New Delhi, August 4, 2026: 

The Government of India has successfully formed 10,000 Farmer Producer Organisations (FPOs) under the Central Sector Scheme "Formation and Promotion of 10,000 Farmer Producer Organizations", launched during 2020-21 to strengthen collective farming, improve market access and enhance farmers' incomes.

According to information shared in the Lok Sabha by Minister of State for Agriculture and Farmers' Welfare Shri Ramnath Thakur, the scheme has enabled FPOs to undertake a wide range of business activities, including agricultural input supply, aggregation and marketing of farm produce, value addition and processing, seed production, digital commerce through e-marketplaces, custom hiring services and export promotion.

Based on the audited financial statements for 2024-25, a total of 6,964 FPOs reported an annual turnover of up to ₹50 lakh, 862 FPOs recorded a turnover between ₹50 lakh and ₹1 crore, while 1,135 FPOs achieved a turnover of more than ₹1 crore, reflecting the growing business potential of farmer-owned enterprises.

The government is providing extensive financial and institutional support to strengthen FPOs during their formative years. Under the scheme, each eligible FPO receives financial assistance of up to ₹18 lakh over three years to meet management and operational expenses. In addition, a matching Equity Grant of up to ₹15 lakh is provided to strengthen the capital base, while a Credit Guarantee Facility covers project loans of up to ₹2 crore, improving access to institutional finance.

To ensure long-term sustainability, every FPO receives five years of handholding support through Cluster-Based Business Organisations (CBBOs) for capacity building, business planning, institutional development and market linkage facilitation. So far, the government has released ₹827.81 crore towards management costs and ₹631.98 crore as matching equity grants under the scheme.

The initiative has collectively brought together more than 65 lakh shareholders, the majority of whom are small and marginal farmers, enabling them to benefit from economies of scale and improved bargaining power.

The scheme has also significantly strengthened agricultural input distribution and value addition. As of now, 6,928 FPOs possess seed licences, 6,650 FPOs hold fertilizer licences and 4,987 FPOs have pesticide licences, allowing them to directly supply agricultural inputs to member farmers. Additionally, 5,765 FPOs have established their own processing units, while 3,083 FPOs have availed the Credit Guarantee Facility to access institutional finance for business expansion.

The government also referred to Policy Paper No. 144 published by the National Academy of Agricultural Sciences (NAAS), which recommends strengthening industry linkages, connecting institutional buyers with FPOs and enhancing collaboration between FPOs and agricultural research institutions to improve competitiveness and long-term sustainability.

The continued expansion of Farmer Producer Organisations is expected to play a key role in improving farmers' market access, increasing value addition, strengthening rural entrepreneurship and enhancing the overall resilience of India's agricultural sector.

Source: Press Information Bureau (PIB), Government of India.