Govt races to register 10,000 farmers’ producer organisations by year-end, ahead of Feb target
New Delhi: The Union government is racing to register 10,000 farmers’ producer organisations that can help boost their income with improved market access, advanced technology, and enhanced collective bargaining power.
The government may even reach this target by December, two months ahead of its target, two officials told Mint.
So far, the government has registered nearly 9,000 FPOs, one of them said.
Farmers’ producer organisations help bridge the gap between wholesale and retail food prices by aggregating and processing primary produce. The government launched the initiative on 29 February 2020 aiming to register 10,000 FPOs by 28 February 2025.
In the Union budget announced earlier this week, the government proposed increasing the allocation for FPOs by about 30%, from ₹450 crore for 2023-24 to ₹581.67 crore for 2024-25.
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“The FPOs will bring together small, marginal, and landless farmers, giving them the collective strength to tackle their challenges more effectively,” the official mentioned above said.
“Given the current pace of FPO registrations, the government may exceed the target of 10,000 FPOs by the end of this year,” the second official said.
Both officials spoke on condition of anonymity.
A spokesperson for the agriculture ministry said that as of 25 July, 8,939 FPOs had been registered.
A leg-up for the small and marginal farmer
Under the scheme guidelines, each FPO will receive financial assistance of up to ₹18 lakh over three years. Additionally, the scheme involves a matching equity grant of up to ₹2,000 per farmer member, with a maximum of ₹15 lakh per FPO.
A credit guarantee facility of up to ₹2 crore is also provided for project loans from lending institutions to ensure that FPOs have access to institutional credit.
FPOs with at least 300 farmer members are eligible for assistance in plain regions, while those with 100 members are eligible in northeastern and hilly areas.
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“A significant number of farmers in the country are small or marginal, with average land holdings of less than one hectare,” said Binod Anand, a member of the government’s committee on minimum support price, or MSP, which guarantees procurement of a farmer’s produce at a fixed price.
“As these small, marginal, and landless farmers face several challenges during the agricultural production phase, including difficulties accessing technology, quality seeds, fertilisers, pesticides, and the necessary financial resources, the FPOs help improve market access for farmers by facilitating direct sales,” he said.
Exports in decline
Several producer organisations registered so far have been helping farmers increase their incomes by participating in exports.
For example, Sahyadri Farms in Nashik exports mangoes, grapes, and vegetables; Green Gold FPO exports bananas and vegetables to Gulf countries and Europe; and Himalayan Organic FPO exports organic apples and oranges to premium markets in Europe and North America.
Members of such FPOs include small and marginal farmers, landless farmers, agricultural laborers, cooperatives, community groups, and producer companies.
FPOs also play a key role in the export of unique agricultural products. The Agricultural and Processed Food Products Export Development Authority (APEDA) has registered over 1,000 FPOs and Farmer Producer Companies (FPCs) to support this effort.
However, exports of agricultural and processed food products contracted by 3% in the first quarter of this fiscal year, decreasing from $6,083.83 million in April-June 2023 to $5,886.81 million in April-June 2024, commerce ministry data show.
FPCs were introduced in 2000 to help boost farmers’ income. These function under the Companies Act, 2013, allowing shareholding farmers to pool resources for better market linkages.
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