Introduction

A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A PO can be a producer company, a cooperative society or any other legal form which provides for sharing of profits/benefits among the members. In some forms like producer companies, institutions of primary producers can also become member of PO. FPO [farmer producer organization] is one type of PO where the members are farmers. Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs. PO is a generic name for an organization of producers of any produce, e.g., agricultural, non-farm products, artisan products, etc.

Should it be a legal entity?

It is preferable for the PO to work as a legal entity. Only such an entity can enter into legally valid contracts including mobilization of funds from other institutions. There are specific Acts under which the PO could be registered. It is also possible for a PO to migrate from one legal form to another. While choosing a legal form, the following factors may be kept in view:

a. Primary producers should benefit from the surplus generated by the PO.

b. Process of Registration should not be too demanding in terms of time and resources.

c. The legal form needs to fit into its business needs, organizational priorities, social capital and management capacity.

In brief, the PO could undertake the following activities: a. Procurement of inputs b. Disseminating market information c. Dissemination of technology and innovations d. Facilitating finance for inputs e. Aggregation and storage of produce f. Primary processing like drying, cleaning and grading g. Brand building, Packaging, Labeling and Standardization h. Quality control i. Marketing to institutional buyers j. Participation in commodity exchanges k. Export

Evolution in India

Government Initiatives

• Government of India through Small Farmers’ Agribusiness Consortium (SFAC), a registered society under Department of Agriculture, Cooperation & Farmers Welfare, Government of India, is promoting FPOs by mobilizing the farmers and help them in register as companies and  providing them with handholding support and training for their sustainability. So far, SFAC has helped 827 FPOs in registering as companies.
• In addition to above, under Deendayal Antyodaya Yojana- National Rural Livelihood Mission (DAY-NRLM), Ministry of Rural Development, Government of India, is promoting FPOs by mobilizing farmers. So far, 131 registered FPOs have been promoted under the Mission.
• Further, National Bank for Agriculture and Rural Development (NABARD) is also promoting FPOs in the States and has so far promoted 4234 FPOs. 
• FPOs are provided assistance under various schemes of Government of India such as Venture Capital Assistance (VCA), Mission for Integrated Development of Horticulture (MIDH) and Agriculture Market Infrastructure Scheme (AMI). Additionally, SFAC and NABARD have facilitated training to Board of Directors and Chief Executives Officers of FPOs to enable them to function effectively.

Prospectively, FPOs can help in ensuring a trasition of a farmer to an agripreneur through their efforts at both forward and backward levels in India. This would also go a long way in realising the dream of Doubling Farmers' Income by 2022-23.