The trend of an increasing number of small and marginal farmers becoming shareholdings in farmer producer organisations (FPOs) has boosted local aggregation and reduction in cost of production by achieving economies of scale, a senior government official said.
In the last five years, over 5.74 million farmers have taken equity in more than 10,000 FPOs, formed under the central scheme launched in 2020.
Women farmers have 39% share in these collectives, while farmers having small and marginal land holdings constitute about 88% of the total farmers who have stake in FPOs.
Six states account for over 50% shareholders, says agriculture ministry
Of the total shareholders, Telangana (0.74 million), Uttar Pradesh (0.69 million), Andhra Pradesh (0.61 million), Madhya Pradesh (0.36 million), Maharashtra (0.34 million) and Bihar (0,33 million) account for over 50%, according to the agriculture ministry.
“Increase in shareholding in FPOs has also led to collectivisation of small and marginal farmers while members farmers get agri inputs, including fertilisers, crop protection products and equipment at economical cost,” an official told FE.
These collectives have reported business turnover of over Rs 9000 crore in FY25. The cumulative turnover of these FPOs since the launch of the scheme has crossed Rs 20,000 crore.
In FY25, 350 FPOs crossed Rs 5-crore sales turnover while over 1,313 farmers collectives reported sales in excess of Rs 1 crore. The cumulative turnover of these FPOs has crossed Rs 20,000 crore.
Over 6052 FPOs have seed licence while more than 6,061 farmer collectives have licence to distribute fertilisers. In addition, 4560 FPOs have dealerships for distribution of pesticides, which ensures that the benefit of dealer discount is passed on to member farmers.
For sustaining these collectives, the government provides a matching equity grant of up to Rs 2,000 per farmer member of the FPO, with the maximum limit being Rs 15 lakh per collective.
According to an official, over 1100 FPOs have received the entire matching grant of Rs 15 lakh per collectives so far from the ministry.
The scheme for formation of 10,000 FPOs with a budgetary provision of Rs 6,865 crore for the five years five year ago while the financial support under the scheme will continue till the end of FY27.
Under the scheme, the government provides financial assistance of up to Rs 1.8 million per FPO for a period of three years.
Over 5,800 farmers’ collectives across various states are now able to sell unique agricultural products including rice, pulses, millets, honey, mushrooms, spices, and value-added products on the government’s e-commerce platform — Open Network for Digital Commerce (ONDC).
FPO’s tap GeM, Amazon, Flipkart : 680 trade on NCDEX
Over 200 collectives are selling their products on platforms such as Government e Marketplace (GeM) while sales of agri products have also commenced in a significant way via Amazon and Flipkart.
According to an official, 680 FPOs are currently participating in commodity bourse- National Commodity and Derivatives Exchange (NCDEX) to sell their assorted farm goods which has led to higher price realisation for their members through hedging.
These collectives were registered under several provisions such as the Companies Act, 2013 (farmer producer companies), cooperative societies Acts of the states or the multi-state cooperative society Act.
Several collectives formed in the last five years under the central sector scheme have also carried out procurement of oilseeds, pulses and grain under the minimum support price.