Boosting FPOs: Government's New Strategy for Agricultural Prosperity

The government extends its Farmer Producer Organisations scheme (2026-31) to tackle operational challenges. Secretary Chaturvedi highlights compliance issues, working capital, and farmer engagement as key focuses. APEDA promotes FPOs in agriculture export, while government explores credit facilities, aiming for sustainable growth within farming communities.

The government will extend its Farmer Producer Organisations (FPOs) scheme for another five years, from 2026 to 2031, to address ongoing challenges and enhance operational capacity, announced Agriculture Secretary Devesh Chaturvedi at the CII FPO Summit. Launched in February 2020 with a goal of forming 10,000 FPOs, the scheme requires further support due to practical difficulties, such as limited access to capital loans and the need for capacity building.

Chaturvedi noted, "We have formed about 10,000 FPOs, but they still require guidance and support from community-based organisations and implementing agencies." A crucial bottleneck identified is compliance with the Companies Act. The Ministry has requested leniency from the Ministry of Corporate Affairs, aiming to ease penalties during the initial phases of FPO development.

Historically challenged by inadequate working capital, the current Rs 30 lakh equity grant limit is considered insufficient for large-scale operations. Chaturvedi emphasized increasing this limit and exploring credit guarantees. APEDA Secretary Sudhanshu highlighted efforts to connect FPOs with global markets, citing success stories like Varanasi's vegetable exports. Strategic partnerships with organizations like NABARD and NAFED are crucial to fostering long-term FPO growth.

(With inputs from agencies.)