India to set up 500 Farmer Produce Organisations by the end of March 2021

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In the wake of farmers’ continuing agitation, and after having formed the relevant guidelines five months ago, the government of India is planning to set up nearly 500 Farmer Produce Organisations (FPOs) by the end of March this year. The target is to facilitate rolling out of 10,000 such bodies across the country by FY24.

The agriculture ministry is under pressure to meet the target as the government wants to prove that changes can be brought about in the whole gamut of agriculture marketing after the reforms initiated through the three farm laws.

In an address to the Parliament of India, the prime minister had stated that many of the agriculture related schemes have been aimed at benefitting small and marginal farmers, who together constitute about 86% of total land-owning farmer households of 14.6 crore farmer families. As many as 68% of total farmers own less than one-hectare land, he stressed.

In February 2020, the Indian cabinet had approved the Rs 6,865 crore scheme to be spent for setting up of 10,000 new FPOs and ensuring their growth by FY28. While budgetary support of Rs 4,496 crore will be spent by FY24, an additional Rs 2,369 crore has been estimated for hand-holding of these FPOs until FY28.

The finance minister has allocated Rs 700 crore for FY22, up by 40% from FY21 for FPO scheme. So far, Rs 102 crore has been disbursed under the scheme. The scheme will help achieve the goal of doubling agricultural export to $60 billion by 2022 from an estimated $30 billion during FY18.

A hundred specialized FPOs for organic products and another 100 for oilseeds will also be set up. Nearly 370 FPOs will be formed in 115 aspirational districts. Under the scheme, FPOs will be provided direct financial assistance up to Rs 18 lakh each over 3 years. T

he Centre has allocated formation of 2,200 FPOs produce clusters for nine agencies — Small Farmers Agri-Business Consortium (SFAC), National Cooperative Development Corporation (NCDC), NABARD, Nafed, Tamil Nadu- SFAC, Haryana-SFAC, Watershed Development Department of Karnataka, Ministry of Rural Development and North Eastern Regional Agricultural Marketing Corporation (NERAMAC).

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