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CCEA approves formation of 10,000 FPOs by 2024 to boost income of farming community
Feb-20-2020

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved a new central sector scheme ‘Formation and Promotion of Farmer Produce Organizations (FPOs)’ to form and promote 10,000 new FPOs in five years period from 2019-20 to 2023-24 with budgetary support of Rs 4,496 crore as part of its efforts to cut production cost and boost income of farming community.  Further, an amount of Rs 2,369 crore has been estimated for hand-holding of these FPOs during 2024-25 to 2027-28 period, taking the total size to Rs 6,865 crore.

The scheme also envisages a further committed liability of Rs 2,369 crore for 2024-25 to 2027-28 period towards hand-holding of each FPO for five years from its aggregation and formation, taking the total size to Rs 6,865 crore. There will be three implementing agencies to form and promote FPOs, namely Small Farmers Agri-business Consortium (SFAC), National Cooperative Development Corporation (NCDC) and National Bank for Agriculture and Rural Development (NABARD). States may also, if they desire, nominate their implementing agency in consultation with Union Agriculture Ministry. The scheme is likely to create 1.5 lakh jobs.

Small and marginal farmers do not have economic strength to apply production technology, services and marketing including value addition. Through formation of FPOs, farmers will have better collective strength for better access to quality input, technology, credit and better marketing access through economies of scale for better realization of income. Initially, the minimum number of members in FPO will be 300 in plain areas and 100 in North East and hilly areas. However, the minimum number of membership can be revised with approval of Union Agriculture Minister.

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