The Indian government has been actively promoting and supporting Farmer Producer Organizations (FPOs) to enhance the livelihoods of small and marginal farmers. The government’s initiatives aim to improve the bargaining power of farmers, reduce production costs, and increase their incomes through the aggregation of agricultural produce.

Central Government Support

The Central Government has launched several schemes to promote and support FPOs. The Central Sector Scheme for 'Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)' was launched in 2020 with a total budgetary outlay of Rs.6,865 crore. The scheme aims to enable farmers to enhance their bargaining power, leverage economies of scale, and reduce production costs. The scheme also provides for the handholding of each FPO for five years from its aggregation and formation, with a further committed liability of Rs.2,369.00 crore from 2024-25 to 2027-28.

The Small Farmers' Agribusiness Consortium (SFAC) is the nodal agency for implementing the scheme. SFAC provides technical support, training, research, and knowledge management to FPOs, as well as creates linkages to investments, technology, and markets. The National Cooperative Development Corporation (NCDC) has also been extended to include FPOs in the list of eligible institutions that receive support under various programs.

Key Initiatives and Impact

The government has introduced several key initiatives to support FPOs:

Equity Grant and Credit Guarantee Fund Scheme: This scheme provides equity grants to FPOs to enhance their equity base and enable them to leverage working capital from financial institutions.

Mission for Integrated Development of Horticulture (MIDH): Under this mission, FPOs are provided financial assistance for the creation of infrastructure for post-harvest management and marketing of horticultural produce.

National Agriculture Market (e-NAM): FPOs are integrated with e-NAM, an online trading platform that facilitates transparent and efficient marketing of agricultural commodities.

State Government Support

State Governments have also been actively promoting and supporting FPOs. The Department of Agriculture and Cooperation (DAC) has been working with State Governments to promote FPOs and provide them with technical support, training, and financial assistance. The DAC has also been working with the Food Corporation of India (FCI) to include FPOs as procurement agencies under the Minimum Support Price (MSP) procurement policy.

Case Study: Maharashtra

Maharashtra is one of the states where FPOs have shown significant progress. The state government has launched the 'Maharashtra Agri-Business Network Project (MAGNET)' to support FPOs by providing financial assistance, training, and market linkages. This initiative has helped many FPOs to become self-sustaining and profitable.

Objectives and Eligibility Criteria

The objectives of the FPO scheme are to build a sustainable agriculture sector by promoting and supporting FPOs, to provide support for the promotion of FPOs through qualified Resource Institutions (RIs), to promote economically viable and self-governing FPOs, and to provide the required assistance and resources to strengthen FPOs. The eligibility criteria for FPOs include being registered under the Companies Act or various central and state cooperative society laws, being registered and administered by farmers, and focusing on activities related to agriculture and allied sectors.

Impact and Challenges

The government’s initiatives have led to the registration of 7,597 FPOs in 34 States/Union territories, with a target of 10,000 FPOs. The scheme has also led to the allocation of 645 blocks for the formation and promotion of FPOs, with a further allocation of 455 blocks under consideration. However, there are challenges facing FPOs, including the need for more resources and support to strengthen their operations and increase their viability.

Conclusion

In conclusion, the Indian government has been actively promoting and supporting FPOs to enhance the livelihoods of small and marginal farmers. The government’s initiatives aim to improve the bargaining power of farmers, reduce production costs, and increase their incomes through the aggregation of agricultural produce. While there are challenges facing FPOs, the government’s support and initiatives have led to significant progress in the formation and promotion of FPOs in India.