This document discusses the role of Farmer Producer Organizations (FPOs) in diversifying crops in India. It notes that India has become a leading producer of many agricultural commodities but now faces challenges of surplus management. The government's policies aim to promote crop diversification, increase farmer incomes, and boost agricultural exports. FPOs can help small farmers gain economies of scale and better market access. The government's FPO policy aims to form 10,000 new FPOs by 2027 to improve farming practices and link farmers directly to export markets. Specific FPO clusters for commodities like oranges, onions, tomatoes, potatoes, garlic and chilies are highlighted in Madhya Pradesh as examples.

1. Role of FPO
in
Diversification of Crops
Dr. Ravindra Pastor, CEO, E-FASAL

2. Current Cropping Pattern
 India's food grain production is estimated to rise 2.66 per cent to a new
record of 305.43 million tonnes in the current crop year 2020-21, on
better output of rice, wheat and pulses
 Rice production in kharif season 2021-22 is estimated to be 9.21 million
tonnes
 Wheat production is estimated to increase to a record 108.75 million
tonnes in 2020-21
 Pulses output is estimated at 25.56 million tonnes, a rise as compared with
23.03 million tonnes in 2019-20 crop yea
 The production of oilseeds is estimated at 36.56 million tonnes in 2020-21
 Sugarcane production is pegged at 392.79 million tonnes
 Total horticulture production — accounting for about 40% of gross value
added (GVA) in the farm sector — also reached an all-time high of 320.48
million tonnes

3. The New World Order
 India is now among the leading producers of milk, cereals, pulses,
vegetables, fruits, cotton, sugarcane, fish, poultry and livestock in the
world
 India has now reached a stage in which surplus food grain management has
become a major challenge Going forward,
 Shifting the terms of trade in favour of agriculture is the key to sustaining
this dynamic change and generating positive supply responses in
agricultural production

4. The Policy Response
 The priority is to move towards policy strategies that ensure a sustained
increase in farmers' income alongside reasonable food prices for
consumers.
 The RBI recommended that the focus must turn to crop diversification, de-
emphasising on water-guzzling crops, however politically difficult it may
be as well as promoting food processing.
 The RBI also stressed on agricultural exports that expose the Indian farmer
to international terms of trade and technology; and public and private
capital formation in the farm sector

5. The World Trade Dynamix
 India has consistently maintained trade surplus in the agricultural products
over the years.
 India’s agricultural and allied exports during 2019-20 were Rs. 2.52 lakh
Crores and imports were Rs. 1.47 lakh Crores.
 Even, during the difficult time of Pandemic, India took care not to disturb
the world food supply chain and continued to export.
 The export of Agri and allied commodities during Apr,2020 - Feb,2021
were Rs. 2.74 lakh Crore as compared to Rs. 2.31 Crore in the same period
last year indicating an increase of 18.49%.
 The commodities which posted significant positive growth in exports were
wheat, Other Cereals, Rice (other than Basmati), Soya meal, Spices, Sugar,
Raw Cotton, Fresh Vegetable, Processed Vegetables, and Alcoholic
Beverages etc.
 India has witnessed tremendous growth of 727 % for Wheat
export. significant growth of 132% in export of (Non-Basmati) Rice.
 India also enhanced export of Soya meals by 132%

6. The Agriculture Export Policy
 The Agriculture Export Policy was announced by Government of India in
2018 with a focus on agriculture export oriented production
 Export promotion, better farmer realization and synchronization with the
policies and programmes of Govt. of India.
 The AEP lays emphasis on farmer-centric approach.
 During the course of implementation of AEP, considerable progress has
been made in giving Farmer-Produce Organizations (FPOs) and farmers a
stake in the export of their produce.
 Direct linkage of FPOs/farmers with the export market has not only
improved farmers’ incomes but has also resulted in better farming
practices due to requirements of catering to the international markets.
 For the first time, the Department of Commerce has reached out directly
at cluster and farm levels to give farmers a stake in export of their
produce. The FPOs/ farmers have been sensitized about requirements of
export-oriented production.

7. Focus on Cluster and Brand India
 Focus on Clusters : There is a need to evolve and put in place institutional
mechanism for effective involvement and engagement of small and
medium farmers for entire value chain as group enterprise(s) within
cluster of villages at the block level for select produce(s)
 In order to provide direct export market linkage to farmers/FPOs and to
encourage export oriented production
 AEP advocates a cluster-based approach for promoting agriculture exports
 As part of the Agriculture Export Policy, 47 unique product-district clusters
have been notified for export promotion.
 The States have further identified around 100 more product-district
clusters, which would be evaluated and notified in due course.
 Marketing and promotion of “Brand India”

8. Export Target
 The policy is aimed at doubling agricultural exports from the current level
of $30 billion by 2022 and increasing them to $100 billion in the “next few
years
 Farmer Connect Portal - A Farmer Connect Portal has been set up on
APEDA’s website for providing a platform for FPOs/FPCs, cooperatives to
interact with exporters. Around 2360 FPO/FPCs and 2324 exporters have
been registered in the portal so far
 Traceability Systems – In order to ensure quality of exports and
establishing India as a reliable supplier of quality produce, traceability to
the farm level is vital. A number of digital platforms for traceability have
been developed for enabling smooth flow of business and ensuring
transparency in the system

9. Farmer Producer Organization Policy
 Small producers do not have the volume individually to get the benefit of
economies of scale.
 In agricultural marketing, there is a chain of intermediaries, who often
work non-transparently leading to the situation, where producer receives
only a small part of the value, which the ultimate consumer pays. This will
be eliminated.
 Through accumulation, the primary producers can avail the benefit of the
economies of scale. Farmers Producers have better bargaining power in
the form of bulk buyers of produce and bulk suppliers of inputs.
 The Government of India has approved and launched the Central Sector
Scheme of “Formation and Promotion of 10,000 Farmer Producer
Organizations(FPOs)” to form and promote 10,000 new FPOs till 2027-28
with a total budgetary outlay of Rs.6865 Cr.

10. Farmer Producer Organization Policy
 Formation of new Farmer-Producer Organisations (FPOs) through NABARD,
SFAC and NCDC has been initiated
 NABARD has provided a list of around 80 FPOs in the clusters identified
under AEP
 Capacity building of FPOs in each cluster is being initiated
 The major operations of Farmers Producer Organization (FPO) include the
supply of seed, machinery, market linkages & fertilizer, training,
networking, financial and technical advice
 The Farmers Producers Organizations are formed and promoted
through the Cluster-Based Business Organizations and engaged at the
State or Cluster level by implementing the agencies
 Farmer Producer Organization is promoted under “One District One
Product” to promote the specialization and better branding,
marketing, processing and exports by FPO

11. FPO Management Cost, Grant & Credit
Guarantee
 Under the scheme, financial support to Farmer Producer Organization
(FPO) @ up to maximum of Rs. 18 lakh / FPO or actual, whichever is lesser
is to be provided during three years from the year of formation. The
indicative financial support broadly covers
 Equity Grant shall be in the form of matching grant upto Rs. 2,000 per
farmer member of FPO subject to maximum limit of Rs. 15.00 lakh fixed
per FPO
 The credit guarantee cover per FPO will be limited to the project loan of
Rs. 2 crore, credit guarantee cover will be 75% of bankable project

12. Orange Cluster of Madhya Pradesh

13. Onion Cluster of Madhya Pradesh

14. Tomato Cluster of Madhya Pradesh

15. Potato Cluster of Madhya Pradesh

16. Garlic Cluster of Madhya Pradesh

17. Chili Cluster of Madhya Pradesh

18. Thanks
Contact
info@efasal.com
Mobile 7000876696