Farmer Producer Organization In India

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Farmer organisation is an association of farmers that have a greater interest and deals with developed structure ,membership , position and operations for its members. They have a set of laws and rules. Farmer producer organisation starts by mobilizing farmers into a group of 15-20 members at a small level such as village level which is called as Farmer interest groups (FIGs) and constructing an association of those FIGs to an appropriate federation level that is Farmer producer organisations.(FPOs).Farmer producer organisations are an association of rural producers(farmers), they came together on the principle of membership in order to achieve specific mutual interests of their members and develop technical and economic activities which will benefit their members .It also maintains a healthy relationship with partners working in their economic and institutional environment.


Farmer producer organisation (FPO) is a producer company which is basically a body corporate inscribed as producer company under companies act 1956.In simple words, it is a co-operative form of business organisation .It allows 10 or more farmers ( producers) to form an organisation to conduct business .A producer company cannot become a public limited company. It covers these points: Producing ,harvesting ,processing ,grading ,pooling ,selling , marketing , handling and exporting the production of the members and also the import of goods and services for their benefit. Providing technical services ,education ,research and development and various other activities for the promotion of the interests of the members. Generation , Transmission , and distribution of electricity, reinvigoration of water and land resources , and maintaining all other measures related to the primary produce of the members. Providing financial assistance ,welfare measures , insurance services to the producers.


It was observed that small holders had a small farm somewhere between 0.5 to 1 hectare and that too in 5 to 10 small plots .The small size of the land that small holders had were not sufficient enough to produce food to support their family. Such small holders constitute the vast majority of farmers in the developing countries like India. Because those farmers were scattered individuals,they do not posses any bargaining power and political power to secure loans for scheduled banks and very few small farmers were able to carry crop insurance against natural calamities .In addition , small holders are very vulnerable to aggravated weather like untimely rains ,pest infestation ,severe droughts ,hailstorms any of which can destroy their crops. They also suffer from market uncertainty as majority of agriculture policies are in the favour of large farmers. These were some of the conditions that gave rise to the formation of farmer producer organisation.

Formation and Registration

A producer company can be incorporated by any of the following combination of producers: It must have 10 or more than 10 producers(Individuals) , or It can be formed by 2 or more producer institutions, or It can be formed by the combination of above two(10 +2)Under 30 days of filling of all the required documents ,the registrar, after becoming satisfied that all the requirements of the act has been compiled with, the registrar issues a certificate.


The total number of directors should be between 5 to 15 The directors should be appointed within 3 months of incorporation A CEO should be appointed with substantial power of management Features of FPO FPO is formed by group of farmers for either farmer or non farmer activities It is a registered body and legal entity The shareholders of the organization is producers FPO deals with business activity which is related to primary products It has common interests It works for the benefits of farmers Free membership should be provided It cover long term and short term objectives .Need of FPO The main motive of FPO is to ensure better income of farmer through an organization of their own.

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In agricultural marketing, there is a very long chain of intermediaries between the farmer (producer) and the consumer. This chain of intermediaries who work very non transparently leading to a situation where the farmers receive a very small amount of money for their produce. The money which producers get is very little in comparison to the money which final consumer pay for the produce. Through aggregation ,the farmers can withdraw the benefits of economies of scale. They will also posses bargaining and political power that will help them to sell their primary produce in bulk. Structure of FPO[image: ]Who provide support to FPO There are number of organizations who supports FPO by providing them technical and financial support.

Domestic and International aid agencies

Services provided by FPOi[image: ]Importance of FPO Productivity increase through better inputs Credit and saving Ensuring quality Technical services Knowledge of farmers increase Productivity increase through better inputs Local development ProcessingREVIEW OF LITRATURERANI NIDHI , GADHE SHRUTHI ,NAYAKAKHILESH . “ Formation Of Farmer Producer Organizations And Its Imapct On The Developmet Of Sustainable Crop Production In Karnatka” : The main focus of the study that what problems was faced by the marginal farmers of karnatka,how FPO help to overcome from this problem.the study was conducted on both qualitative and qualitative basis.information is conducted from various secondary sources like department of Horticulture-Karnatka ,APMC etc. Primary data is collected from 4 random villages.

The study found that the income of the FPO farmers was increased 20%.Drought is commom problem faced by the farmers and organic farming is not practicing.Due to the lack of the awearness of govt. sechemes farmer was not able to get proper benefits.BIKKINA NALINI, RAMA MOHAN R TURAGR ,VAIBHAV BHAMORIYA . “Farmer Producer Organization as Farmer Collectivness” : Through this study scholoras wants to explore the potential of FPO as a collective institution through case studyof AVIRAT which is one first FPOs in Gujarat. The data is collected from the depth interview of the farmers who get benefits from the FPOs’ Farmer member of AVIRAT have got collective benefit of 10-15 lakh through lower input prices.

Avirat provides inputs on the basis of two type of arrangments. The Avirat Seed Foundation is deal with seeds , krishi Malls , pesticides , farm impliments and other equipments such as tractors ,sharp cutters ,machines ,pumps. The subsidies on the farm equipments can go upto 50% sometimes. Thus FPO has potential to provides benifets through effective collecection act. ANIKA TREBBIN . “Linking Small Farmer to Morden Retail through producer organization –Experiences with producer country in India” : the study shows that there is a scope for producer company to become a part of morden retailer supply chain in India. A producer company can take average years of 4-6 to run sucessfully.

Emergance of morden retail in country affects the agriculture production and farmers. The gap and demonstrate that producer company are promising tool to strength farmers position in their relationship with super market chain in india.Cheong (2006) . “Organization Structure Of Farmer Producer Organization” : in her study has observed that the co-operative movement has been fortunate in the continuation of some form of legislation for co-operative businesses from the beginning of the 20th century. Across Australia, with the exception of Western Australia, , legislation for co-operatives has been updated in the last decade to reflect contemporary conditions for co-operative businesses and to reinforce the centrality of the cooperative principles.


From all the above discription it is clear that FPO is one of the best initative taken by the department of agriculture and cooporation of the ministry of agriculture to improve the conditions of small or marginal farmers. As the year 2014 is absorved as the year of Farmer Producer Organization by government of Indian. Farmers or producers can form a group and register themselves. In many places in india like karnatka, Gujarat , telengana etc the visible result was seen during different researches by providing the various inputs like,seeds , pesticides , fertilizers , loans and insurance for motors ,tractors , sharp objectives and construction of wells to the registered farmers can help them to improve their financial conditions .subsidies are also provide to the farmers. In many places per hector production of land is increased by 10% after FPO which is a positive sign .Technical traning is provided to the farmers which is used in the improvement of production of crops . Its main aim is to ensure the better income of farmers or producers through their own organization. In simple words we can easily say that FPO is best policy for the improvement of marginal or small farmer conditions.

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