Farmer Producer Organizations (FPOs) and Promotion Scheme 2020

Farmer Producer Organizations (FPOs) and Promotion Scheme 2020

 Introduction:

Inauguration of Honey FPOs under the “Formation & Promotion of 10,000 FPOs” Scheme By Agricultural Minister of India.

 Issue: 

• Honey FPOs will help in achieving the goal of increasing income and Production quality of small farmers.
• In Budget 2019-20, the Government announced formation of 10,000 new Farmer Producer Organisation to Income income for farmers over the next five years.

AIM:

• To provide holistic supportive ecosystem to form new 10,000 FPOs to facilitate development of vibrant and sustainable income oriented farming for Farmers.
• To enhance productivity through efficient, cost-effective and sustainable resources utilisation.
• Realize higher returns through better liquidity and market linkages for their produce and become sustainable through collective action.
• To enhance management of FPO, inputs, production, processing and value addition, credit linkages and use of technology etc.
• To provide effective capacity building to FPOs to develop agriculture entrepreneurship skills to become economically viable.

Farmer Producer Organization (FPO):

• It includes farmer- producers’ organization incorporated/ registered either under Part IXA of Companies Act .
• These FPO’s are formed for the purpose of leveraging collectives through economies of scale in production and marketing of agricultural and allied sector.

ACTIVITIES UNDERTAKEN BY FPO’s:

(i) Supply quality production inputs like seed, fertilizer, pesticides and such other inputs at reasonably lower wholesale rates.

(ii) Make available need based production and post-production machinery and equipment like cultivators, tillers, sprinkler set , Drip irrigation system etc.

(iii) Make available value addition like cleaning, assaying, sorting, grading, packing etc. at user charge basis on reasonably cheaper rate.

iv) Undertake higher income generating activities like seed production, bee keeping, mushroom cultivation etc.

(v) Undertake aggregation of smaller lots of farmer-members’ produce; add value to make them more marketable.

(vi) Facilitate market information about the produce for judicious decision in production and marketing.

(vii) Facilitate logistics services such as storage, transportation, loading/un-loading etc. on shared cost basis.

(viii) Market the aggregated produce with better negotiation strength to the buyers and offering better and remunerative prices.

IMPLEMENTATION:

• Small Farmers Agri-business Consortium (SFAC)
• National Cooperative Development Corporation (NCDC)
• National Bank for Agriculture and Rural Development (NABARD).

BENEFITS:

• Farmers as members of the FPO will have better bargaining power to leveraged trading at competitive prices.
• Aggregation of agricultural produce for better marketing opportunities.

Trading in bulk saves farmers on associated expenditures like processing, storage, transportation etc. 

• FPOs may take up activities for value addition which fetch a higher price for the farmers’ produce.
• FPO formation facilitates utilization of pre and post harvest infrastructure like green houses, mechanized farming, etc.
• FPO can expand its business activities by opening of input stores, custom centres etc.

SIGNIFICANCE:

• 86% of farmers are small and marginal with average land holdings in the country being less than 1.1 hectares. They also face tremendous challenges in marketing their produce due to lack of economic strength.FPOs help in the collectivization of such small, marginal and landless farmers in order to give them the collective strength to deal with such issues.

FUNDING:

• A new Central Sector Scheme titled “Formation and Promotion of Farmer Produce Organizations (FPOs)” to form and promote 10,000 new FPOs with a total budgetary provision of Rs. 4496.00 crore for five years (2019-20 to 2023-24) with a further committed liability of Rs. 2369.00 crore for period from 2024-25 to 2027-28 towards handholding of each FPO for five years from its aggregation and formation.

Q.1 How many FPOs are formed under these scheme?

• 10000 FPOs
• 20000 FPOs
• 30000 FPOs
• 15000 FPOs

Q.2 Main Focus of FPOs Programme is on?

• Silk
• Jute
• Honey
• Paddy

Q.3 Who inaugurates FPOs Programme?

• President
• Prime Minister
• Agricultural Minister
• None of these

Q.4 How many budget is estimated for first term?

• 4496 crore
• 4000 Crore
• 5000 Crore
• None of these

Q.5 First term for FPOs?

• 2018-2020
• 2022-2024
• 2019-20 to 2023-24
• None of these