CCentral Sector Scheme of Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)

Source: PIB

Subject: Government Scheme

Context: The Government of India has completed the formation of 10,000 Farmer Producer Organisations (FPOs) under a central sector scheme, with 21.96 lakh women farmers.

About Central Sector Scheme of Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs):

What it is?

• A central sector scheme to form and nurture 10,000 new FPOs across India, enabling small and marginal farmers to collectivise production, processing, and marketing for better incomes and market power.

Launched in: 29 February 2020

Implementing Agencies (IAs):

• Small Farmers’ Agribusiness Consortium (SFAC) National Bank for Agriculture and Rural Development (NABARD) National Cooperative Development Corporation (NCDC) National Agricultural Cooperative Marketing Federation of India (NAFED)

• Small Farmers’ Agribusiness Consortium (SFAC)

• National Bank for Agriculture and Rural Development (NABARD)

• National Cooperative Development Corporation (NCDC)

• National Agricultural Cooperative Marketing Federation of India (NAFED)

Aim: To build a sustainable, income-oriented farming ecosystem by strengthening farmer collectives, improving access to inputs, credit, technology, value chains, and markets, and enhancing farmers’ bargaining power.

Key features:

• Cluster & commodity approach: Produce-cluster-based formation aligned with One District One Product (ODOP).

• Financial support: Up to ₹18 lakh/FPO (3 years) for handholding Matching equity grant up to ₹15 lakh/FPO (₹2,000 per farmer) Credit guarantee up to ₹2 crore project loan per FPO

• Up to ₹18 lakh/FPO (3 years) for handholding

• Matching equity grant up to ₹15 lakh/FPO (₹2,000 per farmer)

• Credit guarantee up to ₹2 crore project loan per FPO

• Market linkage: NAFED-led forward linkages and value-chain integration.

• Capacity building: Structured training via BIRD (Lucknow) and LINAC (Gurugram).

• Inclusion focus: Strong participation of women farmers and coverage of aspirational districts.

Significance:

• Empowers small & marginal farmers (≈86%) through economies of scale.

• Higher incomes & lower costs: Evidence shows ~22% higher price realisation and ~31% lower marketing costs via FPO channels.