Lok Sabha Question No. 2742 (UNSTARRED), answered on 2022-08-02
Subject: Formation of FPOs
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Manoj Rajoria, Sumedhanand Saraswati, Ranjeeta Koli

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 2742

TO BE ANSWERED ON THE 2 ND  AUGUST, 2022

## FORMATION OF FPOs

2742.  DR. MANOJ RAJORIA: SHRI SUMEDHANAND SARASWATI: SHRIMATI RANJEETA KOLI:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ षि एवं ककसान कल्याण मंत्री be pleased to state:

- (a) whether the grouping of the farmers is being encouraged in the institutional form as of Farmer Producer Organisation (FPOs) by the Government;
- (b) if so, the experience gained by the Government in this regard;
- (c) whether there is any provision for technical and financial assistance to the FPOs in the new central scheme by constituting and promoting 1000 FPOs;
- (d) whether it is necessary to enhance the income of small and marginal farmers under the  said  scheme by  developing  the  business  plant  and  associating  them  with  the market along with associating the agri-produce to the export market and if so, the details thereof;
- (e) whether all the said things are conceptualized in the above scheme perfectly; and
- (f) if so, the details thereof?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE कृ षि एवं ककसान कल्याण मंत्री (SHRI NARENDRA SINGH TOMAR)

(a) to (f): Yes Sir. The Government of India has launched the Central Sector Scheme for  'Formation  and  Promotion  of  10,000  Farmer  Producer  Organizations(FPOs)'  in  the year 2020 with a total budgetary outlay of Rs.6865 Crores which will leverage economies of  scale,  reduction of cost of production and enhancing farmers' incomes thus playing a major role towards increasing the income of farmers. Under the scheme, the FPOs are to be developed in produce clusters, wherein agricultural and horticultural produce is grown / cultivated for leveraging economies of scale and improving market access for members. Formation  &  Promotion  of  FPOs  are  to  be  done  through  Implementing  Agencies  (IAs), which further engage Cluster Based Business Organizations (CBBOs) to form & provide professional handholding support to FPOs for a period of 5 years.

So far, a total of 8716 FPOs produce clusters have been allocated to Implementing Agencies  for  formation  of  FPOs  out  of  which  a  total  of  3179  no.  of  FPOs  have    been registered.

FPOs will be provided financial assistance upto Rs 18.00 lakh per FPO for a period of 03 years. In addition to this, provision has been made for matching equity grant upto Rs. 2,000  per  farmer  member  of  FPO  with  a  limit  of  Rs.  15.00  lakh  per  FPO  and  a  credit guarantee facility upto Rs. 2 crore of project loan per FPO from eligible lending institution to ensure institutional credit accessibility to FPOs. Suitable provisions have been made for training and skill development of FPOs.

The Small and Marginal Farmers(SMFs) face some challenges both in production and  post-production  stages  like  access  to  production  technology,  quality inputs at reasonable  prices,  credit,  custom  hiring,  seed  production,  value  addition,  processing, investments and most importantly market access.

Considering  the  aforesaid  constraints  being  encountered  by  small  and  marginal farmers,  experiences  gained  from  the  existing  FPOs  and  suggestions  received  during stakeholders` consultation process, the Central Sector  Scheme  of  Formation and Promotion of 10,000 FPOs was conceptualized.

Under the said scheme, a professional agency named as Cluster Based Business Organization  (CBBO)  is  to  prepare  a  business  plan  with  participation  of  farmer -members.  The business plan will cover the entire end to end value chain including those of production, post production, marketing, value addition and exports etc.

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