Transformation of agriculture into a sustainable enterprise through FPOs

New Delhi: Agriculture sector plays a very important role in both economic development and nation-building. India is globally at the forefront of the development of agriculture. The goal is to achieve the doubling of export by 2022. However, 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 the better quality commodity. For this, the Aggregation of small, marginal and landless farmers into FPOs will help enhance the economic strength and market linkages of farmers for enhancing their income.

Keeping this in mind, the 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 a budgetary provision of Rs. 6865 crore.

FPOs are to be developed in production 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 specialization 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 the Government of India, the formation & Promotion of FPOs is to be done through the Implementing Agencies (IAs). Presently 09 Implementing Agencies (IAs) have been finalized for formation and promotion of FPOs viz. Small Farmers Agri-Business Consortium (SFAC), National Cooperative Development Corporation (NCDC),  National Bank for Agriculture and Rural Development (NABARD), National Agricultural Cooperative Marketing Federation of India (NAFED), North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC), Tamil Nadu-Small Farmers Agri-Business Consortium (TN-SFAC), Small Farmers Agri-Business Consortium Haryana (SFACH), Watershed Development Department (WDD)- Karnataka & 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.

During 2020-21, a total of 2200 FPO produce clusters have been allocated for formation of FPOs, which also include specialized FPO produce clusters such as100 FPOs for Organic, 100 FPOs for Oil seeds etc. Of these, 369 FPOs are targeted for formation during current year for formation in 115 aspirational districts in the country.

NAFED would form the specialized FPOs which should necessarily be forwardly linked to the market, agri-value chain, etc. NAFED will provide market and value chain linkages to the FPOs formed by other Implementing Agencies. NAFED has formed & registered 05 Honey FPOs during current year in Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar & West Bengal.

FPOs will be provided financial assistance upto Rs 18.00 lakh per FPO for a period of 03 years. In addition to this, provision has been made for matching equity grant upto Rs. 2,000 per farmer member of FPO with a limit of Rs. 15.00 lakh per FPO and a credit guarantee facility upto Rs. 2 crore of project loan per FPO from eligible lending institution to ensure institutional credit accessibility to FPOs.

At district level, a District Level Monitoring Committee (D-MC) is constituted under the Chairmanship of District Collector/ CEO/ Zilla Parishad with representatives of different related departments and experts for overall coordination & monitoring the implementation of scheme in the district including the suggestion for potential produce cluster & development

At National level, National Project Management Agency (NPMA) as a professional organization has been engaged for providing overall project guidance, coordination, compilation of information relating to FPOs, maintenance of MIS and monitoring purpose.

There are well defined training structures in the scheme and the institutions like Bankers Institute of Rural Development (BIRD), Lucknow and LaxmanraoInamdar National Academy for Co-operative Research & Development (LINAC), Gurugram have been chosen as the lead training institutes for capacity development & trainings of FPOs. Training & skill development modules have been developed to further strengthen the FPOs.

Formation & promotion of FPOs is the first step for converting Krishi into AtmanirbharKrishi. This will enhance cost effective production and productivity and higher net incomes to the member of the FPO. Also improve rural economy and create job opportunities for rural youths in villages itself. This was the major step towards improving farmers’ income substantially.