Over 10,000 Farmer Producer Organisations (FPOs) have been established under a Rs 6,865 crore Central scheme to empower small and marginal farmers through collective action. More than 1,100 of these FPOs have recorded turnovers exceeding Rs 1 crore, driven by access to digital platforms like ONDC, e-NAM, and GeM. They also benefit from input dealerships, financial support, and market tie-ups with major buyers. Notable examples such as Gujarat’s Babra Mandli highlight their success. With over 3 million farmers involved, FPOs are advancing sustainable, income-driven agriculture across the country.
As per data from the Union Ministry of Agriculture, over 10,000 Farmer Producer Organisations (FPOs) have been established across India since the launch of a special incentive scheme in FY21. Among these, more than 1,100 FPOs have recorded annual turnovers exceeding Rs 1 crore, with over 340 crossing the Rs 10 crore mark.
Many of these high-performing FPOs have achieved rapid growth by harnessing the power of digital platforms. Government-backed initiatives such as the Open Network for Digital Commerce (ONDC), electronic National Agriculture Market (e-NAM), and the Government e-Marketplace (GeM) have played a pivotal role in expanding their reach. Currently, over 9,000 FPOs are registered on ONDC, and more than 200 are actively selling their products on GeM. E-commerce giants like Amazon and Flipkart have also begun supporting FPOs in selling agricultural produce, further enhancing their visibility and market penetration.
One notable success story is the Gujarat-based Babra Khedut Utpadak & Rupantar Sahakari Mandli. With a membership of 1,465 farmers, the FPO reported sales worth Rs 102 crore, primarily through the procurement of groundnut and cotton at the Minimum Support Price (MSP) on behalf of government agencies. The FPO aims to expand its agri-inputs operations to accelerate growth in turnover.
FPOs are now engaged in selling thousands of agricultural and allied products, including over 200 varieties of rice, pulses, millets, mushrooms, honey, spices, and processed items. To help improve their operational and financial viability, these collectives are being given access to licences and dealerships for seeds, fertilisers, and pesticides. This enables them to function not just as sellers of farm produce but also as input suppliers for their members.
FPOs are legally registered under various frameworks such as the Companies Act, 2013, the Cooperative Societies Act of respective states, or the Multi-State Cooperative Societies Act. Many of these entities also benefit from financial schemes like the Agriculture Infrastructure Fund and Agricultural Marketing Infrastructure support.
In an effort to improve market linkages, the Ministry of Agriculture has initiated structured interactions between FPOs and large corporate buyers through webinars and consultations. Key buyers involved include Olam International, Big Basket, Britannia, Flipkart, Country Delight, and Mother Dairy, along with agencies such as GeM, Agricultural Processed Food Products Exports Development Authority (APEDA), farmers’ cooperative Nafed and Selco foundation.
The scheme extends a comprehensive set of financial incentives to help strengthen and expand farmer collectives. Each FPO is entitled to receive up to Rs 18 lakh in financial support over three years. It also offers matching equity grants of up to Rs 2,000 per farmer member, subject to a maximum of Rs 15 lakh per FPO. Additionally, a credit guarantee facility is provided for loans up to Rs 2 crore from eligible financial institutions.
Further, cluster-based business organisations working with FPOs are eligible for Rs 25 lakh per FPO over five years to support marketing and business development.
Launched by Prime Minister Shri Narendra Modi on 29th February 2020, the Central Sector Scheme for the “Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)” has a total budget allocation of Rs 6,865 crore, set to run until 2027–28.
About FPO
A Farmer Producer Organisation (FPO) is a collective term for farmer-led groups that are formally registered under either Part IXA of the Companies Act or the respective State Cooperative Societies Acts. These organisations are established to harness the power of collective action and economies of scale in the production and marketing of agricultural and allied products. The core idea behind FPOs is to enable farmers—who are the primary producers—to come together to strengthen their market position and reduce production costs.
To support the formation of such groups, the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India, designated the Small Farmers’ Agribusiness Consortium (SFAC) to assist State Governments in setting up FPOs.
In line with this vision, the government launched the “Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)” scheme. The primary objective of this initiative is to leverage economies of scale to enhance productivity through efficient, cost-effective, and sustainable use of resources. The scheme aims to promote income-oriented farming by reducing the cost of agricultural production and improving farmers’ income in a sustainable manner.
With more than 3 million farmers now part of these collectives, the government views FPOs as key to empowering small farmers. Plans are being considered to reward high-performing FPOs to motivate others and strengthen the overall ecosystem.
