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GoI launches New Scheme ‘Formation and Promotion of 10, 000 new FPOs’

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Govt launches Scheme titled 'Formation and Promotion of 10,000 FPO

The Ministry of Agriculture & Farmers Welfare stated that the Government of India (GoI) has launched a New Central Sector Scheme named ‘Formation and Promotion of 10, 000 new Farmer Producer Organizations (FPOs)’. Under the Scheme, GoI will form and promote 10, 000 new FPOs in India with a budget of INR 6865 Crores.

  • More than 86% of Farmers in India are Small, Marginal and Landless farmers, this scheme aims to integrate them under FPOs.
  • The Integration will help farmers to get access to latest technologies, credit, better input and more markets to encourage them to produce commodities of better quality.
  • It will help in Doubling of Farming Exports by 2022 and also increasing the income of farmers.
  • It will also provide more market linkages to farmers.

i.The FPOs will be formed based on Clusters, which will promote the spirit of ‘Cluster Farming’.

What is Cluster Farming?

  • Under Cluster Farming, Farmers will be encouraged to form their own clusters (around 50-60 Small farmers) and cultivate their lands collectively.
  • The ownership of the lands will remain with the farmers, but it will help in reducing their cost burden and raise their incomes.

FPO Clusters:

i.The FPOs will be developed based on Produce clusters – Agricultural & Horticultural produces. These will help in improving market access for members.

ii.During 2020-21, a total of 2200 produce clusters have been allocated for forming FPOs.

  • It includes Specialized FPO produce clusters like 100 FPOs for Organic, 100 FPOs for Oil seeds.
  • 369 FPOs have been listed for formation during 2020-21 in 115 aspirational districts of India.

One District One Product:

The scheme promotes ‘One District One Product’ cluster for specialization, better processing, marketing, branding & export.

  • The Agriculture Value Chain Organizations which form the FPOs will facilitate 60 % of market linkages for products of its members.

Implementation Agencies (IA’s):

i. 9 agencies have been finalized for formation & promotion of FPOs. They are

  • Small Farmers Agri-Business Consortium (SFAC)
  • National Cooperative Development Corporation (NCDC)
  • National Bank for Agriculture and Rural Development (NABARD)
  • North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC)
  • National Agricultural Cooperative Marketing Federation of India (NAFED)
  • Tamil Nadu-Small Farmers Agri-Business Consortium (TN-SFAC)
  • Small Farmers Agri-Business Consortium Haryana (SFACH)
  • Watershed Development Department (WDD) – Karnataka
  • Foundation for Development of Rural Value Chains (FDRVC) – Ministry of Rural Development (MoRD)

ii.NAFED has already formed & registered 5 Honey FPOs during 2020-21 in Uttar Pradesh, Madhya Pradesh, Rajasthan, Bihar and West Bengal.

iii.IA’s will engage Cluster Based Business Organizations (CBBOs) for providing support to each FPO for a period of 5 years.

  • CBBOs will be formed and engaged by IA’s, it will serve as a platform for discussion of all issues related to FPO promotion.

Financial Assistance to FPOs:

i.The FPOs will be provided financial assistance of upto INR 18 Lakh per FPO for a period of 3 years.

ii.Additionally, GoI will also provide

  • A matching equity grant upto INR 2, 000 per farmer member of FPO with a limit of INR 15 Lakh per FPO
  • A Credit Guarantee Facility of upto INR 2 Crore per FPO for project loan will be provided.

Constitution of Committees:

The scheme also proposes Committees at the District & National level to ensure proper implementation and monitoring of the scheme.

  • District Level Monitoring Committee (D-MC) will be formed under the Chairmanship of District Collector/CEO/ZillaParishad at the district level.
  • National Project Management Agency (NPMA) at the national level for providing project guidance, coordination, compilation of information related to FPOs, maintenance of Management Information System (MIS) & monitoring purpose.

Training Institute for FPOs:

  • Institutions like Bankers Institute of Rural Development (BIRD), Lucknow and LaxmanraoInamdar National Academy for Cooperative Research & Development (LINAC), Gurugam have been chosen to provide capacity development and training to FPOs.
  •  In Addition, Training & Skill Development modules have been developed to strengthen FPOs.

Benefits of the Scheme:

  • It is the first step for converting Krishi into Atma Nirbhar Krishi
  • It has the potential to boost cost effective production, productivity & provide high net incomes to members of FPOs.
  • Will improve rural economy & create job opportunities for rural youths in villages and will improve the farmer’s income.

About Ministry of Agriculture and Farmers Welfare (MoA&FW):

Union Minister– Narendra Singh Tomar (Lok Sabha MP, Constituency – Morena, Madhya Pradesh)

Minister of State (MoS) – Parshottambhai Rupala (Rajya Sabha MP, Constituency – Gujarat), Kailash Choudhary (Rajya Sabha MP, Constituency – Barmer (Rajasthan).