Agri Business

FPOs show the way of turning agriculture into a profitable venture

Radheshyam Jadhav Pune | Updated on February 10, 2021

Aggregation of small and marginal farmers in FPOs helped to enhance market linkages and improving their income.

More than 86 per cent of farmers in the country are small and marginal. But many of these small farmers have joined hands to form Farmer Producer Organisations (FPO), and in States like Maharashtra, they have turned agriculture into a profitable venture.

Aggregation of small, marginal and landless farmers in FPOs has helped enhance the farmers’ economic strength and market linkages for improving their income.


Inspired by the success of FPOs, the Centre has launched a new scheme titled ‘Formation and Promotion of 10,000 Farmer Produce Organisations (FPOs)’ with a clear strategy and committed resources with a budgetary provision of ₹6,865 crore.

Union Budget 2018-19 announced a 5-year tax holiday for FPOs with a turnover of up to ₹100 crore while Union Budget 2019-20 revealed the government’s intention to form 10,000 new FPOs over the next five years.

One District One Product cluster

The Ministry of Agriculture and Farmers Welfare on Tuesday reiterated the importance of FPOs which are to be developed in production clusters, wherein agricultural and horticultural produces are grown/cultivated for leveraging economies of scale and improving market access for members.

“One District One Product” cluster will promote specialisation and better processing, marketing, branding and export. During 2020-21, 2,200 FPO produce clusters have been allocated for the formation of FPOs, which also include specialised FPO produce clusters such as 100 FPOs for organic, 100 FPOs for oil seeds etc. Of these, 369 FPOs are targeted for formation during the current year in 115 aspirational districts.

Ravindra Kamble, a member of Rich Agri Farmer Producer Company, says that small farmers could survive only if they join hands. “ There should be better co-ordination and cooperation between FPC/ FPOs working in agriculture” he added.

The government has announced that FPOs will be provided financial assistance up to ₹18 lakh per FPO for three years. In addition to this, provision has been made for matching equity grant up to ₹2,000 per farmer member of FPO with a limit of ₹15 lakh per FPO and a credit guarantee facility upto ₹2 crore of project loan per FPO from the eligible lending institution to ensure institutional credit accessibility to FPOs.

Shailaja Narwade and other women farmers in Osmanabad who have started a producer company feel that the government’s initiative will help small farmers in a big way. “ More focus should be on creating a supply chain and find new markets. Women farmers will play a major role in collective farming,” she added.


Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on February 10, 2021
This article is closed for comments.
Please Email the Editor