The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave its approval for a scheme for the formation of 10,000 Farmer Producer Organizations (FPOs) in 5 years to make sure economies of scale for farmers.
The new Central sector scheme titled ‘Formation and Promotion of Farmer Produce Organizations (FPOs) is geared toward forming and selling 10,000 new FPOs with a complete budgetary provision of Rs 4,496 crore for 5 years.
The scheme has the legal responsibility of Rs 2,369 crore for a interval from 2024-25 to 2027-28 in direction of handholding of every FPO for 5 years from its aggregation and formation.
Initially there might be three implementing companies to type and promote FPOs — Small Farmers Agri-business Consortium (SFAC), National Cooperative Development Corporation (NCDC) and National Bank for Agriculture and Rural Development (NABARD).
It is focused to finish formation of the FPOs between the interval from 2019-20 to 2023-24, Union Agriculture Minister Narendra Tomar instructed media after the choice was taken within the CCEA assembly chaired by Prime Minister Narendra Modi.
Through formation of FPOs, Mr Tomar mentioned farmers could have higher collective power for entry to high quality enter, know-how, credit score and advertising entry by means of economies of scale for higher realization of earnings.
The transfer was taken as small and marginal farmers would not have financial power to use manufacturing know-how, providers and advertising, together with worth addition, the Minister mentioned.
States may, if that’s the case desired, nominate their implementing company in session with DAC&FW division underneath Agriculture Ministry. The DAC&FW will allocate cluster and states to implementing companies which, in flip, will type the Cluster Based Business Organization (CBBO)within the states.
FPOs might be shaped and promoted by means of CBBOs engaged on the state or cluster stage by implementing companies. The CBBOs could have 5 classes of specialists from the area of crop husbandry, agri advertising or worth addition and processing, social mobilisation, legislation and accounts and Information Technology or Management of Information System.
These CBBOs might be a platform for an end-to-end information for all points in FPO promotion. There might be a National Project Management Agency (NPMA) at Small Farmers’ Agribusiness Consortium (SFAC) for offering total challenge steerage, knowledge compilation and upkeep by means of built-in portal and Information administration and monitoring.
Initially the minimal variety of members in FPO might be 300 in plain space and 100 in North East and hilly areas, a Cabinet assertion mentioned.
“However, DAC&FW may revise the minimum number of membership based on experience and need with approval of Union Agriculture Minister.”
Priority might be given for formation of FPOs in aspirational districts within the nation with not less than one FPO in every block of aspirational districts. FPOs might be promoted underneath ‘One District One Product’ cluster to advertise specialization and higher processing, advertising, branding & export by FPOs.
There might be a provision of fairness grant for strengthening fairness base of FPOs. There might be a Credit Guarantee Fund of as much as Rs 1,000 crore in NABARD with equal contribution by DAC&FW and NABARD and Credit Guarantee Fund of Rs 500 crore in NCDC with equal contribution by DAC&FW and NCDC for offering appropriate credit score assure cowl to speed up the circulation of institutional credit score to FPOs by minimizing the chance of economic establishments for granting mortgage to FPOs.
“States and Union Territories will be allowed to avail loan at prescribed concessional rate of interest under Agri-Market Infrastructure Fund (AMIF) approved for set up in NABARD for developing agriculture marketing and allied infrastructure.”
The report of ‘Doubling of Farmer’s Income (DFI)’ has emphasised this reality and advisable formation of seven,000 FPOs by 2022 in direction of convergence of efforts for doubling the farmers’ earnings, the assertion mentioned.
In the Union Budget 2019-20, the federal government has introduced the creation of 10,000 new FPOs to make sure economies of scale for farmers over the following 5 years, for which a devoted supporting and holistic scheme as Central Sector Scheme is proposed for focused improvement of FPOs and its sustainability.