Government of India has announced the scheme during Union Budget for the year 2019-20 and scheme was launched on 29 February 2020 by Hon’ble Prime Minister for promotion of 10,000 FPOs across the country over the period of next five years
Highlights of the Scheme
- NABARD, SFAC and NCDC to act as Implementing Agencies initially.
- Formation and promotion of FPOs is based on “produce clusters” approach
- DAC&FW would allocate clusters and States, to the Implementing Agencies on the recommendation of National level Project Management Advisory and Fund Sanctioning Committee (N-PMAFSC).
- FPOs shall be registered either under Part IXA of Companies Act or under States’ Cooperative Societies Act (including Multi-State Coop. Act)
- Implementing Agencies will set up “Cluster-Based Business Organizations” (CBBOs) with 4-5 experts to provide handholding support to FPOs.
- CBBOs will be set up at the State/Cluster level which by themselves or by engaging other agencies will form and promote FPOs.
- An FPO shall have a minimum farmer-members size of 300 in plains and a size of 100 in Hilly and North Eastern regions.
- Grant assistance towards Management and Incubation per FPO will be Rs. 25 lakh or actual, whichever is lesser, which would be provided for 5 years from the year of formation
- Financial support up to Rs. 18 lakh /FPO or actual (whichever is lesser) would be provided for 3 years from the year of formation of FPO, to cover the administrative expenses, including salary of CEO, registration of FPO, for availing services of experts for statutory compliances, etc.
- Eligible lending institutions can avail Credit Guarantee cover, ranging from 75% to 85% of the quantum of loan, with a maximum ceiling of Rs. 1.50 crore per FPO.
- A National Project Management Agency (NPMA) will be set up at SFAC. The NPMA could be a consortium of professionals from the domain of social mobilization & FPO formation, agri-business development for FPOs, value chain and processing, IT in agriculture and related background.