Government has achieved a significant milestone by registering 10,000 Farmer Producer Organizations across the country under its flagship Central Sector Scheme for their formation and promotion

The Government has achieved a major milestone with the registration of 10,000 Farmer Producer Organisations (FPOs) across the country under its flagship central sector scheme for their formation and promotion.As per official data, 1,175 FPOs have been formed with 100% women membership, highlighting a strong push towards gender inclusion.Additionally, around 23.55 lakh women farmers have been brought under the scheme nationwide.

Central Sector Scheme for Formation and Promotion of 10,000 FPOs

¨     It was launched by Prime Minister Shri Narendra Modi on 29th February 2020 with a budget outlay of ₹6,865 crore till 2027–28.

Aims and Objectives of the Scheme

¨     To provide a holistic and broad-based supportive ecosystem to form new 10,000 FPOs to facilitate the development of vibrant and sustainable income-oriented farming and for the overall socio-economic development and well-being of agrarian communities.

¨     To enhance productivity through efficient, cost-effective and sustainable resource use and realize higher returns through better liquidity and market linkages for their produce and become sustainable through collective action.

¨     To provide handholding and support to new FPOs up to 5 years from the year of creation in all aspects of management of FPO, inputs, production, processing and value addition, market linkages, credit linkages and use of technology, etc.

¨     To provide effective capacity building to FPOs to develop agriculture entrepreneurship skills to become economically viable and self-sustaining beyond the period of support from the government.

Financial Assistance and Support

¨     Under the scheme, each new FPO receives handholding support for five years, along with financial assistance of ₹18 lakh for management costs for 3 years.

¨     Additionally, a matching equity grant up to ₹2,000 per farmer member (maximum ₹15 lakh per FPO) and a credit guarantee facility up to ₹2 crore of project loan from eligible lending institutions are provided to ensure institutional credit accessibility.

Key Initiatives under the Scheme

¨     Credit Guarantee Fund (CGF): A dedicated fund has been established to facilitate access to institutional credit for FPOs. It provides credit guarantee cover to financial institutions, encouraging them to extend loans for input collectivisation, working capital, marketing, and service delivery, thereby strengthening the financial base of FPOs.

¨     Integration with ONDC Platform: Nearly 5,000 FPOs have been onboarded onto the Open Network for Digital Commerce (ONDC) to enable nationwide online sale of agricultural produce. This initiative enhances market access, digital marketing capabilities, online payments, and B2B/B2C transactions, empowering farmers to connect directly with buyers across India.

¨     Conversion of FPOs into CSCs: An MoU between CSC SPV and the Ministry of Agriculture & Farmers’ Welfare aims to convert 10,000 FPOs into Common Services Centres (CSCs). This enables FPOs to deliver citizen-centric digital services via the Digital Seva Portal, while also generating rural employment opportunities.

¨ Inclusive Membership Promotion: The scheme emphasizes inclusion by ensuring participation of small and marginal farmers, women farmers and SHGs, SC/ST communities, and other economically weaker sections, making FPOs more equitable, representative, and socially impactful.

Farmer Producer Organisation (FPO)

¨     It is a collective of farmers, registered either under Part IXA of the Companies Act or under the Co-operative Societies Act of the concerned states, formed to leverage economies of scale in production and marketing. 

¨     The concept is based on collectivization, where farmers pool their resources and efforts to gain better access to inputs, technology, finance, and markets.

¨     To facilitate this, the Small Farmers’ Agribusiness Consortium (SFAC) was mandated by the Department of Agriculture and Cooperation to support state governments in the formation and promotion of FPOs.

¨  The scheme focuses on enhancing productivity through efficient, cost-effective, and sustainable resource use, thereby increasing farmers’ income and reducing the cost of cultivation.