Formation and Promotion of 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.
Farmer Producer Organization (FPO) is one type of PO where the members are farmers.
Small Farmers’ Agribusiness Consortium (SFAC) is providing support for the promotion of FPOs.

In 2021, Government of India launched a Scheme titled “Formation and Promotion of 10,000 Farmer Produce Organizations (FPOs)” to form and promote 10,000 new FPOs in the country.
Formation and Promotion of 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 the 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.

Why in News?

During the National Conference of Cluster Based Business Organisations (CBBOs), held recently, Union Agriculture Minister Narendra Singh Tomar mentioned the significance of the Formation and Promotion of FPOs Scheme.

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