Farmers Producer Organizations

Farmers Producer Organizations (FPO)

The objective of the concept of FPO is to organize farmers into a collective to improve their bargaining strength in the market. They are owned and governed by shareholder farmers and administered by their representatives. Ultimate objectives are better price discovery and better income enhancement opportunities for farmers in different way from procurement up to marketing.  Aggregation is an imperative necessity for small and marginal farmers for attaining economies of scale, accessing the market and for reducing transaction cost.

There is a need to make concerted efforts to promote and nurture producer companies. it offers great promise of being a win-win proposition for farmers as well as consumers. Kamlanayan Jamnalal Bajaj Foundation has an experience of establishing Grammonatti Farmers Producer Company, Seloo which is efficiently run by representatives of farmers. Considering this successful intervention NABARD had identified KJBF as Producer Organization Promoting Institution. It was mutually agreed to establish 10 FPOs in the cluster of WADI farmers (supported under WADI project by KJBF and NABARD.

To signal a support to them, the NABARD has decided to provide matching equity grants to registered FPOs up to a maximum of 9.06 lakh per FPO to enable them to leverage working capital. In this financial year 10 FPOs were registered in the area of Arvi, Karanja,Deoli,Seloo and Samudrapur. In order to support the FPOs in terms of strengthening their capacities frequent trainings, workshops and relevant exposures will be organized throughout the year.


Processes followed

The process of formation of FPO began through informing farmers about the benefits of producer company and developing their interest to become a part of it. The ideas and views shared by the community were incorporated in the business plan of the FPOs to develop the ownership of the company by the community representatives. The office bearers and governing body members were elected by the general body members of the companies. The companies were then registered under Company Act. Subsequently the business plan were separately evolved for each of the Farmers’ producer company and efforts are being continuously made to build the capacities of officer bearers of the companies for running the company.


Two FPOs were formed under CAIM project; one in Samudrapur while another in Seloo taluk. Out of 10 FPOs formed in collaboration with NABARD 3 were formed in Arvi taluk, 1 in Deoli taluk, 2 in Karanja taluk, 2 in Seloo taluk and 2 in Samudrapur taluk. 2460 farmers from 174 villages became shareholders of the 12 FPOs.

Seven FPOs (Seloo -3, Samudrapur – 2 and Arvi – 2)  had led successful initiative for collective purchase of single super phosphate and spray pumps for 485 shareholders. The total cost of purchase was Rs. 25,18,000 which had saved Rs. 3,33,800 for the farmers on purchase of these agricultural inputs.

Besides that Gramonnati Shetakari Producer Company Ltd Seloo established Soil Testing Laboratory, developed linkages for cotton growers to process cotton into bales, as well as established units of Amino acid production and extraction of oil.

Future plans:

FPOs had planned for collective sale of agricultural products like soyabean, pigeon pea and cotton directly to the merchants to improve the margin of profits for the farmers. They are also planning for supplying the produce to the Purak Rural Mall at Wardha after its establishment. This mall will be owned by Grammonnati Shetakari Producer Company.

Farmer Quote:

Shri. Ajay Dekate, Director of the “Gramonnati Shetakari Producer Company Ltd Seloo”:

“Processing and Value addition will surely add to the profits of the farmers than selling unprocessed farm produce. There is large scope for marketing of organic produce in metro cities and even in small cities like Wardha. I am very happy and proud that I have been given a first chance to lay down the road map towards prosperity. I am also thankful to my farmer brothers for trusting me.”