New Delhi. The government has extended the deadline of a big ongoing scheme for farmers. Now the benefits of this scheme can be availed till the year 2031. Agriculture Secretary Devesh Chaturvedi said the government will extend its central scheme for Farmer Producer Organizations (FPOs) for another five years from 2026 to 31, to address the shortcomings that have limited the expansion of operations.
Speaking at the CII FPO Summit, Chaturvedi said the scheme, which was launched in February 2020 with a target of setting up 10,000 FPOs, needs to be extended till the next Finance Commission cycle. Around 10,000 Family Welfare Organizations (FPOs) have been formed so far but they need guidance. Many of these FPOs have been formed in the last two years, so we have to guide them in collaboration with community organizations and implementing agencies. The Ministry has identified practical difficulties in making Farmer Organization (FPO) successful, including capacity building and access to capital credit.
Efforts to provide more profits to farmers
Agriculture Secretary said that we will try to remove these difficulties in the new scheme, so that they can provide more benefits to the farmers and make the entire process dynamic. A major challenge before Farmer Producer Organizations (FPOs) is to follow the standards under the Companies Act. On this, the Secretary said that the department has requested the Ministry of Corporate Affairs to give exemption in fine during the first three to four years. This will help the farmers to do their work easily.
Will be exempted from fine
The Secretary said that these organizations are considered as a company, hence it is necessary to follow the rules related to it. However, they can be exempted from the fine and once they become capable, they will start following the rules again. Chaturvedi said that 10,000 FPOs started in Chitrakoot in the year 2020 did a business of Rs 9,000 crore in the financial year 2024-25, which is expected to reach Rs 10,000 crore soon. FPO has so far benefited 52 lakh of India’s 12-13 crore farmers.
How to get the benefit of the scheme
Small and medium farmers get huge benefits from FPO. In this, 10-15 or more farmers come together and form a company. An individual farmer is weak and middlemen buy his goods at cheap prices. But, in FPO, farmers sell their goods in a group, which makes it easier to get better prices from traders. Broadly speaking, farmers get 20 to 50 percent higher prices for their crops from this organization.
Cost of farming also reduced
FPO not only helps in selling the finished crops at a good price, but also makes farming easier. By purchasing seeds, fertilizers and pesticides collectively, they become cheaper by 10 to 30 percent. Grants are also available from the government for farming and purchasing equipment required for farming. When farmers purchase agri equipment through FPO, they are given the benefit of subsidy.
Loan is available without guarantee
The government also gives grants to farmers for building cold storage, setting up sorting-grading machines, packaging units, purchasing transport vehicles and setting up processing units. For the warehouse, an equity grant of up to Rs 50 lakh is available, which means that the government will have a stake in it and will invest the money on its own behalf. The loan is also available without any guarantee and has to be repaid in three years. Apart from this, through FPO, farmers directly contact big retail companies like Big Basket, ITC, Amazon, Flipkart, Jiomart and earn up to 5 times more profit by selling finished products. The organization also gets 3 percent subsidy on loan interest. Overall, through this scheme, farmers become agri businessmen.
