What is FPO and how it is helpful to Farmers?

FPO, Farmer Producer Organizations is an organization, where the members are farmers itself. Farmers Producers Organization provides end-to-end support and services to their member farmers, including Knowledge sharing, raw material supply, technical services, processing, collectively marketing and sales etc.

Government’s idea behind the Farmer Producer Organizations (FPO) was that “Farmers, who are the producers of their agriculture products, can form the groups and can register themselves under the Indian Companies Act”. 

In order to facilitate the process, Small Farmers Agribusiness Consortium (SFAC) was mandated by the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India, to support the State Government in the formation of the Farmer Producer Organizations (FPOs). The goal is to enhance competitiveness of farmer and to increase their advantage in emerging the market opportunities.

The main aim of the Farmer Producer Organization is to ensure a better income for the producers through an organization of their own. Small producers do not have volume individually to get benefits of economies of scale. In agricultural marketing, a chain of intermediaries, who often work non-transparently leading to the situation, where producer receives only a small part of the value, which the ultimate consumer pays. This will be eliminated. Through accumulation, the primary producers can avail the benefit of the economies of scale. Farmers Producers have better bargaining power in the form of bulk buyers of produce and bulk suppliers too.