Report on the Formation and Promotion of Farmer Producer Organisations (FPOs) and their Contribution to Sustainable Development Goals

Introduction and Scheme Overview

The Central Sector Scheme for the Formation and Promotion of 10,000 Farmer Producer Organisations (FPOs) was initiated on February 29, 2020, with a budgetary allocation of Rs 6,865 crore through 2027-28. The scheme has achieved a significant milestone by establishing 10,000 FPOs ahead of its March 2025 deadline, integrating nearly 30 lakh farmers. This initiative directly supports several Sustainable Development Goals (SDGs) by empowering small and marginal farmers, enhancing agricultural sustainability, and promoting inclusive economic growth.

Key achievements since the scheme’s inception include:

• Release of Rs 254.4 crore in equity grants to 4,761 FPOs.
• Issuance of credit guarantee cover worth Rs 453 crore to 1,900 FPOs.
• Significant inclusion of women, who constitute 40% of the FPO members, directly advancing SDG 5 (Gender Equality).

Core Objectives and Alignment with Sustainable Development Goals

The scheme’s objectives are fundamentally aligned with the 2030 Agenda for Sustainable Development. The primary goals are to create a supportive ecosystem for farmers that fosters sustainable income and socio-economic development within agrarian communities.

Strategic Objectives

• Promote Sustainable Livelihoods: To provide a supportive ecosystem for vibrant, income-oriented farming, contributing to the overall wellbeing of agrarian communities, in line with SDG 1 (No Poverty) and SDG 8 (Decent Work and Economic Growth).
• Enhance Sustainable Productivity: To improve productivity through efficient, cost-effective, and sustainable resource use and to secure higher returns via improved market linkages, addressing SDG 2 (Zero Hunger) and SDG 12 (Responsible Consumption and Production).
• Provide Comprehensive Support: To offer handholding support to new FPOs for five years, covering management, inputs, production, processing, market and credit linkages, and technology adoption, fostering SDG 17 (Partnerships for the Goals).
• Build Entrepreneurial Capacity: To deliver effective capacity building that develops agricultural entrepreneurship skills, enabling FPOs to become economically self-sustaining and contributing to SDG 8 (Decent Work and Economic Growth).

Operational Impact on Smallholder Farmers

FPOs are designed as collectives to address the systemic challenges faced by small, marginal, and landless farmers, thereby reducing inequalities and fostering inclusive growth as targeted by SDG 10 (Reduced Inequalities).

Addressing Agricultural Vulnerabilities

Smallholder farmers frequently encounter difficulties in:

• Accessing modern technology and quality inputs like seeds and fertilisers.
• Securing adequate financing.
• Marketing their produce effectively due to a lack of collective economic strength.

FPOs provide a framework for collectivisation, granting farmers the collective power to negotiate better terms for inputs, finance, and market access, which is crucial for enhancing income and achieving SDG 1 (No Poverty).

Mechanisms for Empowerment and Sustainable Growth

FPOs assist smallholder farmers in several key areas that directly contribute to the SDGs:

1. Achieving Economies of Scale: By aggregating purchases and sales, FPOs reduce input costs and secure better prices, promoting efficient resource use in line with SDG 12 (Responsible Consumption and Production).
2. Enhanced Credit Access: FPOs improve access to institutional credit, a critical barrier for smallholders, thereby promoting financial inclusion and contributing to SDG 1 (No Poverty).
3. Accessing Broader Markets: The collective structure enables smallholders to connect with national and international markets, fostering economic growth as per SDG 8 (Decent Work and Economic Growth).
4. Overcoming Land Fragmentation: With shrinking farm sizes, FPOs allow farmers to pool resources, invest in modern equipment, and improve productivity, supporting SDG 2 (Zero Hunger) and SDG 9 (Industry, Innovation, and Infrastructure).
5. Supporting Value-Addition and Processing: Shared infrastructure such as mini-mills and cold storage enables farmers to add value to raw produce, diversifying income streams and strengthening rural economies, which aligns with SDG 9 (Industry, Innovation, and Infrastructure).

Scheme Features and Implementation Challenges

Key Support Features

• Financial aid of up to Rs 18 lakh per FPO over three years.
• A matching equity grant of Rs 2,000 per farmer (up to Rs 15 lakh per FPO).
• Credit guarantee coverage for project loans up to Rs 2 crore.
• Cluster-based institutional support for a period of five years.

Identified Challenges

Despite progress, FPOs face several challenges that could impede their long-term sustainability and impact:

• Limited member exposure to modern agricultural practices and market standards.
• Lack of formal business and financial management training among FPO leadership.
• Minimal initial capital contribution from members, hindering investment in infrastructure and growth.
• Difficulty in accessing credit from traditional financial institutions, which often perceive FPOs as high-risk.
• Insufficient market intelligence to make informed production and sales decisions.

Conclusion and Future Outlook

The FPO initiative has successfully empowered millions of small and marginal farmers by fostering collectivisation, enhancing market access, and providing critical financial support. It has made substantial contributions to agricultural productivity, rural income generation, and gender equality, aligning closely with key Sustainable Development Goals. As the FPOs mature, they hold the promise of building a more equitable and resilient agricultural landscape in India.

However, for sustained impact, the focus must now shift from achieving numerical targets to ensuring the qualitative success and long-term viability of these organisations. Strengthening business management, improving financial literacy, and fostering robust market linkages will be critical for ensuring that FPOs continue to drive progress towards the SDGs.

Analysis of Sustainable Development Goals (SDGs) in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on Farmer Producer Organisations (FPOs) in India addresses several Sustainable Development Goals (SDGs) by focusing on agricultural development, farmer welfare, economic empowerment, and gender inclusion. The following SDGs are relevant:

• SDG 1: No Poverty – The scheme’s core objective is the “overall socio-economic development and wellbeing of the agrarian communities” and enhancing the income of small, marginal, and landless farmers, directly contributing to poverty alleviation.
• SDG 2: Zero Hunger – The initiative aims to “enhance productivity through efficient, cost-effective, and sustainable resource use” and improve access to quality seeds and fertilizers, which are fundamental to achieving food security and promoting sustainable agriculture.
• SDG 5: Gender Equality – The article explicitly states that the initiative has empowered women, noting that “40% of whom are women” among the nearly 30 lakh farmers brought together by the FPOs.
• SDG 8: Decent Work and Economic Growth – The FPOs are described as “contributing immensely to the growth of the agricultural sector” and fostering “agriculture entrepreneurship skills.” The epilogue mentions the initiative’s contribution to “rural job creation and economic resilience.”
• SDG 10: Reduced Inequalities – The scheme specifically targets “small, marginal, and landless farmers,” who face significant challenges. By helping them form collectives, the initiative aims to give them the “collective strength” to overcome these disadvantages, thereby reducing inequalities.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s description of the FPO scheme’s objectives and outcomes, several specific SDG targets can be identified:

1. Target 2.3: By 2030, double the agricultural productivity and incomes of small-scale food producers, in particular women, indigenous peoples, family farmers, pastoralists and fishers, including through secure and equal access to land, other productive resources and inputs, knowledge, financial services, markets and opportunities for value addition and non-farm employment.
   • Explanation: The article details how FPOs help smallholder farmers “enhance productivity,” “realise higher returns,” and achieve “faster enhancement of their income.” It also highlights improved access to “inputs; finance, and; market” and support for “value-addition & processing.”
2. Target 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life.
   • Explanation: The article supports this target by mentioning that the FPO initiative has empowered “millions of small and marginal farmers, including women” and that women constitute 40% of the farmers in these organizations, indicating significant participation in this economic activity.
3. Target 8.3: Promote development-oriented policies that support productive activities, decent job creation, entrepreneurship, creativity and innovation, and encourage the formalization and growth of micro-, small- and medium-sized enterprises, including through access to financial services.
   • Explanation: The FPO scheme is a clear example of a development-oriented policy. It aims to “provide effective capacity building to FPOs to develop agriculture entrepreneurship skills” and enhances “access to institutional credit” and financial aid, fostering the growth of farmer collectives as enterprises.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several quantitative and qualitative indicators that can be used to measure progress towards the identified targets.

• Number of FPOs established: The article states that a “transformative milestone by establishing 10,000 Farmer Producer Organisations (FPOs)” has been reached. This is a direct measure of the program’s scale.
• Number of farmers mobilized: The FPOs have collectively brought together “nearly 30 lakh farmers,” indicating the reach of the initiative among small-scale producers.
• Proportion of women farmers: The fact that “40% of whom are women” is a key indicator for measuring progress towards gender equality (Target 5.5).
• Financial support provided: The article mentions specific figures like “Rs 254.4 crore in equity grants have been released to 4,761 FPOs” and “credit guarantee cover worth Rs 453 cr has been issued to 1,900 FPOs.” These figures measure the financial inclusion and support being provided (relevant to Target 2.3 and 8.3).
• Economic activity: The statement that FPOs “are now conducting business worth thousands of crores of rupees” is an indicator of their economic viability and their contribution to farmer incomes and agricultural growth (Target 2.3 and 8.3).

4. Table of SDGs, Targets, and Indicators

Source: timesofindia.indiatimes.com