FPO not merely a company but a collective for benefiting farmers: N S Tomar

National Conference of Cluster Based Business Organisations (CBBOs) under Central Sector Scheme of Formation and Promotion of 10,000 FPOs held in New Delhi

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New Delhi: “The role of Cluster Based Business Organizations (CBBOs) should be to strengthen Farmer Producer Organizations (FPOs) so that farmers seek them out. FPO is not merely a company, it is a collective for the benefit of farmers,” emphasized Union Agriculture Minister, Narendra Singh Tomar in his key note address at the inaugural session of the National Conference of CBBOs.
Tomar said that more and more farmers should be part of FPOs. He said that earlier around 7,000 FPOs were made but they could not last and a new scheme of FPOs was launched by the Prime Minister with an outlay of Rs. 6865 crore.
At the conference, Union Agriculture Minister also launched the logo for 10,000 FPOs Scheme.
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.
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) and the same was launched by Prime Minister on February 29, 2020 at Chitrakoot (UP) for implementation.
The scheme is based on produce cluster approach to 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.
The FPOs to be eligible under the scheme for financial benefit and technical handholding 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 NER. 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.
Under the scheme CBBOs have been provisioned as the professional agency with a critical role to play as they are to engage themselves all along the value chain starting right 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. They are also to establish cardinal link with Implementing Agencies and FPOs.
Progress:
  1. More than 5.87 lakh farmers have been mobilized under the Scheme.
  2. About 3 lakh farmers have been registered as shareholders of the FPOs.
  3. Equity contribution by farmer members amounts to INR 36.82 crores.
  4. Total equity base of the FPOs, including the Equity Grant released, amounts to INR 50 crores.
  5. 201 women focused FPOs have been registered.
  6. 481 FPOs registered in tribal districts.
  7. 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.
Considering CBBOs significance and to ensure that they discharge their duties effectively  and also to understand their field level implementation issues , representatives  of 265 CBBOs  empanelled by 13 Implementing Agencies were invited in today’s conference . All the 13 Implementing Agencies, senior officers from State Governments dealing with FPOs were also invited. More than 4,900 produce clusters have been allocated and 2331 FPOs registered.