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Resource centre on India's rural distress
 
 

Low grant sanctions, disbursement: India wants to promote FPOs but where are the funds? -Shagun

-Down to Earth

Eligibility threshold for FPOs should be reduced or support provided to meet the criteria, experts feel

Farmer producer organisations (FPO) figure prominently in government policies and the ambitious plan to double farmers’ income by 2022. But funds remain elusive for these bodies, according to a recent analysis

Just 1-5 per cent of FPOs have received funding under central government schemes introduced to promote them in the last seven years, the The State of India’s Livelihood (SOIL) Report 2021 stated.

Access Development Services, a national livelihoods support organisation that prepared the report, analysed only farmer producer companies (FCP — FPOs registered under The Companies Act, 2013) since they make up a large majority of the organisations started in recent years. The number of FPOs registered as cooperatives or societies is very small. 

In 2019, Prime Minister Narendra Modi announced that about 10,000 FPOs will come up in India. Equity Grant Scheme and Credit Guarantee Scheme were the two primary programmes introduced for FPOs to avail funds to support their activities.

Under the Equity Grant Scheme, Small Farmers’ Agri-business Consortium (SFAC), promoted by the Ministry of Agriculture and Farmers Welfare, has been offering equity grants up to a maximum of Rs 15 lakh in two tranches within a period of three years since 2014. 

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