Govt plan to set up 10,000 groups to promote farm produce needs pruning

A farmer-producer organisation is a means to help small farmers maximise their income by offering distribution and marketing support for their produce

Last month, Prime Minister Narendra Modi launched an ambitious scheme to promote 10,000 Farmer-Producer Organisations (FPOs) in the next five years, starting 2019-20.

If implemented well, the scheme could mobilise almost three million farmers (assuming that each FPO has a minimum membership of 300 farmers) into economically sustainable collectives. Two thousand of these FPOs are to be formed in 2020-21 itself, according to a recent reply in Parliament.

A farmer-producer organisation or company is a quasi-producer collective registered as a private limited company under the Part IXA of the Companies Act (which means it enjoys tax benefits).  It is a means to