Overview of Central Govt Scheme to Promote 10000 FPOs

farmers
Farmer Producer Companies are organisations owned by farmers, aimed to pool resources to generate higher income through collective efforts. This article is an overview of central government's scheme to promote 10000 FPOs in the country.

Objective

Promotion of 10000 FPOs in next 5 years, 15% FPOs to be in aspirational districts and 1 FPO in each block of aspirational districts.

Implementing Agency

SFAC, NCDC and NABARD designated as Implementing Agencies. SFAC will cover FPOs registered under Company Act, NCDC covers FPO registered as cooperatives and NABARD covers both. Any state can approach DAC&FW to nominate any other agency as implementing agency/organization in concerned territory. DAC&FW will also identify other agencies in due course of time.

Activities

FPOs may provide following service(s) for farmer’s development as may be necessary: Input Supply, Machinery and Equipment, Processing, Storage and Transportation facilities, Higher Income generating activities like bee keeping, seed production, aggregation, facilitate market information, logistics services, marketing.

Size

Minimum strength of 300 FPO members (100 in hilly areas) needed  to avail benefits, encouraged to have around 500 members. Farmer Interest group of 15-20 federated to form FPO located within same cluster(called as Producer Cluster Area in guideline). Existing FPO can avail benefit if not taking any GOI assistance.

Implemetation Framework

Three tier structure to be adopted involving Implementing Agency, National Program Management Agency(NPMA) and Cluster Based Business Organisations(CBBO). NPMA will be set up in SFAC office and will serve as control center of the entire project, covering even non-SFAC FPO projects.

Roles and Responsibilities

DAC&FW: Outcome based monitoring, guidance, coordination

Implementing Agency: Program Implementation, Selection of NPMA, CBBOs, Monitoring of CBBO

NPMA: (analogous to FDRVC) A consulting firm with expertise in promoting agri-business value chains. Major role in program management, identification of clusters, selection of CBBO, linkage with research institutes, technical assistance to implementing agency, maintaining data repository

Cluster Based Business Organisations: (analogous to TSA)Any organisation, trust, society, NGO having demonstrated capability in FPO promotion. Role involves major on the ground activities like mobilisation, training, business plan preparation and baseline survey, reporting. One state can have one or more than one CBBO. A CBBO can serve multiple state too. It should have 5 specialists: i) Crop husbandry ii)Agri marketing/Value Addition iii)Mobilisation iv)Law and Accounts v)IT/MIS. Intital period of engagement will be 3 yrs which can be extended later.

Targets

Year-wise indicative target to be assigned by Project Management Advisory and Fund Sanctioning Committee (N-PMAFSC) based on expertise.

Business Plan

Business plan and budget for 18 months to be submitted to avail benefits.

Funding

Equity Grant-Equity grant matching farmers contribution in share capital, limited upto Rs 15 lac per FPO.

Management Support-Max Rs 18 lac per FPO. Provision for each head also have individual limits e.g. provision for salary of CEO is Rs 25000 per month and accountant is Rs 10000 per month.

Credit Guarantee: An FPO borrowe can avail credit guarantee max twice over 5 yr period. For loan upto Rs 1cr, 80% cover will be provided. For Rs1-Rs2 Cr loan, 75% cover is provided. The fund is maintained by NABARD and NCDC

Supervision Charges for IAs: 3% of annual expenditure given upfront. 2% given later based on performance assessment, as supervision charges.

Ajay Rawat

Ajay Rawat

Ajay leads Lucknow regional team of FDRVC. His key focus areas is development of artisan clusters.

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Overview of Central Govt Scheme to Promote 10000 FPOs

Farmer Producer Companies are organisations owned by farmers, aimed to pool resources to generate higher income through collective efforts. This article is an overview of central government’s scheme to promote 10000 FPOs in the country.

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