India's 10,000 farmers-collective plan may fail without funding reforms

Under new FPO guidelines, the government will provide financial support of up to Rs 18 lakh to new organisations for the first 3 years. But new FPOs need support for at least 5-7 years to stabilise

India’s plan to collectivise and support millions of small and marginal farmers into profitable business groups may fail without significant reforms in the existing funding and support ecosystem for farm collectives, experts say. In five years to 2023-24, the government plans to set up and support 10,000 new Farmer Producer Organisations (FPOs), where farmers come together as shareholders to expand the production and marketing of their agricultural output.

Apart from shareholder funds and bank credit, these groups also receive some initial financial support from government agencies.

Upto 86% of landholdings