By November 30, 2023, around 7600 farmer producer organizations (FPOs) were established in India, which represents 75% of the government’s target to promote 10,000 FPOs worldwide by 2024. With a budgetary provision of Rs. 6865 crore, the Indian government would create 10,000 new FPOs by 2024.
This program aims to provide farmers with leveraged economies of scale, reduce production costs, enhance their bargaining power, and increase farmers’ income by grouping their agricultural output.
Under the scheme, as of November 30, this year, approx. 7597 FPOs have been registered in India. Around 1150 FPOs have been registered in Uttar Pradesh, followed by 521 in Maharashtra, 566 in Madhya Pradesh, 474 in Bihar, and 475 in Punjab.
As per research, in 2020–21 and 2021–22, the National Bank for Agriculture and Rural Development (NABARD) conducted the Farm Product Outcomes (FPO). Also, as per the study, farm productivity increased from 18.75% to 31.75% for those farmers who are associated with FPOs.
According to the NABARD study, collectivization under FPOs impacted members positively, especially small and marginal farmers. Due to product aggregation, primary producers have enhanced their bargaining power.
This scheme helped reduce post-harvest losses. The FPOs helped farmers avoid crop sales and storage facilities and ensured them an increase in income.
Farmers in Odisha, Madhya Pradesh, Kerala, and Rajasthan realized better average prices as a result of being FPO members. As per the survey, the price realization of FPO members rose by 45% in Kerala.
The Center provides financial support of Rs. 1.8 million per FPO for three years under the FPO scheme. Around 2.5 million is set aside for cluster-based business organizations. Nine implementing agencies, including the National Cooperative Development Corporation, the Small Farmers Agri-Business Consortium, and NABARD, are responsible for forming FPOs.