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New Agricultural Era with Farmer Producer Companies/Organizations

Simply a hybrid between cooperative societies and private limited companies can be identified as the Farmer Producer Company (FPC). FPCs are also called as Farmer Producer Organizations (FPO). Lack of bargaining strength of farmers is a problem when deal with agricultural marketing. So with the aim of improving bargaining strength of farmers in to a collective, FPC concept has been created.

Source: Istockphoto.com

FPC is registered under Companies Act 1956 (amended in 2002) to cater with the needs of farmers from the grass root level. This Act regulates the activities of agriculture such as production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export, promoting mutual assistance, welfare measures, financial services, and insurances. Although FPC is also a format of aggregate of farmers, it gives much more benefits comparatively. There are guidelines for formation of FPCs that have been issued by government and non-government agencies. In order to form a FPC, you must have to follow those guidelines.


What Benefits We Get from FPCs


They provide required technical and managerial assistance for almost all the requisite work including forwards backwards linkages, Seed production, value addition of agriculture produces, branding, etc. It makes the business more sustainable and profitable.

FPCs make their services available for farmer members at right time and at a fair price. These FPC services help to maximize the profit margins of the company by diverting produce surplus from the local trader to the producer organization

Source: Pixabay.com

Today we are highly expecting for a change in economic system of India. FPCs can be identified as a best possible way to achieve that, because they can act as catalysts of change.

FPC/FPOs act as a platform to facilitate the access to government services like scholarships, pensions, PDS, etc. So drinking water, sanitation, health, and hygiene programs can be conducted through FPCs.


Government Support

Since FPC/FPOs have emerged as aggregators of farm produce and link farmers directly to the market, the government has decided to provide matching equity grants to leverage working capital from financial institutions.

Source: Needpix.com

The Government of India has launched some schemes for supporting FPC/FPOs.

Union budget 2018-19 has specially focuses on promote and strengthen FPOs and help FPOs to achieve prosperous and sustainable agriculture sector. Also it promotes efficient, cost effective, and sustainable resource utilization.

The government reduces the 100% tax for FPOs with an annual income of up to Rs.100 crores to encourage aggregation of farmers for FPOs.


Successful Stories (Best FPOs in India)




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