Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)

Introduction 

The Government of India launched the Central Sector Scheme for the “Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)” on February 29, 2020. The scheme was created to address key challenges faced by small and marginal farmers, such as limited bargaining power, high input costs, and poor access to markets. By organizing farmers into collective groups called FPOs, the scheme aims to leverage economies of scale, reduce production costs, and improve farmers’ income through better production and marketing strategies. The scheme targets farmers across India, especially smallholders, and provides financial support including up to Rs. 18 lakh per FPO as management cost over three years, matching equity grants up to Rs. 15 lakh per FPO, and credit guarantee facilities up to Rs. 2 crore to access loans. FPOs are also supported through digital platforms like e-NAM and ONDC to boost market access. This agriculture scheme helps farmers come together as an enterprise, gain access to technology, inputs, and market linkages, ultimately improving income stability and sustainability. The scheme also includes capacity building, training, and handholding support to ensure the growth and success of FPOs in India’s agricultural sector. Thus, the “Formation and Promotion of 10,000 Farmer Producer Organizations” scheme is a crucial step in empowering Indian farmers and enhancing their economic well-being.

Overview of the Scheme

The “Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)” is a Central Sector Scheme launched by the Government of India’s Ministry of Agriculture and Farmers Welfare on February 29, 2020. Its main goal is to empower small and marginal farmers by promoting collective farming groups – FPOs – that help increase their bargaining power, reduce production costs, and improve market access. This scheme supports the overall socio-economic development of farming communities in India.

The implementing agencies include the Small Farmers Agribusiness Consortium (SFAC), NABARD, National Cooperative Development Corporation (NCDC), and other government bodies. These agencies support the formation, registration, and capacity building of FPOs. They also engage Cluster Based Business Organizations (CBBOs) to provide professional handholding support to each FPO for five years.

The scheme is 100% centrally funded, with a budget allocation of ₹6,865 crore till 2027-28. Financial assistance includes Rs. 18 lakh per FPO for management expenses over three years, an equity grant of up to Rs. 15 lakh per FPO (around Rs. 2,000 per farmer member), and a credit guarantee facility up to Rs. 2 crore to help FPOs access formal loans.

Coverage includes input aggregation, farm machinery, value addition, training, credit access, and insurance support. For example, a maize-growing FPO could jointly buy seeds, rent machinery, get training, and market produce collectively. The scheme is ongoing, with over 10,000 FPOs formed nationwide, including strong focus on women, SC/ST farmers, and weaker sections.

Key Points:

• Launched by: Ministry of Agriculture & Farmers Welfare, Government of India (Central Sector).
• Implementing Agencies: SFAC, NABARD, NCDC, state line departments.
• Funding Pattern: 100% Central Government funding with ₹6,865 crore till 2027-28.
• Components Covered: Inputs, machinery, value addition, training, credit, insurance.
• Current Status: Ongoing, target of 10,000 FPOs already achieved; continuous handholding support.
• Special Focus: Small/marginal farmers, women farmers, SC/ST communities.
• Example: FPO groups pooling resources for seed purchase and marketing collectively.

This overview summarizes the broad structure, scope, and implementation of the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme in India.

Objectives 

The Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme has clear objectives focused on empowering small and marginal farmers. Its main goals are to mobilize farmers into collective groups to improve their access to inputs, credit, markets, and technology. The scheme aims to develop self-sustaining FPOs that can enhance farmers’ income through economies of scale and better bargaining power.

Key objectives include:

• Mobilize small and marginal farmers to form 10,000 FPOs across India.
• Increase agricultural production and productivity by promoting good farming practices and collective input procurement.
• Build sustainable capacity of FPOs for democratic governance and strong rural self-reliance.
• Improve access for FPOs to quality inputs, credit, insurance, and market linkages.
• Facilitate value addition, better marketing, branding, and export opportunities, especially through the “One District One Product” approach.
• Provide continuous professional handholding support to FPOs to ensure their growth and viability.
• Support vulnerable groups, including women farmers, SC/ST members, and economically weaker sections, as key beneficiaries.

These objectives align with the broader purpose of the agriculture scheme to boost farmer incomes, reduce costs, and strengthen rural livelihoods by promoting organized farming communities. The scheme creates an enabling environment for FPOs to flourish as collective enterprises and enhance farmers’ socio-economic wellbeing in India.

Key Features / Benefits 

The Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme offers a range of key benefits designed to empower farmers and improve their economic conditions. Here are the major features and benefits explained simply:

• Financial Support for FPOs

Each new FPO receives up to ₹18 lakh over three years to cover management costs, helping them establish solid operations. (Example: An FPO in Bihar can use this grant to hire staff and organize training for members.)

• Matching Equity Grant

Farmers who become members get an equity grant of up to ₹2,000 per person, with a maximum of ₹15 lakh per FPO to strengthen their capital base.

• Credit Guarantee Facility

FPOs can access up to ₹2 crore as project loans with credit guarantee cover, making it easier to get bank loans without heavy collateral.

• Handholding Support for 5 Years

Professional support is provided for five years post-formation to build capacity, governance, and business skills of FPOs.

• Focus on Small, Marginal, and Women Farmers

The scheme encourages inclusion of women, SC/ST, and low-income farmers, making FPOs more equitable and effective.

• Bulk Purchase of Inputs at Reduced Cost

FPOs can buy seeds, fertilizers, and pesticides in bulk at lower prices, reducing individual farmer costs.

• Custom Hiring of Farm Machinery

Farming machinery like power tillers and harvesters can be rented by FPO members at reasonable rates, lowering their investment burden.

• Value Addition and Market Linkages

FPOs support processing, grading, packaging, and marketing of crops, increasing farmers’ earnings by reducing post-harvest losses.

• Digital Market Access via ONDC

Many FPOs are onboarded on the Open Network for Digital Commerce to sell produce directly online, expanding market reach.

• Employment Generation in Rural Areas

By developing value chains and marketing infrastructure near farms, the scheme helps create local jobs.

• Inclusive Membership Criteria

Minimum 300 members per FPO in plains and 100 in hilly or NE regions ensures inclusive scale, with an average target size of 500 in plains.

This agriculture scheme’s features focus on collective strength, financial assistance, capacity building, market access, and technology adoption, all aimed at improving farmers’ income, reducing costs, and making farming more sustainable and profitable.

The scheme benefits millions of farmers across India by making them part of a collective, backed by official support to thrive in modern agriculture.

Eligibility Criteria 

The eligibility criteria for the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme are clearly defined to ensure the right beneficiaries get support. The criteria are organized by beneficiary type, as follows:

Farmers

• Individual farmers must be residents of India engaged in agriculture or allied activities.
• They must be within the age group typically involved in farming (official guidelines do not specify exact age limits but focus on active farmer status).
• Aadhar card, land records, and bank account details are required for identification and verification.

Self-Help Groups (SHGs)

• SHGs must be registered and active with regular meetings.
• They should have linkage with banks for financial transactions.
• Active SHGs can be mobilized as a part of the FPO formation process.

Farmer Producer Organizations (FPOs)

• Must be legally registered entities under the Companies Act (2013) or the Cooperative Societies Act of the respective state.
• Should have at least 300 farmer members in plains and 100 members in North-Eastern and hilly regions for eligibility.
• Members should mostly be small or marginal farmers, with a focus on women and SC/ST farmer inclusion.
• One member cannot hold more than 10% of the total equity to ensure democratic ownership.
• FPO must have raised equity capital from its members as per its bylaws.
• FPOs already registered but inactive or without prior government support can apply.

Entrepreneurs, Startups, and MSMEs

• May participate as service providers or support agencies for FPOs.
• Must be formally registered under UDYAM or have GST registration, as per official norms.

Special Categories

• The scheme gives preference to women farmers, SC/ST groups, and farmers from Northeast and hilly areas.
• Specific relaxed membership size applies in North-Eastern and tribal regions to encourage inclusivity.

Not Eligible

• Entities already availing benefits under other central government schemes for the same purpose.
• FPOs engaged in non-agriculture allied activities or commercial business beyond scheme scope are excluded.

Mandatory Documents:

• Aadhaar card for all members (for identity proof).
• Land ownership or tenancy documents.
• Bank passbook or account statement.
• FPO registration certificate.
• Detailed Project Report (DPR) and quotations wherever applicable.

These clear eligibility norms ensure the scheme benefits genuine farmer groups and supports sustainable and democratic farmer-led enterprises under the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) agriculture scheme.

Application Process

The application process for the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme is straightforward and designed to help farmers and groups easily apply for support. Here is a clear step-by-step guide:

Where to Apply

Applications are submitted online through the official Ministry of Agriculture portal: 10kfpomis.dac.gov.in. This is the designated portal for formation and promotion of FPOs.

Registration/Login

New applicants register by creating a user account on the portal with basic credentials like name, mobile number, and e-mail. Existing users can log in using their credentials.

Application Form Sections

The form requires filling details such as:

• Beneficiary information (individual/group names, contact details)
• Land and farm details (ownership/lease records, size, crop pattern)
• Selection of scheme components (input supply, machinery, value addition, etc.)
• Bank details for Direct Benefit Transfer (DBT)

Documents to Upload

Upload scanned copies of:

• Aadhaar cards of members
• Land ownership or tenancy proof
• Bank passbook copy
• Registration certificate of the FPO (if already formed)
• DPR (Detailed Project Report) if applicable
• Quotations for expenditure where required

Application Fees

No application fee is charged under this scheme.

Acknowledgment and Application ID

After submission, an acknowledgment receipt with an application ID is generated. Save this for future reference.

Verification and Field Inspection

The application is forwarded to the Cluster-Based Business Organization (CBBO) or state agriculture department for document verification and possible field inspection.

Approval and Assistance Release

On approval, assistance such as grants and credit guarantees are sanctioned and released, usually through Direct Benefit Transfer (DBT) into the registered bank account.

Offline Application Option

Applicants can also approach the nearest Agriculture Department office, Krishi Vigyan Kendra (KVK), ATMA center, or Block Agriculture Office to get help with filing the application or submit documents offline.

Helpline and Support

For queries, applicants can contact the SFAC helpdesk or state agriculture department offices. Official portal helpline numbers and emails are available on 10kfpomis.dac.gov.in.

Tips to Avoid Mistakes

• Double-check that all member names match with Aadhaar and bank records.
• Upload clear, legible document copies to avoid rejection.
• Fill the form completely; incomplete forms delay processing.
• Note and adhere to deadlines mentioned by the implementing agency.

This numbered process guide helps applicants easily navigate the portal and successfully apply online for the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme.

Challenges or Limitations 

The Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme has helped many farmers, but like any large initiative, it faces some common challenges and limitations. Understanding these challenges can help improve implementation and outcomes. Here are some key challenges paired with practical solutions:

• Challenge: Mobilizing Farmers

Many farmers are initially hesitant to join FPOs due to lack of awareness or trust.

Solution: Persistent awareness efforts and transparent communication about benefits can build trust and encourage participation.

• Challenge: Limited Management and Professional Skills

Many FPOs lack trained leaders or managers proficient in running business operations.

Solution: Ongoing capacity-building programs and handholding support from Cluster-Based Business Organizations help build necessary skills over time.

• Challenge: Financial Constraints and Equity Contribution

Farmers sometimes find it hard to contribute equity or access loans due to limited income or collateral.

Solution: The scheme’s grant support and credit guarantee facilities ease financial pressures and make credit more accessible.

• Challenge: Complex Verification and Documentation

Delays occur in application processing due to document mismatches or incomplete verification.

Solution: Keeping land records and personal IDs updated and submitting clear, complete documents can reduce such delays.

• Challenge: Seasonal Timing Restrictions

Agriculture’s seasonal nature means certain activities or applications can only happen in specific periods.

Solution: Plan applications early and use off-season periods for training and capacity building.

• Challenge: Infrastructure and Market Access Limitations

Lack of storage, transport, and processing infrastructure affects FPO efficiency.

Solution: Encouraging value addition and linking FPOs with government schemes for infrastructure development can address this.

• Challenge: Navigating Regulatory and Compliance Issues

Some FPOs find compliance with multiple regulations complex and resource-intensive.

Solution: Simplified guidelines, online submission, and regular training on compliance help ease this burden.

• Challenge: Inclusion of Vulnerable Groups

Ensuring adequate representation of women, SC/ST, and marginalized farmers can be difficult.

Solution: Special focus on these groups through relaxed membership norms and targeted support ensures equitable participation.

These challenges are common in large-scale agricultural projects like the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme. Addressing them with practical solutions strengthens the scheme’s impact and sustainability, ultimately benefiting India’s farming communities.

Government Support & Future Outlook 

The Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme is linked with several other major agricultural missions to provide comprehensive support to farmers and transform Indian agriculture. This convergence helps farmers benefit from a range of government initiatives under one umbrella.

Officially, the scheme connects with flagship programs like PM-KISAN for income support, PMFME for micro food processing enterprises, PMFBY for crop insurance, ATMA for agricultural technology management, NFSM for focused crop development, and RKVY for diversified agriculture development. These linkages help FPOs access inputs, credit, training, insurance, and better market opportunities in a coordinated manner.

For example, an FPO focused on mango cultivation can use PMFME for setting up a processing unit, PMFBY for crop insurance, and PM-KISAN for farmer income support, all while availing benefits under the 10,000 FPOs scheme to collectively purchase inputs and access markets. This synergy reduces duplication and boosts farmers’ overall income and sustainability.

The scheme continues to evolve with updates including expansion of handholding support, onboarding of FPOs onto digital platforms like e-NAM and ONDC for market access, and extending timelines up to 2027-28 with a total budget of ₹6,865 crore. Future plans emphasize strengthening CBBOs for incubation and business services, ensuring FPOs become self-sustaining enterprises.

This convergence and future roadmap reinforce the role of the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) in building a resilient, inclusive, and prosperous agriculture sector in India.

Conclusion 

The Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme is vital for empowering small and marginal farmers across India. It helps farmers unite to improve their income by reducing costs, increasing productivity, and accessing better markets collectively. The scheme benefits farmers who want to work together as groups to increase their bargaining power and adopt modern farming techniques. To get started, interested farmers and groups should check their eligibility and apply online at the official portal 10kfpomis.dac.gov.in, preparing necessary documents like Aadhaar, land records, and bank details. Consulting the local agriculture office can also provide valuable guidance. It is important to verify the latest updates on the official portal or through the designated helpline to ensure smooth application and avail maximum benefits under the scheme. By taking action and applying, farmers can be part of this transformative movement to strengthen rural livelihoods and make agriculture more sustainable and profitable.

Explore detailed resources on this scheme and the full suite of programmes at ALL ABOUT AGRICULTURE. For one-on-one assistance, call us at +91 8484002620.