Rural Development and Panchayati Raj, Hyderabad

Govt. of AP

• Here's an operational guide on sustaining FPOs, creating institutional linkages for governance and the functions of an FPO outlined by Andhra Pradhesh in 2016.

NAFPO:

• Here's a repository of useful resources for FPOs on management, legal compliance, capacity building of FPOs and more by NAFPO