The Central Sector Scheme for Formation and Promotion of 10,000 FPOs was launched by Prime Minister Narendra Modi on February 29, 2020, with a budget of ₹6,865 crore till 2027-28. This initiative aims to strengthen small and marginal farmers by providing them with better market access, financial aid, and collective bargaining power. Recently, the 10,000th FPO was launched in Khagaria, Bihar, focusing on maize, banana, and paddy. Approximately 30 lakh farmers, including 40% women, are now linked to FPOs, contributing significantly to the agricultural economy.
Key Highlights of the Scheme
About the Scheme
- Launched by: PM Narendra Modi on February 29, 2020
- Budget: ₹6,865 crore (2020-2027)
- Objective: Formation of 10,000 FPOs to boost farmers’ income through collective farming and marketing
- Latest Milestone: 10,000th FPO registered in Khagaria, Bihar
- Beneficiaries: 30 lakh farmers, with 40% women participation
Financial Assistance
- Equity grants: ₹254.4 crore to 4,761 FPOs
- Credit guarantee cover: ₹453 crore for 1,900 FPOs
Financial Support
- ₹18 lakh per FPO for management costs (3 years)
- Matching equity grant of ₹2,000 per farmer (up to ₹15 lakh per FPO)
- Credit guarantee facility up to ₹2 crore per FPO
Role of FPOs in Agriculture
- Definition: Farmer Producer Organizations (FPOs) are registered groups of farmers working together for better market access and resource utilization.
- Regulated under: Companies Act (Part IXA) or Co-operative Societies Act
- Mandated by: Small Farmers’ Agribusiness Consortium (SFAC)
Objectives of FPOs
- Enhance farmers’ income through better market linkages
- Reduce input costs by providing collective access to seeds, fertilizers, and technology
- Ensure financial and credit support to small and marginal farmers
- Promote value addition through processing and branding
- Encourage sustainable farming practices
- Government Support & Ministry Convergence
Ministry/Department Support Provided
- Agriculture & Farmers Welfare Provides licenses, dealership support, and e-NAM linkages
- Food Processing 35% capital subsidy, 50% grant for branding and marketing
- Micro, Small & Medium Enterprises (MSME) Funds for management, equity grant, and credit facility
- Fisheries, Animal Husbandry & Dairying Dairy FPO support with ₹500 crore allocation
- APEDA Export assistance to registered FPOs
- Spices Board Support for value-added spice production and export
Key Initiatives under the Scheme
- Credit Guarantee Fund (CGF): Provides financial security for banks to lend to FPOs.
- ONDC Integration: 5,000+ FPOs onboarded on the Open Network for Digital Commerce for online selling.
- CSC MoU: Agreement signed to convert 10,000 FPOs into Common Service Centers (CSCs), providing digital services in rural areas.
Activities & Services Provided by FPOs
- Supply of quality inputs like seeds, fertilizers, and pesticides at lower costs
- Access to machinery and equipment on rental basis
- Value addition & processing facilities (cleaning, grading, packaging)
- Storage & transportation support
- Better market linkages through collective selling and negotiation
- Additional income-generating activities (beekeeping, seed production, etc.)
| Summary/Static | Details |
| Why in the news? | Government Achieves 10,000 Farmer Producer Organizations (FPOs) Goal |
| Launch Date | February 29, 2020 |
| Budget | ₹6,865 crore (2020-2027) |
| Milestone | 10,000th FPO launched in Khagaria, Bihar |
| Equity Grants Released | ₹254.4 crore (4,761 FPOs) |
| Credit Guarantee Cover | ₹453 crore (1,900 FPOs) |
| Support to Each FPO | ₹18 lakh (management), ₹2,000 per farmer (equity), ₹2 crore credit guarantee |
| Total Farmers Benefited | 30 lakh (40% women) |
| Key Ministries Involved | Agriculture, Food Processing, MSME, Fisheries, APEDA, Spices Board |
| Key Initiatives | Credit Guarantee Fund, ONDC integration, CSC conversion |
| Services Provided by FPOs | Input supply, machinery rental, value addition, storage, logistics, marketing support |
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