Formation and Promotion of Farmer Producer Company in India

Introduction:

Agriculture is the backbone of the Indian economy, providing employment to millions of people and contributing significantly to the country’s Gross Domestic Product (GDP). Despite this, the sector faces several challenges, including low productivity, low profitability, and a lack of modern infrastructure. To address these issues, the Government of India has introduced various schemes and initiatives, including the formation and promotion of Farmer Producer Companies (FPCs).

What is a Farmer Producer Company?

A Farmer Producer Company is a type of producer organization that enables farmers to pool their resources and market their produce collectively. FPCs are registered under the Companies Act, 2013, and are owned and controlled by the farmers themselves. The primary objective of FPCs is to enhance the income and livelihoods of farmers by providing them with better access to inputs, technology, markets, and finance.

Benefits of FPCs:

FPCs offer several benefits to farmers, such as:

1. Improved bargaining power: FPCs enable farmers to collectively negotiate better prices for their produce, reducing their dependence on middlemen.

2. Access to credit: FPCs can avail credit from banks and financial institutions at lower interest rates, reducing their cost of capital.

3. Value addition: FPCs can undertake processing and value addition activities, such as grading, sorting, packaging, and branding, which increase the value of their produce and enhance their income.

4. Market linkages: FPCs can establish direct linkages with buyers, including government procurement agencies, exporters, and retailers, eliminating the need for intermediaries.

Formation of Farmer Producer Company:

To form an FPC, a minimum of ten farmers or two producer institutions can come together and apply for registration under the Companies Act, 2013. The process of registration involves the following steps:

1. Identify the farmers/producers who wish to form the FPC.

2. Obtain a unique name for the FPC from the Registrar of Companies.

3. Prepare the Memorandum of Association (MoA) and Articles of Association (AoA) of the FPC.

4. Apply for registration with the Registrar of Companies.

5. Once registered, the FPC can commence its activities.

Promotion of Farmer Producer Company:

The government of India has taken several initiatives to promote the formation of FPCs, such as the creation of the Small Farmers Agribusiness Consortium (SFAC) and the National Bank for Agriculture and Rural Development (NABARD). These institutions provide financial and technical support to FPCs, such as training in agricultural practices, marketing, and management, as well as financial assistance in the form of credit and subsidies.

To promote the formation of FPCs, the Government of India has launched several schemes and initiatives, including:

1. National Agriculture Market (e-NAM): e-NAM is an online trading platform that enables farmers to sell their produce directly to buyers anywhere in the country. FPCs can also participate in e-NAM and use the platform to sell their produce.

2. Pradhan Mantri Fasal Bima Yojana (PMFBY): PMFBY is a crop insurance scheme that provides financial support to farmers in case of crop loss due to natural calamities. FPCs can also avail of the benefits of the scheme.

3. Rashtriya Krishi Vikas Yojana (RKVY): RKVY is a central sector scheme that provides financial support to States for promoting agriculture and allied sectors. FPCs can avail of funding under the scheme for various activities, including setting up of infrastructure, marketing, and capacity building.