Recently, the Ministry of Agriculture & Farmers Welfare held the National Conference of Cluster Based Business Organization’s (CBBOs). This was under the Central Sector Scheme of Formation and Promotion of 10,000 Farmer Producer Organisations (FPOs). Among the key topics were government policies and interventions, agricultural marketing and pricing, and the importance of FPOs.
The Scheme of Formation & Promotion of 10,000 FPOs
Launched in February 2020 at Chitrakoot, Uttar Pradesh, this scheme involves a budget provision of Rs. 6865 crores. The scheme has allocated more than 2200 FPOs to produce clusters for 2020-21. Implementing Agencies (IAs) are employing Cluster-Based Business Organizations (CBBOs) to register and provide professional support to each FPO for five years. By doing so, a platform has been created which provides end-to-end knowledge for all matters related to FPO promotion.
Financial Support and Assistance
The scheme provides financial aid up to Rs. 18.00 lakh per FPO for a period of three years. There is also a provision for matching equity grants up to Rs. 2,000 per farmer member of FPO with a limit of Rs. 15.00 lakh per FPO. Additionally, a credit guarantee facility of up to Rs. 2 crores for project loan per FPO from eligible lending institutions is also provided.
Significance of the Scheme
This scheme aims to increase farmers’ income, promote better marketing and value addition infrastructure, and make farming more feasible by aggregating land. More than 5.87 lakh farmers have been mobilized, with about 3 lakh registered as shareholders of FPOs.
Need for Other Initiatives
Apart from this, a plethora of initiatives have been launched for farmers. These include National Mission for Sustainable Agriculture, Pradhan Mantri Krishi Sinchayee Yojana, Rashtriya Krishi Vikas Yojana (RKVY), Nutrient Based Subsidy (NBS) Programme, Rashtriya Gokul Mission, Pradhan Mantri Fasal Bima Yojana and Paramparagat Krishi Vikas Yojana.
Understanding Farmer Producer Organizations (FPOs)
FPOs are voluntary organizations controlled by their farmer-members who actively participate in setting their policies and making decisions. They are open to all people able to use their services and willing to accept the responsibilities of membership. Some FPOs in Gujarat, Maharashtra, Rajasthan and other states have shown promising results and have been able to realize higher returns for their produce.
The Role of Resource Agencies and CBBOs
Support for these organizations comes from promoting institutions or resource agencies (RAs). The Small Farmers’ Agribusiness Consortium (SFAC) is one such agency providing support for the promotion of FPOs. The role of CBBOs should be to strengthen FPOs so that farmers seek them out.
Challenges and the Way Forward
Indian agriculture, characterized by small and marginal farmers with average land holdings size of less than 1.1 ha, faces numerous challenges. Collectivization of farmer producers through FPOs can address some of these challenges and enhance their incomes.
