The Indian government plans to continue its central scheme for Farmer Producer Organisations (FPOs) for another five years, from 2026 to 2031. This extension aims to address challenges that have prevented FPOs from growing larger and more effective. Agriculture Secretary Devesh Chaturvedi announced this at the CII FPO Summit.
The scheme began in February 2020 with the goal of creating 10,000 FPOs. While about 10,000 FPOs have been formed, many are still new and need support. The government recognises the need to guide these organisations, especially those established recently. Community-based groups and implementing agencies will help with this support.
Key issues identified include the need for better training and easier access to loans. The government wants to include solutions for these problems in the new scheme. The goal is to make FPOs more efficient and profitable for farmers.
A significant hurdle for FPOs is following the rules set by the Companies Act. The Agriculture Secretary mentioned that they have asked the Ministry of Corporate Affairs for simpler penalties during the first 3-5 years of an FPO’s life. Compliance is important, but reduced penalties can help new FPOs grow stronger before facing strict enforcement.
Despite challenges, the FPOs formed under the scheme have shown promising results. Those launched in Chitrakoot have achieved a total yearly turnover of ₹9,000 crore in the 2024-25 financial year. This figure is expected to rise to ₹10,000 crore once all reports are in. These FPOs represent 52 lakh farmers out of India’s 12-13 crore farming population. When considering other FPOs registered with different organisations, the total number is much higher than individual farmer registrations.
Access to working capital remains a major concern. The current grant system provides matching grants, but the limit of ₹30 lakh is not enough for large operations. The Secretary suggested this limit should be at least ₹50 lakh to ₹1 crore, particularly for FPOs involved in buying crops, making advance payments to farmers, or adding value to products.
The government is also looking into ways to provide credit guarantees or working capital support to FPOs. To help with compliance, state governments might create lists of affordable chartered accountants and company secretaries who can assist FPOs with legal and regulatory requirements. The aim is to ensure FPOs gradually build the capacity to handle these compliances themselves.
FPOs play a vital role in processing local products like banana fibre, jaggery, millets, and pulses. They can sell these products in local markets or online, supporting the ‘Make in India, local for local’ initiative. However, some entities are registered as FPOs with only a few people, lacking genuine farmer involvement. The government plans to identify and support FPOs that truly work with farmers and distinguish them from those merely seeking benefits.
An economic challenge for farmers is buying farm inputs at retail prices while selling their produce at wholesale rates. FPOs can help reverse this trend by allowing farmers to buy inputs in bulk at lower wholesale prices and sell processed, value-added products at retail prices. This collective action is something individual small farmers cannot achieve alone.
APEDA, the Agricultural and Processed Food Products Export Development Authority, is also working to strengthen FPOs. Their goal is to ensure standardised, quality agricultural products reach both domestic and international markets. APEDA supports FPOs with infrastructure, quality training, and market access. Success stories include a rise in vegetable exports from Varanasi and award-winning fig products from Pune that have secured EU orders.
APEDA collaborates with NABARD, SFAC, and NAFED to guide registered FPOs and link them to global export markets. The event was attended by key figures from agricultural organisations and businesses, highlighting the collective effort to boost the FPO sector.