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Promotion of Farmers Producers Organizations (FPOs)

What are Farmers Producers Organizations (FPOs)?

A Farmer Producer Organization is a legal entity formed by the primary producers like farmers, milk producers, fishermen, rural artisans etc. The main objective of a FPO is to ensure better income to its members through marketing of their produces as well as by providing them important services related to their agriculture. In a country like India where most of the farmers are small and marginal farmers, FPO has become more important to enable them to access to the national and global market as well as to access to various important services. In this regard, Govt. of India amended its companies act of 1956 to enable the farmers and primary producers also to form their business organizations under this act.

Our Activities:

As SVA, since its inception, has been working primarily with the small and marginal farmers immediately after the new act was formed in the year 2002-03, it promoted one of the first FPOs at national level which was named as “Just Change India Producer Company Limited”. The objective was to federate various producer groups working in different states to collectively undertake marketing of their produces. However, subsequently SVA learned that Farmers Producer Organizations should be formed in small geographical areas and with a limited number of members or shareholders so that it can be managed more effectively. Hence, in the year 2011 the second FPO was registered in the name of “Odisha Producer Company Limited (OPCL)”. Even though it was registered taking members at state level, it confined its business activities mostly to Nuapada and Kalahandi districts of Western Odisha.

Promoting FPOs in collaboration with NABARD:

In the year 2014, when Govt. of India set up a Produce Fund under NABARD and decided to promote 2000 new FPOs the regional office of NABARD, Bhubaneswar requested SVA to become one of the Producer Organization Promoting Institution (POPI) and during 2014-15, SVA promoted 40 new FPOs spread over different districts. Since then SVA has been providing various trainings and hand holding support to these FPOs so as to work independently within a few years. After seeing the initial success of those FPOs, SVA with support from NABARD has promoted additional 13 FPOs in Kalahandi, Nuapada, Sambalpur and Deogarh districts.

Major Achievements so far:

Even though 4-5 years is too short a time to make an assessment of the FPOs, the initial sign of most of the FPOs indicates a very bright future for the farmers who are associated with those FPOs. In all the FPOs, number of shareholders have been in the range of 300-1100 and it is expected that on an average each FPO shall have 1000 active members by the end of 6 years of their formation.

One of the common activities of the FPOs is management of input business in which they are providing good quality seeds, fertilizers, pesticides and other inputs to the farmers at reasonable price near their place and on time. The other important activities taken up by the FPOs are aggregation of produces like paddy, pulses, vegetables, mango, cotton, onion, turmeric, chillies etc. and marketing by which the middle-men have been eliminated to a great extent. A few FPOs like OPCL have also ventured into processing of few produces like spices, millets, pulses and directly selling to the consumers.

To take advantage of the e-Nam (electronic National Market), all the FPOs are now registered under the e-Nam and participating in the national market. As POPI, SVA has been assisting the FPOs for market linkage with processing industries and to the financial institutions. For capacity building of the FPOs, SVA has been organizing various trainings, exposure visits, and providing hand holding support through personal visits or through online counselling. SVA has also prepared a series of training kits in local language to help them in preparation of business plans and management of their FPOs.