Reference:

• Prime Minister Narendra Modi recently launched the 10,000th Farmer Producer Organization (FPO) in Bhagalpur, Bihar, along with the 19th installment of the PM-Kisan Samman Nidhi (PM-Kisan).
• This 10,000th FPO is registered in the Khagaria district and focuses on maize, banana, and paddy.

Farmer Producer Organization (FPO):

• Prime Minister Narendra Modi launched the Central Scheme for the Formation and Promotion of 10,000 FPOs on February 29, 2020.
• FPOs refer to farmer-producer organizations incorporated/registered under Part IXA of the Companies Act or the Cooperative Societies Act, formed to leverage collective benefits in agricultural production and marketing.
• Nearly 3 million farmers in India are associated with FPOs, with 40% being women. These FPOs are now handling businesses worth thousands of crores in the agricultural sector.
• The scheme aims to organize farmers and make them economically and technically empowered.
• The scheme was launched with a budgetary outlay of ₹6,865 crores till 2027-28.
• Since its inception, 4,761 FPOs have been granted ₹254.4 crores in equity grants, and 1,900 FPOs have received ₹453 crores as credit guarantee cover.

Importance of FPOs:

• Each newly formed FPO under this scheme receives handholding support for five years.
• Each FPO is provided ₹18 lakh as financial assistance for management costs for three years.
• Additionally, each farmer member of the FPO receives ₹2,000 as equity grant, with a limit of ₹15 lakh per FPO.
• To ensure institutional credit access, eligible lending institutions provide credit guarantee facility for project loans up to ₹2 crores per FPO.

Convergence of Ministries for FPOs in India:

• Ministry of Agriculture & Farmers' Welfare: Supports FPOs in obtaining seed, fertilizer, pesticide licenses, dealership, and connects them with e-NAM, ONDC.
• Ministry of Food Processing: Provides 35% credit-linked capital subsidy and 50% branding & marketing grant to FPOs.
• Ministry of Micro, Small & Medium Enterprises (MSME): Offers funds for management costs, equity grants, credit guarantees, training, and marketing assistance.
• Ministry of Fisheries, Animal Husbandry & Dairying: Allocates ₹500 crores for Dairy FPOs and establishes 100 fodder FPOs through NDDB.
• APEDA: Assists FPOs in exports and enterprise establishment under the SFURTI scheme.
• Spices Board: Supports the production, processing, and export of spices through the SPICED scheme.

Services & Activities Provided by FPOs:

FPOs support their members through the following key services and activities:

• Supply of seeds, fertilizers, pesticides, and quality inputs at bulk-discounted rates.
• Provision of custom hiring services for equipment like cultivators, tillers, sprinklers, combine harvesters, etc.
• Offering cleaning, sorting, grading, packing, and primary processing facilities at affordable user charges.
• Engaging in seed production, beekeeping, mushroom farming, and other high-income activities.
• Aggregating small farmer produce and adding value to improve marketability.
• Providing market intelligence to help farmers make informed production and marketing decisions.
• Facilitating storage, transportation, and logistics services at shared costs.
• Marketing aggregated produce efficiently for better price realization.

Key Achievements:

•  Formation of 10,000 FPOs
• 3 million farmers benefited
•  40% women participation
• ₹6,865 crores government support
•  Growth in digital marketing and financial inclusion