Farmer Producer Organisations (FPOs) 

Farmer Producer Organisations (FPOs) 

Subject: Economy

Context:

Govt moves to set up fodder-centric farmer producer organisations.

Details:

• The government has designated the National Dairy Development Board (NDDB) as the implementing agency, setting a target of 100 such FPOs in 2022-23.
• It will be set up under the scheme of formation and promotion of 10,000 Farmer Producer Organisations (FPOs) 
• It aims to form and promote FPOs–primarily fodder centric, and animal husbandry activities as a secondary activity (fodder plus model).
• The idea of setting up fodder-centric FPOs was first mooted by the Ministry of Fisheries, Animal Husbandry and Dairying in 2020, with the aim to address the fodder deficit situation in the country.
  • The high fodder inflation has a direct impact on rural livelihoods.

National Dairy Development Board (NDDB)

• It was founded in 1965 to replace exploitation with empowerment, tradition with modernity, stagnation with growth, transforming dairying into an instrument for the development of India’s rural people.
• The National Dairy Development Board, initially registered as a society under the Societies Act 1860, was merged with the erstwhile Indian Dairy Corporation, a company formed and registered under the Companies Act 1956, by the NDDB Act 1987, with effect from 12 October, 1987.
• The NDDB is an institute of national importance established by an act of the Indian Parliament and thus is a statutory body.
• National Dairy Development Board located at– Anand, Gujarat (HQ)
• It is under the Ministry of Animal Husbandry, Dairying and Fisheries
• It was founded by Dr Verghese Kurien, often called ‘India’s milkman’.
• It was set up to replicate the success of Amul to the whole of India.
• NDDB was created to boost, finance and support producer-owned and controlled organisations in the dairy industry.
• Its activities and programmes are aimed at augmenting farmer-owned institutions and it also supports national policies that are inclined towards the growth of such organisations.
• Its major success is Operation Flood-which ran from 1970 to 1996 (26 years) and transformed India into the largest producer of milk in the world. This is also called the White Revolution.
• The Board has integrated more than 1 lakh dairy cooperatives in the ‘Anand Pattern’.
  • Under this, the village-level society is linked to the state dairy federation in a three-tier structure.
• The NDDB also implementing the National Dairy Plan (NDP)
• NDDB’s subsidiaries include Mother Dairy, Indian Immunologicals Ltd., Hyderabad (IIL), Indian Dairy Machinery Company Ltd, Anand (IDMC) and NDDB Dairy Services.

What are Farmer Producer Organisations (FPOs) ?

• It is a type of Producer Organization (PO) where the members are farmers.
  • A Producer Organization (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members. In some forms like producer companies, institutions of primary producers can also become members of PO.
• FPOs are voluntary organizations controlled by their farmer-members who actively participate in setting their policies and making decisions.
• They are open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
• FPOs operatives provide education and training for their farmer-members, elected representatives, managers, and employees so that they can contribute effectively to the development of their FPOs.

Government’s Effort For Promotion of FPO

• Since 2011, it has intensively promoted FPOs under the Small Farmers’ Agri-Business Consortium (SFAC), NABARD, state governments and NGOs.
• The ongoing support for FPOs is mainly in the form of
  • Equity Grant Scheme–The Scheme is operated by the Small Farmers’ Agri-Business Consortium (SFAC). It aims to extend support to the equity base of Farmer Producer Companies (FPCs) by providing matching equity grants up to a maximum of Rs 15 lakh in two tranches.
  • Credit Guarantee Scheme-The scheme provides risk cover to banks that advance collateral-free loans to FPCs up to Rs 1 crore. Only about 1% of registered producer companies have been able to avail the benefits.
• Central Sector Scheme of Formation and Promotion of 10,000 FPOs-The scheme was launched by the Ministry of Agriculture & Farmers Welfare to form and promote 10,000 new FPOs till 2027-28. The scheme is being implemented by the SFAC, National Cooperative Development Corporation (NCDC), NABARD, NAFED among others.
  • While adopting a cluster-based approach, the formation of FPOs will be focussed on “One District One Product” for the development of product specialization.