Making a start on fulfilling the promise of 10,000 new farmer producer organisations (FPOs) by 2023-24, Central and State agencies have identified 1,580 blocks where FPOs will be started this year, according to a review conducted by the Agriculture Ministry on Tuesday.
The process of creating a credit guarantee fund for FPOs has also been started, with the Ministry releasing funds to the implementing agencies,said an official statement.
FPOs are a critical component of the Centre’s agricultural reform agenda. By bringing together large groups of farmers as shareholders in a registered entity, FPOs can leverage economies of scale, allowing for cheaper purchase of farm inputs in bulk amounts and better access to credit, as well as encouraging the creation of storage and processing infrastructure, allowing for value addition at the farm gate.
The controversial new farm laws passed by Parliament last month, which aim to give more marketing choices for farmers, are more likely to be effective for FPOs than for the individual small or marginal farmer, leveraging the collective bargaining power of a larger group.
The country already has almost 6,500 FPOs created over the last decade. The goal of 10,000 new FPOs was first announced in the 2019-20 budget speech. However, scheme guidelines were only announced a year later, in July 2020. The scheme has a budget of ₹ 6,865 crore to support FPOs. The 2020-21 target is to create 2,200 FPOs.
At Tuesday’s review meeting chaired by Agriculture Minister Narendra Singh Tomar, it was informed that monitoring and coordination committees have been set up in 400 districts, and 411 product clusters have been certified so far. Training and capacity development programmes are being prepared to equip FPOs in marketing and business skills.
Major implementing agencies include the Small Farmers Agribusiness Consortium (SFAC), National Bank for Agriculture and Rural Development (NABARD), National Cooperative Development Corporation (NCDC) and the National Agricultural Cooperative Federation of India Marketing Federation (NAFED), along with State agencies from Karnataka, Haryana, Tamil Nadu and the northeastern States.