FARMER PRODUCER ORGANISATIONs(FPO)

Presented By Presented To

Narender Singh Dr. Amit Singh

PGDFM -2020 Aga khan Rural Support programme
Background
●Agriculture has always been a lifeline of the Indian economy, providing livelihood to millions of
farmer.

●The Agriculture sector currently contributes nearly 14 percent of total GDP, while still accounts
for about 55 percent of total employment.

●The marginal and small farm holdings together accounted for a whopping 85.0 percent of the
total farm holdings in India in 2010-11.

●The growth rate of agriculture in India over the last decade has been stagnating and has gone
down to 1.8% in 2006.
What is FPO And Its Features
● A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk
producers, fishermen, weavers, rural artisans, craftsmen.

● A producer company is basically a corporate body registered as a Producer Company under

Companies Act, 1956 (As amended in 2002).

● There cannot be any government or private equity stake in the producer companies, which implies
that PC cannot become a public or deemed public limited company.

● Minimum number of producers required to form a PC is 10, while there is no limit for maximum
number of members and it can be increased as per feasibility and need.

● NABARD, SFAC, Government Departments, Corporates and Domestic & International Aid Agencies
provide financial and/or technical support to the Producer Organisation.
Why do we need FPO
● There is a need for aggregation of farmers in order to benefit from economies of scale.

● The size of operational holdings in India is continuously declining with every successive generation.
The situation has raised serious question on the survivability of these small holders.

● It help in reducing the transaction costs and provide a forum for members to share information,
coordinate activities and make collective decisions.

● FPOs have the potential to give farmers better bargaining power and create a more transparent
agri-market.
FPO promotion and Development Process
How it helps farmers
The Junnar Taluka Farmer Producer Organization and Producer Company
Case Study
A Case Study of Bhangar Vegetable Producers’ Company
Challenges faced by FPO

● There are thousands of FPOs in the country but only a few are successful and are making money.

● These organizations face challenges such as funding, capacity building and value chain

investments.

● Domestic policies and laws also needed to be addressed for growing the FPOs.

● The success of FPO will also depend on other players such as Banks, Retailers and Corporate

sector. The value chain required for the development of FPOs cannot be done by one player.
Conclusion

● As majority of the marginal and small farmers are facing a great suppression by the middle men/

commission agents for remunerative price and profitable income, FPO could be an ultimate solution to the

problem.

● More and more contribution from the promoting institutions is of utmost need for education, business

planning and market linkage with various national and international companies.

● A support from the policy makers in running the FPO will be a great boon to the farming community.

● The farmers must encourage their children to involve more in agriculture to induce a loving spirit and

passion for agriculture.

References

●https://www.nabard.org/demo/auth/writereaddata/File/FARMER%20PRODUCER%2

0ORGANISATIONS.pdf

●https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2972488

●https://www.researchgate.net/publication/339850687_Farmer_Producer_Organizatio

n_FPO_the_need_of_the_hour/link/5e6941ad92851c20f321e4c2/download

●https://mofpi.nic.in/sites/default/files/fpo_policy_process_guidelines_1_april_2013.p

df
Thank You