Draft policy proposes easier lending, new mandis for FPOs; Is it enough?

India has over 24,000 functional FPOs established under the Companies Act as of March 31, 2023, with many of them being set up in recent years under the Central scheme to promote and form 10,000 FPOs

A few weeks ago, the Ministry of Agriculture uploaded on its website a draft policy on Farmer Producer Organisations (FPOs), which, among other things, calls for a special subset within the primary sector lending norms of banks to make lending to FPOs easier, a scheme to incentivise hiring of talent in FPOs, and encouragement for farmer groups to establish agribusiness marketplaces acting as deemed mandis under state APMC laws.

Importantly, the draft suggests a three-tier institutional architecture for FPOs modelled on the lines of the highly successful “AMUL”.

It also calls for targeted development of primary-level FPOs