Farmer Producer Organisations

Farmer Producer Organizations (FPOs) are collectivity of small and marginal farmers. FPO is an effective forum to address challenges being faced by farmers with respect to improved, inputs, markets, technology and access to investment etc. Department of Agriculture and Cooperation under Ministry of Agriculture, Govt. of India has recognised ‘Farmer Producer Organizations’ registered under the special provisions of the Companies Act, 1956 as the most appropriate Institutional forum for collectively leveraging production and marketing strengths of farmers. The Department of Agriculture and Cooperation (DAC) has setup ‘Small Farmers Agribusiness Consortium’ (SFAC), a society under DAC, as designated Agency to act as a single window for Technical support, Training needs, Research and Knowledge management and to create linkages to investment, and Markets. SFAC supports State Governments’, FPOs and other entities engaged in promotion and development of FPOs providing end-to-end services to its members covering almost all aspects of cultivation such as inputs, technical services, processing, marketing etc include financial, business and welfare services.

SFAC facilitates linkages between farmers, processors, traders, and retailers to coordinate supply and demand and to access key business development services such as market information, input supplies, and transport services.

FPOs provide Financial Services through crop loans, purchase of tractors, pump sets, construction of wells, laying of pipelines. Input Supply Services like providing low cost and quality fertilizers, pesticides, seeds, sprayers, pump sets, accessories, and pipelines. Procurement from its members, storage, value addition and packaging services are added services provided by FPOs. Direct marketing services enable members to save in transaction costs, weighment losses, distress sales, price fluctuations, transportation, quality maintenance etc. The FPO will provide various insurance services like Crop insurance, Electrical motors insurance and Life insurance. Technical services include promoting best practices of farming, providing marketing information, disseminating new knowledge and skills in agricultural production and post-harvest processing methods. Networking Services of FPOs make channels of information (e.g. product specifications, market prices etc.) and other business services accessible to rural producers; facilitating linkages with financial institutions, producers, processors, traders and consumers and government programmes.

The government of Karnataka provides infrastructural facilities (up to 90%) and management support to FPOs.​ Besides, selected Resource Institutions (RI) are also appointed to assist FPOs. RIs engage the Local Resource Persons (LRP) to help the farmers with necessary inputs and keep tracking the progress of the field activities. FPOs are considered as licence holders for storage and sale of seeds, fertilizers, pesticides.,. Further, they are eligible to act as APMC Commission Agent and or Trader and entitled for priority allotment of go-down space in APMCs.​

FPOs in Karnataka

FPOs are spread across the 30 districts of Karnataka. Generally, FPOs can be classified on the basis of commodities dealt with. As per record, there are around 129 FPOs in Karnataka. 90 FPO’s are dealing with horticultural crops, 12 with coconut/copra and 27 with pulses.

At present, 92 notified commodities are traded in the state of Karnataka. This includes major categories of commodities like cereals, millets, pulses, oil seeds, fibre crops and forest produce.

Total FPOs registered in the state so far are small in number. More number of FPOs will be beneficial to the farmer community and may lead them to improve their bargaining and financial strength and also considerably reduce farmers dependence on commission agents and local money lenders for their financial needs.