Formation and Promotion of 10,000 Farmer Producer Organisations (FPOs)

A single small farmer has no bargaining power — too little volume to interest a bulk buyer, too little capital to store or process. A Farmer Producer Organisation aggregates members so the collective can do what no member could alone.

The problem has always been the first few years, before an FPO has the volume to cover its own costs. This scheme funds exactly that period.

It was launched in 2020 with an outlay of ₹6,865 crore. The allocation for 2026-27 is ₹500 crore, which is 14% lower than the 2025-26 revised estimate — worth knowing if you are planning around it.

• The matching equity grant matches what members put in, with a maximum member contribution of ₹2,000 per farmer counted towards it.
• The CBBO is a professional agency paid for by the scheme to handhold the FPO — registration, business planning, compliance and market linkage. This is support in kind rather than cash to the FPO, and it is often the most useful part in year one.
• FPOs formed under this scheme can also access Agriculture Infrastructure Fund loans with 3% interest subvention and FPO-specific credit guarantee through NABSanrakshan.

• Small and marginal farmers, grouped into a Farmer Producer Organisation.
• The FPO is the beneficiary entity; individual farmers participate as members.
• Formation is facilitated through implementing agencies and the Cluster Based Business Organisations attached to them.

• Management support runs for up to 3 years and CBBO support for up to 5 years. After that the FPO must cover its own costs, which is the point at which many fail — so ask what the business plan assumes about year four.
• The equity grant is matching, so it requires member contributions first.
• An existing FPO already supported under another scheme may not be eligible for a second round of the same support.

How to form or join an FPO

1. Approach your district agriculture office, or one of the implementing agencies — SFAC, NAFED, NCDC, NABARD or your state's designated agency.
2. The agency links you to a Cluster Based Business Organisation, which handles registration and the business plan. You do not pay the CBBO; the scheme does.
3. Members contribute equity — up to ₹2,000 per farmer counts towards the matching grant.
4. Once registered, apply for the matching equity grant and the annual management support through the CBBO.

Two questions worth asking at the start: what the FPO will actually sell or buy in bulk in its first year, and who the buyer is. An FPO with grant support but no business is a common and avoidable outcome.

Open the official FPO portal

• Land records of member farmers showing small or marginal status
• FPO registration documents (company or cooperative)
• Member list with equity contributions
• Business plan prepared with the CBBO
• FPO bank account details