By TIOL News Service

NEW DELHI, FEB 10, 2021: IN a bid to double agricultural exports by 2022, the Central government has allocated Rs. 6,865 crore to a new scheme to set up 10,000 new Farmer Producer Organisations (FPOs), said the Ministry of Agriculture and Farmers Welfare on Tuesday.

The ministry noted more than 86 per cent of farmers in the country are small and marginal.

"There is a need to facilitate our farmers with access to improved technology, credit, better input and more markets to incentivise them to produce better quality commodity. For this, aggregation of small, marginal and landless farmers into FPOs will help enhance economic strength and market linkages of farmers for enhancing their income," it added.

Prime Minister Mr Narendra Modi had launched the Central sector scheme, Formation and Promotion of 10,000 FPOs in February last year, announcing that the government would spend Rs. 5,000 crore in the next five years to strengthen FPOs.

"The farmers have always been producers, but with the help of FPOs, they can now trade in farm produce. They will sow crop and also act as skilful traders to get the right prices," he had said then.

He had called for FPOs to be formed at each block level for deeper percolation of all Central schemes for farmers.

The Agriculture Ministry said on Tuesday that FPOs are being developed in "One District One Product" clusters for leveraging economies of scale, promoting specialisation and improving market access for members.

During 2020-21, a total of 2,200 FPO produce clusters have been allocated with 369 to be formed during the current year in 115 aspirational districts. They will be each be provided financial assistance of up to Rs 18 lakh per year, for a period of three years.

In addition, a provision has been made for matching equity grant of up to Rs. 2,000 per farmer member of FPO with a limit of Rs. 15 lakh per FPO and a credit guarantee facility up to Rs. 2 crore of project loan per FPO from eligible lending institution to ensure institutional credit accessibility.

"Formation and promotion of FPOs is the first step for converting krishi (farmer) into Aatmanirbhar Krishi," said the ministry.

This will enhance cost effective production and productivity and higher net incomes to the member of the FPO, it said. The move would also help improve rural economy and create job opportunities for rural youths in villages itself.