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SIGNUP

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

At a glance

This central-sector scheme, launched on 29 February 2020 with a budget of Rs 6,865 crore up to 2027-28, helps small farmers band together into Farmer Producer Organisations (FPOs) — registered collectives that buy inputs and sell produce jointly for better prices. Implementing agencies (including SFAC, NABARD, and NCDC) form the FPOs and support each one for five years. The target of 10,000 FPOs was achieved in February 2025 (source: PIB).

Who is eligible

  • To join an FPO: any farmer can become a shareholder member of an FPO in their area, usually by buying a small share. FPOs are especially aimed at small and marginal farmers.
  • For scheme support: FPOs formed and registered under the scheme (as producer companies or cooperatives) through the designated implementing agencies and their Cluster-Based Business Organisations (CBBOs).

Benefits

For the FPO (which passes benefits to member farmers):

  • Financial assistance up to Rs 18 lakh per FPO for management costs over 3 years.
  • Matching equity grant: up to Rs 2,000 per farmer-member, capped at Rs 15 lakh per FPO — this doubles the members' own share capital.
  • Credit guarantee cover up to Rs 2 crore of project loan per FPO from eligible lending institutions, making bank loans possible without heavy collateral.
  • Professional handholding for 5 years by a CBBO: registration, business planning, licences, market linkage, and training.

For the individual farmer: cheaper inputs through bulk buying, better selling prices through aggregation, access to processing/storage, and a real voice in a registered business they co-own.

How to apply

To join an existing FPO:

  1. Ask your district agriculture office, KVK, or block office which FPOs operate in your area.
  2. Apply for membership with the FPO and buy the member share.

To get a new FPO formed / bring your cluster into the scheme:

  1. Contact the implementing agencies — SFAC (sfacindia.com), NABARD, or NCDC — or your district-level committee.
  2. New FPOs under the scheme are formed by CBBOs on a produce-cluster basis; farmer groups can approach the CBBO working in their district.

For an FPO seeking the equity grant or credit guarantee:

  1. Apply through your implementing agency with the FPO's registration documents, member share records, and bank details (equity grant), or through the lending bank (credit guarantee).

Documents required

  • For a farmer joining: identity proof (Aadhaar), bank account, and the FPO's membership form.
  • For an FPO claiming benefits: certificate of incorporation/registration, shareholder list with share money receipts, board resolution, bank account details, and business plan — the implementing agency specifies the full checklist.

Key dates & status

  • Launched 29 February 2020; scheme outlay Rs 6,865 crore up to 2027-28.
  • 10,000-FPO target achieved February 2025. Handholding, equity grants, and credit guarantees for formed FPOs continue through the scheme period.
  • As reported at achievement: Rs 254.4 crore of equity grants released to 4,761 FPOs; credit guarantee cover worth Rs 453 crore issued to 1,900 FPOs.

Common questions

Q: What is an FPO in simple words? A company or cooperative owned by farmers themselves. Members pool their produce to sell in bulk and buy inputs together, so each farmer gets a better deal than selling alone.

Q: Does joining cost money? Yes, a small share purchase set by each FPO. The government then matches member equity (up to Rs 2,000 per member) through the equity grant to the FPO.

Q: The 10,000 target is met — can new FPOs still be formed? The formation target was reached in February 2025. Whether fresh FPO registrations under this scheme are still open — confirm with SFAC/NABARD or on the official portal.

Q: Does the Rs 18 lakh go to individual farmers? No. It funds the FPO's management costs (staff, office, compliance) so the collective can stand on its feet. Farmers benefit through the FPO's services.

Sources: https://static.pib.gov.in/WriteReadData/specificdocs/documents/2025/feb/doc2025228510101.pdf, https://sfacindia.com/Equity_grant.aspx, https://fpoodisha.nic.in/schemeDocsUploaded/EG%20&%20CGF%20for%20Formation%20&%20Promotion%20of%2010,000%20FPO_Scheme%20Guidelines.pdf, https://agriwelfare.gov.in. Last verified: 2026-08-07. Always confirm current details on the official portal before acting.