New Delhi, Feb 28 – The Indian government has successfully met its ambitious target of setting up 10,000 Farmer Producer Organisations (FPOs) under its flagship central scheme. The milestone was reached with the registration of the 10,000th FPO in Khagaria district, Bihar, focusing on maize, banana, and paddy cultivation. The initiative was recently inaugurated by Prime Minister Narendra Modi.
Launched on February 29, 2020, the Formation and Promotion of 10,000 FPOs scheme was introduced with a budget allocation of ₹6,865 crore for implementation until 2027-28. The scheme is aimed at bolstering agricultural productivity, enhancing farmers' incomes, and fostering rural employment opportunities.
The Agriculture Ministry hailed this achievement as a “transformative milestone for the agriculture sector,” emphasizing the role of FPOs in ensuring economic resilience and self-reliance in farming communities.
Financial Assistance and Farmer Participation
Since the scheme’s inception, financial aid has been systematically provided to strengthen FPOs:- Equity grants worth ₹254.4 crore have been disbursed to 4,761 FPOs.
- Credit guarantee cover of ₹453 crore has been issued to 1,900 FPOs.
- Approximately 30 lakh farmers are now associated with FPOs, with 40% of them being women.
- These FPOs are engaged in agricultural trade worth thousands of crores.
Support and Institutional Framework
To ensure sustainability, the government has extended comprehensive support, including:- ₹18 lakh per FPO as management cost assistance for three years.
- Matching equity grants up to ₹2,000 per farmer member, with a maximum limit of ₹15 lakh per FPO.
- Credit guarantee facility of up to ₹2 crore for project loans from eligible financial institutions.
Structural Foundation of FPOs
FPOs are registered entities under Part IXA of the Companies Act or state-specific Co-operative Societies Acts. These organizations help small and marginal farmers leverage collective strength for better economies of scale in both production and marketing of agricultural and allied activities.As India continues its push for an efficient, self-reliant, and prosperous agricultural ecosystem, the expansion and reinforcement of FPOs are expected to play a critical role in transforming rural economies.