Answer: FPOs are collective entities formed by farmers, where they come together to pool their resources, knowledge, and skills for better agricultural practices, enhanced market access, and improved profitability. In the last 8-10 years, around 6000 FPOs have been formed through initiatives of SFAC, NABARD, State Governments etc.      

Farmer Producer Organizations (FPOs) can significantly contribute in increasing farmers' income in the following ways:

• Collective Bargaining Power: FPOs bring farmers together, enhancing their bargaining power when dealing with buyers, processors, and retailers.
• Economies of Scale: FPOs pool resources and products from multiple farmers, enabling bulk purchasing of inputs like seeds, fertilizers, and machinery. This reduces individual costs and ensures access to quality inputs at lower prices, leading to cost savings.
• Value Addition and Processing: FPOs can establish processing units for grading, packaging, and processing agricultural products.
• Skill Enhancement and Training: FPOs provide training to farmers on modern farming techniques, crop management, and best practices.
• Financial Inclusion: FPOs help farmers access credit, insurance, and government schemes by acting as a collective entity.
• Access to Technology: FPOs can invest in and share modern agricultural technologies such as precision farming, drip irrigation, and advanced machinery.

FPOs need adequate support and proper ecosystem in the following areas for their success:

• Promote Collaborative farming: The FPOs need to be formed on the basis of adjoining land holdings and common produce to ensure higher economies of scale and undertake value addition.
• Finances: The reluctance of Banks to give loans must be countered through enhanced credit support from Government agencies. Further, just like cooperatives, the FPOs also must be given income tax exemption.
• Handholding: There is a need to provide regular training and business level hand-holding to the new FPOs.
• Professional Management: It can be improved by enabling the Private sector to invest in FPOs. This will need amendment of Companies Act which currently allows only farmers to be producer members.
• Market Linkages: Direct procurement by Government; freight subsidy to wholesale buyers; connecting FPOs to online platforms etc.
• Village Producer Organizations (VPOs): The VPOs can be developed as a joint venture of FPOs such that an entire village region is developed for a predetermined set of agricultural produce with post-production activities.
• For example, a region having strength in producing fibre crops can be developed as a VPO to include small handloom weavers.

Promotion of FPOs should not be seen as a one-time exercise. Government must provide for sustained and continuous support until the time the FPOs become financially viable and independent.