Over 50 lakh farmers become shareholders in 10,000 FPOs in 5 years
An increasing number of farmers are becoming shareholders in farmer-producer organisations (FPOs), with over 5 million farmers having taken equity in over 10,000 FPOs in the last five years, as per government data.
The trend of farmers increasing their share holdings in FPOs has led to enhanced local aggregation and lower production costs through economies of scale.
It resulted in the collectivisation of small and marginal farmers, allowing member farmers to access cheaper agricultural inputs, including fertilisers, crop protection products, and equipment, as per government officials.
Women farmers hold a 38 per cent share in these collectives. FPOs aim to increase farmers' income and provide small farmers with direct access to significant market benefits, bargaining power and improved market access.
Telangana with 0.67 million shareholders, Uttar Pradesh with 0.59 million shareholders, Andhra Pradesh (0.57 million), Madhya Pradesh (0.32 million), and Maharashtra (0.3 million) together represent 50 per cent of total shareholders, as per data from the agriculture ministry.
The initiative to form 10,000 FPOs, backed by a budget of Rs 6,865 crore over five years, was launched in February 2020. In FY25, the cumulative turnover of FPOs crossed Rs 15,282 crore.
These collectives were registered under various provisions, including the Companies Act, 2013, for farmer-producer companies, the State Cooperative Societies Acts, and the Multi-State Cooperative Society Act.
To sustain these collectives, the government offers a matching grant of up to Rs 2,000 for each farmer member of the FPO, with a maximum limit of Rs 15 lakh per collective.
Over 5,880 FPOs hold seed licenses and over 5,500 farmer collectives are licensed to distribute fertilisers. More than 400 FPOs operate dealerships for agrochemical distribution, ensuring that dealer discounts are passed on to member farmers.
Further, over 200 collectives are selling products on platforms like GeM, while sales of agricultural products have started significantly through Amazon and Flipkart.
Over 1,100 farmer-producer organisations (FPOs), of the total 10,000 launched under the Centre's special incentive scheme, have succeeded in crossing a business turnover of Rs 1 crore, according to figures compiled by the Ministry of Agriculture and Farmers Welfare.
