The Ministry of Agriculture & Farmers Welfare provided an update on the Central Sector Scheme for 'Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)' in a written reply to Lok Sabha. Since 2020-21, the government has successfully formed 10,000 FPOs under the scheme, which undertake diverse business activities including agri-input supply, aggregation and trading of agricultural produce, value addition and processing, seed production, digital commerce, custom hiring services, and export promotion.
Financial performance data from audited statements for 2024-25 shows that 6,964 FPOs achieved a turnover of up to ₹50 lakh, 862 FPOs had turnover between ₹50 lakh to ₹1 crore, and 1,135 FPOs recorded turnover exceeding ₹1 crore. The scheme provides comprehensive financial support including management and handholding assistance of up to ₹18 lakh per FPO for initial 3 years, matching equity grant of up to ₹15 lakh per FPO to strengthen capital base, and credit guarantee facility for project loans up to ₹2 crore per FPO to improve institutional credit access.
Additionally, each FPO receives 5 years of handholding support through Cluster-Based Business Organizations (CBBOs) for capacity building, business planning, market linkages, and institutional development. Total financial disbursements under the scheme amount to ₹827.81 crore released as management cost and ₹631.98 crore as matching equity grant to registered FPOs.
The scheme has collectivized over 65 lakh shareholders, predominantly small and marginal farmers, to leverage economies of scale. Operational achievements include 6,928 FPOs obtaining seed licenses, 4,987 with pesticide licenses, and 6,650 with fertilizer licenses for better input bargaining. Furthermore, 5,765 FPOs have established their own processing units, and 3,083 FPOs have availed the credit guarantee facility. The National Academy of Agricultural Sciences' Policy Paper No. 144 recommendations for FPO-industry linkages and institutional buyer connections are being implemented under the scheme.