Source: PIB
Context:
The Government of India has completed the formation of 10,000 Farmer Producer Organisations (FPOs) under this central sector scheme. Notably, 21.96 lakh women farmers are members, underlining the scheme’s strong gender inclusion focus (PIB).
What is the Scheme?
The Central Sector Scheme of Formation and Promotion of 10,000 FPOs aims to collectivise small and marginal farmers into formal producer organisations so they can:
- Aggregate produce
- Access credit and technology
- Undertake processing and value addition
- Gain stronger market bargaining power
Launch Details
- Launched on: 29 February 2020
- Nature: Central Sector Scheme (100% funded by Centre)
Implementing Agencies (IAs)
- Small Farmers’ Agribusiness Consortium (SFAC)
- National Bank for Agriculture and Rural Development (NABARD)
- National Cooperative Development Corporation (NCDC)
- National Agricultural Cooperative Marketing Federation of India (NAFED)
Aim of the Scheme
To build a sustainable, income-oriented farming ecosystem by:
- Strengthening farmer collectives
- Improving access to inputs, institutional credit, technology
- Integrating farmers with value chains and markets
- Enhancing farmers’ bargaining power and resilience
Key Features of the Scheme
1. Cluster & Commodity-Based Approach
- FPOs formed around produce clusters
- Aligned with One District One Product (ODOP)
- Encourages scale, specialisation, and efficiency
2. Financial Support
a) Handholding Support
- Up to ₹18 lakh per FPO
- For 3 years
- Covers professional management, accounting, compliance, and business planning
b) Equity Grant
- Matching equity grant up to ₹15 lakh per FPO
- Limited to ₹2,000 per farmer
- Strengthens FPO balance sheets
c) Credit Guarantee
- Credit guarantee cover up to ₹2 crore per FPO
- For institutional project loans
- Reduces lending risk and improves credit access
3. Market Linkages
- NAFED-led forward linkages
- Integration with:
- Input suppliers
- Processors
- Bulk buyers
- Export markets
- Focus on value-chain participation, not just aggregation
4. Capacity Building
- Structured training programmes through:
- BIRD, Lucknow
- LINAC, Gurugram
- Training for:
- Board members
- CEOs
- Farmer shareholders
5. Inclusion Focus
- High participation of women farmers
- Coverage of:
- Aspirational districts
- Tribal and backward regions
- Promotes social and regional equity
