What is an FPO (Farmer Producer Organization)?
Farming is often done in small patches of land in India. As a result, many farmers struggle to get the right price for their crops, access to quality seeds, fertilizers, or markets. The solution?What is an FPO?
An FPO (Farmer Producer Organization) is a registered group of farmers who work together like a company. It is formed to help farmers:
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Get better prices
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Reduce input costs
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Improve storage, marketing, and selling power
FPO is registered under the Companies Act and works as a business — but owned and managed by farmers.
How Can a Farmer Start an FPO?
Step-by-Step Guide:
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Gather Farmers
Minimum 10 farmers (can be more) who are willing to work together. -
Decide Objectives
Decide why you're forming the FPO – buying inputs together, selling produce, starting food processing, etc. -
Choose a Name and Register
Register the FPO as:-
Producer Company under the Companies Act, 2013
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Or a Cooperative Society under State Act
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Open a Bank Account
FPO needs a business bank account to handle finances. -
Create a Board & CEO
Select leaders (Board of Directors) and a CEO to manage day-to-day operations. -
Apply for Government Support
Register under SFAC (Small Farmers Agri-Business Consortium) or NABARD to get funding and training.
What is Needed to Start an FPO?
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Minimum 10 farmers/members
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PAN card, Aadhaar cards, and photographs of all members
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Common business purpose (crop selling, seeds, input purchase, etc.)
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Basic office setup or address
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Bank account in FPO’s name
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Registration certificate (from ROC or cooperative registrar)
Benefits of FPOs for Farmers
| Benefit | Details |
|---|---|
| Better Bargaining Power | Bulk selling helps get better prices |
| Lower Input Costs | Buy seeds/fertilizers in bulk at cheaper rates |
| Access to Markets | Direct selling to companies, retailers |
| Loan and Credit Facility | Easier bank loan access through FPO name |
| Processing and Value Addition | Can set up small processing units |
| Branding and Export | Brand own products and explore export options |
| Training and Support | Government, NGOs provide free training & expert advice |
Government Support & Schemes for FPOs
Government of India
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Central Sector Scheme on Formation and Promotion of 10,000 FPOs
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Financial support up to ₹18 lakh per FPO
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₹2,000 per farmer/year equity grant
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Credit guarantee for bank loans
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Implemented through SFAC, NABARD, NCDC
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SFAC (Small Farmers’ Agribusiness Consortium)
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Provides seed capital, credit guarantee, and market linkages.
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NABARD
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Financial and training support for newly formed FPOs
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Model business planning and guidance
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Government of Gujarat
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Gujarat Agro Industries Corporation
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Technical support and processing project funding
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Helps in marketing linkages
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ATMA (Agricultural Technology Management Agency)
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District-level support for extension, training, and exposure visits for FPO members
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Krishi Mahotsav & iKhedut Portal
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Application facility for schemes, subsidies for FPOs on farm machinery, cold storage, etc.
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