Farmer Producer Companies (FPC)

On the recommendations of an expert panel led by Y.K. Alagh, Centre had amended the Indian Companies Act, 1956, in 2002-03 to provide for “producer companies”. A Farmer Producer Company is a hybrid between cooperative societies and private limited companies.

• A Farmer Producer Company can be formed by any 10 or more primary producers or by two or more producer institutions, or by a contribution of both.
• They can undertake activities related to production, harvesting, procurement, grading, pooling, marketing, processing, etc., of agricultural produce.
• The Farmer Producer companies have democratic governance, each producer or member has equal voting rights irrespective of the number of shares held
• Non-producers seeking to invest in these companies as shareholders are precluded under the statute concerned.

Government exempted the profits of Farmer Producer Companies (FPC) from tax for a period of five years from the next financial year.