Formation and Promotion of Farmer-Producer Organisations


There are more than 12.5 million farmer families in India, out of which about 85 per cent are small and marginal farmers whose size of the land is less than 1 hectare. Most of them face some challenges in production and post-production such as access to good agricultural practices, quality inputs at reasonable rates, seed production, credit, custom hiring, value-addition including processing and marketing.

Realising these challenges, the Government of India has undertaken a programme titled ‘Formation and Promotion of 10,000 Farmer-Producer Organisations’ (FPOs) to better serve India’s farm economy including ensuring food security by leveraging them as collectives through economies of scale in production and marketing.

The objectives are to reduce input costs to farmers by following good agricultural practices such as better use of irrigation water and to enable them get better prices of their produce through value addition and marketing.

Formation and promotion of FPOs are based on the identification of production clusters wherein agricultural and allied produce including horticultural produce of similar or of almost similar nature is grown/cultivated.

Production clusters are identified in consultations with respective District Level Monitoring Committee, State Level Consultative Committee as per recommendations of implementing agencies

The Project

Since 2021, CUTS Centre for Human Development (CHD) is an implementing partner of this programme in Rajasthan as a Cluster Based Business Organisation (CBBO) providing professional handholding support. So far, three agencies of the Government of India, namely the Small Farmers’ Agri-Business Consortium (SFAC), the National Bank for Agriculture and Rural Development (NABARD), and the National Cooperative Development Corporation (NCDC), have entrusted CUTS to establish 30 FPOs in the following five districts of Rajasthan.

  • Banswara: Arthuna, Bagidora, Banswara, Garhi, Ghatol, Kushalgarh, Sajjangarh, Talwara
  • Bharatpur: Bayana, Deeg, Kaman, Kumher, Nagar, Sewar
  • Bhilwara: Bijoliya, Hurda, Jahazpur, Kotri, Sahara
  • Chittorgarh: Badi Sadri, Begun, Bhadesar, Chittorgarh, Gangrar, Nimbahera
  • Pratapgarh: Dalot, Dhamotar, Peepalkhoont, Pratapgarh, Suhagpura

This follows CUTS’s knowledge and experience of establishing two FPOs – one in Bhilwara and the other in Chittorgarh district of Rajasthan in the year 2015 and ensuring their long-term sustainability including better income generation through good agricultural practices such as the use of organic fertilisers, solar pumps for optimal irrigation and better marketing with both public and private sector players.

Going forward, CUTS is expected to be entrusted with the responsibility of establishing 20 more FPOs in these and/or other districts of Rajasthan.

All of them are incorporated/registered either under Part IXA of Companies Act or under the Cooperative Societies Act of Rajasthan. In all these FPOs, approximately 300 farmers have become members (shareholders) and the aim is to increase this membership to at least 1000 in each of them.

At the end of this project, CUTS is expected to mobilise 50-60,000 farmers and facilitate the doubling of their income from agriculture and allied activities.


April, 2021 to March, 2026


As a CBBO, CUTS’s responsibilities include engaging specialists in the fields of crop husbandry, agricultural marketing and value addition including processing, social mobilisation, law and accounts, and IT/MIS (information technology and management information system) in agriculture and agriculture marketing.

Keeping in mind the above-mentioned broad heads, CUTS is undertaking the following activities:

  • Assist SFAC, NABARD and NCDC in cluster identification and implementation of the programme
  • Community mobilisation – baseline survey of farmers, cluster finalisation, value chain study, formation of Farmer Information Groups and assist in their periodic meetings including seeking assistance from local bodies in the identification of production clusters and mobilisation of farmers
  • Registration of FPOs and training of their Board of Directors on roles, responsibilities, management and capital/equity mobilisation
  • Training and capacity buildings of farmer groups – identification/assessment of training needs, development of training modules, conduct of training workshops and exposure visits
  • Encourage and promote social cohesiveness amongst the FPO members
  • Preparation and execution of FPO-specific Business Plan for their long-term sustainability of FPO including assisting them in their implementation
  • Regular interface with other important and relevant stakeholder groups such as various Government Departments, financial institutions, and training, research and development institutions such as Krishi Vigyan Kendras (organisations of the application of agricultural sciences) and agriculture universities at the cluster level
  • Assist FPOs in availing Equity Grant and Credit Guarantee Facility as per their need and growth prospects
  • Incubation/handholding services for sustainability – provide support and monitoring in terms of incubation activities for ensuring timely availability of quality inputs, market linkages and other business development plans
  • Facilitate the establishment of necessary common pool production, marketing and processing infrastructure by the FPOs for their long-term viability
  • Facilitate traceability, compliance and global market connectivity
  • Review and monitoring of the field team as per business plans and their desired outcomes
  • Assist in communication and dissemination of necessary and relevant information to farmers by way of crop and market advisory
  • Assist FPOs in ensuring compliances as per registration/incorporation requirements
  • Assist in federating FPOs as per districts for their business growth and expansion
  • Assist FPOs in proper financial management and utilisation of funds anmd their accounting including timely submission of returns and certificates

Assist implementing agencies in data collection and generating periodic MIS reports

Activities of the FPOs

FPOs are entrusted with conducting the following activities:

  • Timely delivery of quality inputs like seeds, fertilisers, pesticides at reasonably lower prices than those in open markets
  • Make available need-based production and post-production machinery and equipment like cultivator, tiller, sprinkler set, combine harvester on custom hiring basis for members to reduce the per unit production cost
  • Undertake aggregation of small produce so as to make them more marketable
  • Ensure value addition like cleaning, assaying, sorting, grading, packing and also farm level processing facilities on the basis of reasonable user charges including providing logistic services such as storage, loading/unloading, transportation on cost-sharing basis
  • Facilitate market information for taking better decisions on production and marketing
  • Better marketing of aggregated produce by negotiating with prospective public and private buyers
  • Implement business plan linked development activities in medium- and long-term for better viability and sustainability of the FPOs including higher income-generating allied activities like seed production, bee keeping, mushroom cultivation

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