Farmer Producer Organization: National Conference of Cluster Based Business Organisation Held

FPO UPSC: Relevance

• GS 3: Transport and marketing of agricultural produce and issues and related constraints

Farmer Producer Organisation: Context

• Recently, Ministry of Agriculture & Farmers Welfare organised the National Conference of Cluster Based Business Organisations (CBBOs), under Central Sector Scheme of Formation and Promotion of 10,000 FPOs.

किसान उत्पादक संगठन: संकुल आधारित व्यापार संगठन का राष्ट्रीय सम्मेलन आयोजित

Cluster Based Business Organisations: Key points

• The role of Cluster Based Business Organisations (CBBOs) should be to strengthen Farmer Producer Organisations (FPOs) so that farmers seek them out.
• At the conference Union Agriculture Minister also launched the logo for 10,000 FPOs Scheme.

What is CBBO?

• Under the scheme, CBBOs have been provisioned as the professional agency and they have to engage themselves all along the value chain.
• They will play a critical role starting from mobilization of farmers, baseline survey, identification of produce clusters, formation of groups, registration and capacity building to preparation of business plan, execution thereof with assurance to provide the market to the FPOs.
• CBBO are also to establish cardinal link with Implementing Agencies and FPOs.

Progress of Formation and Promotion of 10,000 FPOs

• More than 5.87 lakh farmers have been mobilized under the Scheme.
• About 3 lakh farmers have been registered as shareholders of the FPOs.
• Equity contribution by farmer members amounts to INR 36.82 crores.
• Total equity base of the FPOs, including the Equity Grant released, amounts to INR 50 crores.
• 201 women focused FPOs have been registered.
• 481 FPOs registered in tribal districts.
• FPOs have started business transactions:
  • 84 FPOs of 14 CBBOs of SFAC have made transactions worth INR 928.28 lakhs
  • 12 FPOs of 3 CBBOs of NAFED have made transactions worth INR 48.35 lakhs.

About of Formation and Promotion of 10,000 FPOs

• Realizing the need to form and promote FPOs across the country, Government formulated a dedicated Central Sector Scheme “Formation & Promotion of 10,000 Farmer Producer Organizations (FPOs) in 2020.
• The scheme is based on produce cluster approachto enhance production, productivity, market access, promote diversification, value addition, processing and export and also to create agri-based employment opportunities with the aim to economically empower farmers.
• Eligibility of FPOs: The FPOs to be eligible under the scheme are required to be registered either under Companies Act, 2013 or States’ Co-operative Societies Act with minimum number of 300 farmers in plain areas and 100 farmers in hilly and North eastern region.
• Benefits to FPOs: Under the scheme, there is provision for financial support of maximum Rs.18.00 lakh per FPO for 3 years as management cost to make them sustainable and economically viable.
• To strengthen the financial base of FPOs and entail them to avail collateral free loan, there is also provision for matching equity grant of maximum Rs. 2000/- per member with ceiling of Rs, 15 lakh /FPO and Credit Guarantee facility upto bankable project loan of Rs. 2.00 crore respectively.

Why FPO is needed?

• Indian agriculture is dominated by small and marginal farmers with average land holdings size of less than 1.1 ha.
• These small and marginal farmers constituting more than 86 % of the total land holdings are facing tremendous challenges both in production and post-production scenarios like access to production technology, quality inputs at reasonable prices, seed production, custom hiring, value addition, processing, credit, investments and most importantly markets.
• Hence, collectivization of such producers through formation of FPOs is very important to address such challenges and enhance their incomes.

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