Formation and Promotion of Farmer Producer Organizations (FPOs)

A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen.
A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members.
In some forms like producer companies, institutions of primary producers can also become members of PO.
FPO is one type of PO where the members are farmers.
Small Farmers’ Agribusiness Consortium (SFAC) is providing support for the promotion of FPOs.

Formation and Promotion of Farmer Producer Organizations (FPOs) would be a new Central Sector Scheme under the Ministry of Agriculture and Farmers Welfare to form and promote 10,000 new FPOs.
Initially there will be three implementing Agencies to form and promote FPOs, namely Small Farmers Agri-business Consortium (SFAC), National Cooperative Development Corporation (NCDC) and National Bank for Agriculture and Rural Development (NABARD).
States may also, if so desire, nominate their Implementing Agency in consultation with Department of Agriculture, Co-operation and Farmers Welfare (DAC&FW).
DAC&FW will allocate Cluster/States to Implementing Agencies which in turn will form the Cluster-Based Business Organization in the States.

Small and marginal farmers do not have the economic strength to apply production technology, services and marketing including value addition.
Through the formation of FPOs, farmers will have better collective strength for better access to quality input, technology, credit and better marketing access through economies of scale for better realization of income.

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