India Achieves Milestone with 10,000 FPOs

March 1, 2025

The Government of India has successfully established 10,000 Farmer Producer Organisations (FPOs) as part of its flagship scheme. This initiative, launched in February 2020, aims to enhance agricultural productivity and boost rural economies. The milestone was marked by the registration of the 10,000th FPO in Khagaria district, Bihar. This FPO focuses on maize, banana, and paddy cultivation.

About Farmer Producer Organisations (FPOs)

FPOs are collective organisations formed by farmers. They are designed to empower farmers by enabling them to pool resources, share knowledge, and increase bargaining power in the market. FPOs can take various legal forms, including producer companies and cooperative societies. Their primary goal is to enhance the economic well-being of their members.

Role of the Small Farmers’ Agribusiness Consortium (SFAC)

The SFAC plays important role in promoting FPOs across India. It provides guidance and support to farmers in forming and managing these organisations. SFAC helps farmers navigate the complexities of agribusiness and ensures they can leverage collective strength for better market access.

Financial Support and Incentives

Since the scheme’s inception, the government has allocated substantial funds to support FPOs. A total of Rs 254.4 crore in equity grants has been disbursed to 4,761 FPOs. Additionally, a credit guarantee cover of Rs 453 crore has been issued to 1,900 FPOs, facilitating access to institutional credit. Each new FPO receives financial assistance of Rs 18 lakh for management costs and matching equity grants to encourage participation.

Impact on Farmers and Rural Economy

Approximately 30 lakh farmers are now connected to these FPOs, with a notable representation of women. FPOs are conducting business worth thousands of crores in the agricultural sector. This initiative not only improves agricultural productivity but also creates rural jobs and enhances economic resilience.

Legal Framework for FPOs

FPOs can be registered under various legal frameworks, including the Companies Act, the Societies Registration Act, and the Public Trusts Act. This legal recognition provides a structured approach to governance and operation, ensuring that member farmers have a say in decision-making processes.

Future Prospects for FPOs

The continued support and expansion of FPOs are vital for India’s agricultural landscape. They are expected to play role in promoting self-reliance and efficiency in the agricultural ecosystem. As the government invests in these organisations, their impact on rural livelihoods and economic growth is likely to increase.

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