Of over 10,000 farmer producer organisations (FPO) set up under a special incentive scheme launched in FY21, over 340 have grown to report annual sales turnover of over Rs 10 crore, among nearly 1,100 that have business in excess of Rs 1 crore, according to data gathered by the Union agriculture ministry.
Digital Platforms Fuel Growth
The high-growth FPOs have boosted their profiles making good use of government platforms like Open Network for Digital Commerce (ONDC), electronic national agriculture market (e-NAM), and the government e-marketplace (GeM).
Several farmers’ collectives formed in the last five years through the central sector scheme have also carried out procurement of oilseeds, pulses and grain under minimum support price (MSP) to boost their businesses.
“We are discussing ways to reward the high-performing FPOs so that other such organisations too get encouraged to boost their business prospects,” an official said.
Over 9,000 FPOs are currently on board the government’s e-commerce platform ONDC. Over 200 collectives are selling their products on platforms such as GeM while sales of agri-produce have also commenced in a significant way via Amazon and Flipkart.
Gujrat-based Babra Khedut Utpadak & Rupantar Sahakari Mandli, an FPO , with 1,465 members, have reported a sales turnover of Rs 102 crore thanks to procurement of groundnut and cotton at MSP from its members on behalf of the government agencies. “We will be expanding our agri-inputs business in the current fiscal year to boost turnover further,” Nirav Prakashbhai Mathukiya, CEO of the group, told FE.
Incentives and Infrastructure
At present, the more active FPOs ollectives sell thousands of unique agricultural and allied sector products including 200 varieties of rice, pulses, millets, honey, mushrooms, spices, and value-added products across platforms.
To boost business prospects, FPOs are being granted various input licences and dealerships in seed, pesticide and fertilisers. This enables them to run input businesses too and improve financial viability.
FPOs are registered under several provisions such as the Companies Act 2013, Cooperatives Societies Act of respective states or under the Multi-State Cooperative Society Act. These entities also avail financial assistance from various schemes including the agriculture infrastructure fund and agricultural marketing infrastructure.
Under the ministry of agriculture’s initiative to connect corporate buyers with FPOs, through a series of webinars, direct discussions have been held with leading buyers of commodities including Olam International, Big Basket, Britannia, Flipkart, Country Delight, NCCF. Mother dairy and agencies including GeM, Agricultural Processed Food Products Exports Development Authority (APEDA), farmers’ cooperative Nafed and Selco foundation.
A senior official said the financial assistance and marketing support to these collectives, where over 3 million farmers have equities, would continue till FY26. Most of the FPOs under the scheme have been formed in the last couple of years.
The scheme is aimed at enhancing collective bargaining power of farmers through local aggregation and reducing cost of production through leveraging economies of scale, financial assistance up to Rs 18 lakh per FPO for a period of three years.
In addition, provision has been made for matching equity grants up to Rs 2,000 per farmer member of an FPO with a limit of Rs 15 lakh per collective. Credit guarantee facility upto Rs.2 crore loan from eligible lending institutions for these collectives.
The scheme also entails a credit guarantee facility up to Rs 2 crore of project loan per FPO while Rs 25 lakh per FPOs is provided to cluster-based business organisations for five years to boost marketing of products.
The scheme has a budgetary provision of Rs 6,865 crore for the five years since FY21, and will run through FY26.