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Budget 2020-21: Govt to announce Rs 10,000-crore 5-year plan for FPOs -Prabhudatta Mishra

-Financial Express

Budget 2020: The direct budgetary aid would be in the form of a grant equivalent to the equity capital of each FPO.

Budget 2020: The government will likely announce a five-year scheme in the upcoming Budget, entailing a total support —both budgetary and indirect —of Rs 7,000-10,000 crore to honour its pledge of creating 10,000 farmer producers’ organisations (FPOs) and help boost their agricultural income.

The direct budgetary aid would be in the form of a grant equivalent to the equity capital of each FPO. The indirect support would be in the form of a guarantee for facilitating loans to these FPOs. But in case some of them default, the burden will, of course, fall on the government and will be borne from budgetary allocation.

Currently, there are some 3,000 FPOs in the agriculture sector, out of which less than 1,000 are active. The government has been promoting FPOs to enable them to better bargain with traders for higher prices for their produce. The objective is also to directly connect farmers with food processors and exporters and enhance their realisation.

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