Establishment of Farmer Producer Organisations (FPOs)

In the Union Budget 2019-20, the Government announced formation of 10,000 new Farmer Producer Organisation (FPOs) to ensure economies of scale for farmers over the next five years. This was stated by Shri Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs, in a written reply to a question in Rajya Sabha.

Shri Thakur stated that pursuant to the budget announcement, the Government in the Department of Agriculture Cooperation and Farmers Welfare (DAC&FW) has approved a new Central Sector Scheme titled “Formation and Promotion of Farmer Produce Organizations (FPOs)” to form and promote 10,000 new FPOs with a total budgetary provision of ₹ 4,496 crore for five years (2019-20 to 2023-24) with a further committed liability of ₹ 2,369 crore for the period from 2024-25 to 2027-28 towards handholding of each FPO for five years from its aggregation and formation.

Shri Thakur further stated that the National Bank for Agriculture and Rural Development (NABARD) has reported that currently there are around 6,000 Farmer Producer Organisations (FPOs) existing in the country, which have been promoted by the Government, NABARD, State Government departments and Civil Society Organizations. Out of these FPOs, NABARD has promoted 4,317 FPOs, which include 2,154 FPOs supported out of Producers Organization Development and Upliftment Corpus (PRODUCE) Fund. During 2014-15, the Government had created PRODUCE Fund with a corpus of ₹ 200 crore in NABARD for the promotion of 2,000 FPOs in the country. Against the target of 2,000 FPOs, NABARD has sanctioned 2,154 FPOs as on 31.10.2019.