National Bank for Agriculture and Rural Development

The National Bank for Agriculture and Rural Development (NABARD) has dedicated Rs 1000 crores fund to provide credit guarantees to around 10,000 farmer producer organisations (FPOs).This dedicated fund will be housed under the “Credit Guarantee Fund Trust for FPOs” (CGFTFPO), under the trusteeship of NABSanrakshan Trustee Private Limited (NTPL).CGFTFPO Trust has been signed by officials of Ministry of Agriculture & farmers welfare and NABSanrakshan of NABARD and has been registered at Mumbai.

NTPL is a subsidiary and is wholly owned by NABARD.

Formation and Promotion of FPOs Scheme

• Central government had launched a new central sector scheme called “Formation and promotion of 10000 FPOs” in February 2021.
• This scheme was launched with a clear strategy and committed resources for promoting 10000 new FPOs in India. Rs 6865 has been allocated to this scheme.

The CGFTFPO

• It is only the second such Trust formed in agriculture and allied sector in order to provide credit guarantee.
• Credit guarantee offered by means of Trust will help in enhancing the credit worthiness of FPOs. It will also facilitate for cost-effective production and productivity which in turn will led to higher net income for the farmers who are members of FPOs.

Development of FPOs

• As per Ministry of Agriculture & Farmers Welfare, FPOs will be developed in produce clusters.
• While agricultural produce and horticultural produce are grown to leverage economies of scale.
• It will also help in improving market access for members.