DAILY NEWS ANALYSIS

GS-III : Economic Issues Agriculture

28 July, 2021
3 Min Read

Farmer Producer Organizations(FPOs)

The government of India has approved and launched the Central Sector Scheme of “Formation and Promotion of 10,000 Farmer Producer Organizations(FPOs)” to form and promote 10,000 new FPOs till 2027-28 with a total budgetary outlay of Rs.6865 Cr.
Under the scheme, the formation and promotion of FPO is based on the Produce Cluster Area approach and the specialized commodity-based approach.
While adopting a cluster-based approach, the formation of FPOs will be focused on “One District One Product” for the development of product specialization.
Initially, one FPO is allocated per block. So far, a total of 4465 new FPOs produce clusters have been allocated to Implementing Agencies for the formation of FPOs, of which a total of 632 no. of FPOs have been registered.
Critical Analysis:
1. Sale through Farmer Producers Companies (FPCs) has resulted in increased price realization by members by 22%,
2. The incidence of cost of marketing is 31% lower than in other channels.
3. 28 per cent of members have purchased inputs from PCs and it has resulted in net savings of Rs.1384 per acre.
Under the Central Sector Scheme for formation and promotion of FPOs, the Farmer Producer Organizations (FPOs), provision has been made for financial assistance up to Rs 18.00 lakh per FPO for a period of 03 years for meeting the FPO management cost. Under the new FPO scheme, the Department of Agriculture & Farmers Welfare(DA&FW) makes advance release to the Implementing Agencies for formation and promotion of FPOs.

Source: PIB

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