Role of FPO in indian agriculture

 WHAT IS FPO

                             A Farmer Producer Organization (FPO) is a type of Producer Organisation (PO) where farmers are its members. The PO is an organisation of any produce, such as non-farm products, agricultural, artisan products, etc., by producers. The Small Farmers' Agribusiness Consortium (SFAC) provides support for FPOs promotion.

PROS OF FPO

Aggregation of produce and bulk transport reduces marketing cost, thus, enhancing net income of the producer

scale and attracts traders to collect produce at farm gat

Access to modern technologies

Post-harvest losses can be minimized

Promote cooperative farming;

Increase farmer’s income ,financial security 

Increase farmer’s bargaining power;

Reduce ICOR(incremental capital output ratio) and fiscal deficit

Increase in B2B business 

The role of FPO is to act as an aggregator for member farmers including from inputs to output which will enhance the economy of scale and bargaining power of member farmers. In case of unsold Lots, Logisitics arrangement is to be made by FPO/FPC

GOVT’S EFFORTS

Increase export under aatamnirbhar agriculture;

Credit guarantee under “agriculture infrastructure fund”(i.e. Cold storage, storage supply chain)

DEVELOPING FOOD PARK

DEBT BY NABARD SIDBI AND PSB UNDER “FUNDfor fund “ scheme

NABARD created Producers Organization Development Fund (PODF)               

“one district- one product” 

In budget 2022-23 govt. Set target for 10,000 FPO registration

Currently 2177 FPO's have been onboarded on e-NAM platform.

In order to oversee the promotional efforts and provide policy inputs for creating appropriate ecosystem for FPOs to sustain their business operations, NABARD has constituted a National Advisory Committee headed by its Chairman and members from the concerned Ministries of the Govt. of India, SFAC, Academic Institutions, Professional agencies, Agri Corporates, leading FPOs, etc. Similarly, State level Consultative Committees have been formed under its Regional Offices to provide necessary guidance to the implementation of the scheme and ensuring desired synergy between the efforts of various stakeholders for building sustainable FPO.

The Union Finance Minister, in the Budget Speech for 2013-14, announced two major initiatives to support Farmer Producer Companies (FPCs)

Equity Grant Fund Scheme

Credit Guarantee Fund Scheme

CHALLENGES

BULIDING ECOSYSTEM FOR FPO

Lack of/ Inadequate Professional Management

Weak Financials

. Inadequate Access to credit

Lack of Risk Mitigation Mechanism

Inadequate Access to Market

Inadequate Access to Infrastructure

Lack of technical Skills/ Awareness

HOW TO IMPROVE

Suitable amendments in the APMC Act to treat the country as a single

Convergence of resources for creation of farm level infrastructure at FPO level for cleaning, grading, sorting, assaying, processing, branding & transportation of agri commodities up to delivery

Appropriate provision in the Food Grain Procurement policy of the Government of India requiring procurement of agricultural commodities directly through FPOs under MSP scheme.

Suitable amendments in the Producer Companies Act, 2013 to strengthen the financials of FPOs

The benefits of Equity Grant & Credit Guarantee Fund schemes of SFAC may be extended to all forms of FPOs as also to smaller FPOs having shareholder membership of less than the existing limit of 500 farmers.

SIMPLIFY REGISTRATION PROCESS AND LICANCING PROCESS

How to register

Open eNAM platform

Name of FPOs/ FPCs

- Name, address, email Id and contact no. of authorized person (MD/CEO /Manager )

- Bank account Details ( Name of Bank, Branch, Account no. IFSC Code )