Centre plans to promote 250 new farmer-producer bodies in FY 2020-21

The Centre plans to promote 250 new farmer-producer organisations (FPOs) in the next financial year (2020-21). This is towards meeting its target of creating 10,000 new FPOs in the next five years, said Neelkamal Darbari, managing director of Small Farmers Agri-Business Consortium (SFAC). The consortium is one of the nodal agencies to promote FPOs. 

According to the new guidelines issued by the government, FPOs will have to have a minimum 300 members, down from the existing requirement of 1,000. Prime Minister Narendra Modi will kick-start the scheme at an event in Chitrakoot (Uttar Pradesh) on Saturday. 

Currently, the country has roughly 5,000 FPOs/farmer-producer companies (FPCs) of which almost 2,100 have been promoted by the National Bank for Agriculture and Rural Development (NABARD) in the last few years.

Sources said around 30 per cent of these are operating viably while 20 per cent are struggling to survive. The remaining 50 per cent are still in the phase of mobilisation, equity collection and business planning, among others.

The Union Cabinet last week sanctioned Rs 6,868 crore for the new FPO scheme.

That apart, it also cleared a credit guarantee fund of Rs 1,000 crore to be created in NABARD for FPOs and another Rs 500 crore in National Cooperative Development Corporation (NCDC) for enabling easy credit option to FPOs.

“We will have a three-tier structure for speeding up the promotion of 10,000 FPOs,” said Darbari.

She said the structure will have cluster-based business organisations (CBBOs), which will play the function of resource institutes (RIs) on the ground-level. But they will have much better professional expertise to be provided by people who are recruited from outside.

These CBBOs will then be manned and monitored by a National Project Management Agency (NPMA), comprising top sectoral experts, banks and management professionals, among others. On top of all these will be SFAC as nodal agency.

On CBBOs, Darbari said that the decision to appoint such organisations was taken to ensure cluster-based growth of FPOs in the country.

The CBBOs will work on the ground and could be business support organisations, trusts, societies, foundations, corporate CSR cells and ICAR-institutions like Krishi Vigyan Kendra, among others.

The typical work of RIs will be subsumed by the CBBOs which will undertake the required expanded scope of the work.  

At present, the RIs are the first line of support for the FPOs for all sorts of work, be it filing of returns, accessing markets, clearing regulatory hurdles and even mundane daily paperwork. Most of them are well-established social organisations and NGOs working in various fields.

“The RIs will continue to work for the already created 5,000 FPOs, but these CBBOs will only be for the new 10,000 FPOs,” Darbari said.

The CBBOs will also help in registration and training of FPOs, appointment of professional expertise, assist in regular interface with stakeholders, assist in facilitating traceability, market-linkage for products both local and global and also work with the state governments to ensure that FPOs get all the benefits that are accorded to cooperatives.

The CBBOs will be selected through an open national-level bidding process.

The NPMA will comprise separate teams such as technical and marketing units, incubation services provider teams and helpdesk teams, among others.  

The NPMA will not only assist in selecting the CBBOs and could be a global consulting firm with expertise in promoting agri-business start-ups, among others.

The credit guarantee scheme for FPOs is also being re-structured in the new model and is being raised by two times.