New Central Sector Scheme titled ‘Formation and Promotion of 10,000 Farmer’s Produce Organisation launched

The Ministry of Agriculture has said that the government has  launched a new Central Sector Scheme titled ‘Formation and Promotion of 10,000 Farmer Produce Organizations (FPOs)’ and it has committed resources in this regard with a budgetary provision of Rs 6,865 crore. The Ministry in a statement said that FPOs are to be developed to produce clusters, wherein agricultural and horticultural products are grown for leveraging economies of scale and improving market access for members. 


It said, under this Central Sector Scheme with funding from Government of India, formation and Promotion of FPOs are to be done through implementing agencies and at present, nine such agencies have been finalized. It said, implementing agencies will engage Cluster- Based Business Organizations (CBBOs) to aggregate, register and  provide professional handholding support to each FPO for a period of five years.  CBBOs will be the platform for an end to end knowledge for all issues related to FPO promotion. 


The Ministry said, FPOs will be provided financial assistance upto Rs 18 lakh per FPO for a period of three  years. In addition to this, provision has been made for matching equity grant up to two thousand rupees per farmer member of FPO with a limit of 15 lakh rupees per FPO and a credit guarantee facility upto Rs two crore of project loan per FPO from eligible lending institutions to ensure institutional credit accessibility to FPOs.


The Ministry said, formation and promotion of FPOs is the first step for converting Krishi into Atma Nirbhar Krishi. This will enhance cost-effective production and productivity and higher net incomes to the members of the FPO. It will also improve rural economy and create job opportunities for rural youths in villages itself and this was the major step towards improving farmers’ income substantially.