The state governments have worked out an innovative way to utilise funds allocated to them by the centre under the flagship scheme of Rashtriya Krishi Vikas Yojana (RKVY). The states have roped in the society formed by Department of Agriculture, Small Farmers’ Agri- business Consortium (SFAC) to promote the formation of farmer producer organisations (FPOs) to mobilize FPOs in their respective states. For this, part of RKVY funds will be set aside for SFAC to utilise in his mobilization work. The special drive has been taken up to utilise RKVY funds in meeting the agricultural productivity owing to the demand under the Food Securities Bill. Some of the states who have already initiated the move are Madhya Pradesh, West Bengal, Sikkim, and Kerala. The FPOs in various states will be formed in different sectors like agriculture produce, diary and animal husbandry, poultry. The mandate is to form FPOs of 1000 formers per village and assist them in registration, collection of the produce, providing market linkages, technology inputs and catering to post harvest needs. The SFAC will assist the FPOs as a venture capital for which there is a venture capital scheme.
Under this scheme, the SFC will assist the states in setting up FPOs as agri business ventures in close association with all banks/financial institutions, to mobilise private investment in setting up of agribusiness projects and thereby providing assured market to producers for increasing rural income & employment. Besides, the FPOs will also be trained to strengthen backward linkages of agribusiness projects with producers, to assist farmers, producer groups, and agriculture graduates to enhance their participation in value chain etc. RKVY is a central assistance scheme introduced to incentivize States to draw up comprehensive agriculture development plans taking into account agro-climatic conditions, natural resources and technology for ensuring more inclusive and integrated development of agriculture and allied sector. Under this mandate the allied sectors over and above conventional agriculture who are eligible for expenditure under RKVY are crop husbandry (including Horticulture), animal husbandry and fisheries, dairy development, agricultural research and education, forestry and wildlife, plantation and agricultural marketing, food storage and warehousing, soil and water conservation, agricultural financial institutions etc. Meanwhile, for the FPOs, the agri ministry has come up with an equity grant and credit guarantee fund to promote the development of farmer producer organisations (FPO). Equity guarantee scheme has been allocated an amount of Rs 50 crore for lending support to the equity base of FPOs. Similarly, to provide cover to banks over advance loans to FPOs, an initial corpus of Rs 100 crore has been set aside to set up the credit guarantee.