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Resource centre on India's rural distress
 
 

Success story: Why Leadership Counts -- An FPO in UP shows the way -PVS Surya Kumar

-The Hindu Business Line

Farmer Producer Organizations (FPOs) is the new buzzword among development professionals and NGOs — both public and private! Everyone wants to mobilise the community and establish FPOs.

Farmer Producer Organizations (FPOs) is the new buzzword among development professionals and NGOs — both public and private! Everyone wants to mobilise the community and establish FPOs.

FPOs present the power of aggregation, farmers’ come together, form an organisation, which collectively buys inputs and sells their produce. FPOs makes eminent sense, as small farmers operate nearly 46 per cent of land-holdings and contribute 51 per cent of agricultural output. The marketable surplus from their holdings is small and hence they have less bargaining and staying power in the markets.

The situation is similar world over. The FAO says five out of six land-holdings in the world consists of less than two hectares and produce a third of world’s food. Success of the FPOs is very important as it helps us understand what makes them tick and what’s benficial to their constituents. Performing FPOs usually have about 300 farmer members. There are about 10,000 FPOs in the country.

Alagh’s idea

Former Union Minister YK Alagh who passed away on December 6, was the father of this idea. He suggested amending the Companies Act of 1956 allowing formation of farmer producer companies (FPCs) that would combine the ideals of cooperatives with the business-friendly regulatory framework of company law. However, FPOs can also be registered as societies, cooperatives and trusts.

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