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Nearly 7,600 FPOs registered, 75% govt target, boosting farm productivity.
Dec 28, 2023

Nearly 7,600 Farmer Producer Organisations (FPOs) were registered in India till November 30 this year, almost 75 per cent of the government’s target to form and promote 10,000 such organisations across the country by 2024.
In 2020, the Government of India launched a scheme to form and promote 10,000 new FPOs by 2024 with a budgetary provision of Rs 6,865 crore. The scheme was aimed at enabling farmers to enhance their bargaining power, leverage economies of scale, reduce in cost of production and increase farmers’ incomes through the aggregation of their agricultural produce.
 
In a reply to a question during the winter session of Parliament, it was stated that as of November 30, 2023, about 7,597 FPOs have been registered in India, under the scheme. In Uttar Pradesh, around 1,150 FPOs have been registered, followed by Madhya Pradesh (566), Maharashtra (521), Punjab (475) and Bihar (474).  
It also quoted a study done by the National Bank for Agriculture and Rural Development (NABARD) in 2020-21 and 2021-22 on FPOs which showed an 18.75 per cent to 31.75 per cent increase in farm productivity for farmers associated with FPOs while their input cost reduced from Rs 50 to Rs 100 per bag of seed and fertiliser.
On their effectiveness, the NABARD study showed that collectivisation under FPOs did positively impact members, especially small and marginal farmers. It also said that primary producers through produce aggregation have enhanced their bargaining power. The study found that post-harvest losses were minimised and the FPOs helped farmers in storage facilities, enabling them to avoid distress sales of produce, and thereby ensuring better prices and an increase in income.
“Post-FPO formation, the annual income growth per acre was observed to be in the range of Rs 4,000 to Rs 30,500 in absolute terms and 14 per cent-60 per cent in relative terms,' the study findings were cited in the reply in Parliament.
 
The study also found that FPO membership translated into higher average price realisation for farmers in Kerala, Madhya Pradesh, Odisha and Rajasthan. “In Madhya Pradesh, the sampled farmers who had FPO membership registered an increase of 7.5 per cent in price realisation of produce in kharif (2019) and 12.5 per cent in rabi (2018) seasons. Similarly, in Kerala, the price realisation by FPO members increased by 45 per cent,' the study noted.
It also said aggregation of produce and bulk transport of inputs and outputs reduce marketing cost, thus, enhancing the net income of the producer, while activities like seed production, beekeeping, and mushroom cultivation with a higher margin than traditional business have resulted in higher income.
Under the FPO Scheme, the Centre provides financial assistance of 1.8 million per FPO for three years. A total of Rs 2.5 million is also given to the Cluster Based Business Organisations. The formation and promotion of FPOs are to be done through nine implementing agencies, such as the Small Farmers Agri-Business Consortium (SFAC), National Cooperative Development Corporation (NCDC) and NABARD. Implementing agencies engage CBBOs to aggregate, register and provide professional hand-holding support to FPOs for five years.
    
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