Explained: What Ails Farmer Producer Organisations In India?
FPOs were meant to get together small and marginal farmers and help them improve their bargaining power. ETV Bharat explains the operational challenges they face.
Published : January 6, 2026 at 5:26 PM IST
|Updated : February 14, 2026 at 10:11 PM IST
By Chanchal Mukherjee
New Delhi: Launched by the Centre in 2020, the Farmer-Producer Organisation (FPO) initiative is facing operational challenges, with experts flagging lack of proper training and handholding as one of the key challenges faced by farmers.
Six years later, experts say FPOs face a brick wall as issues like training, maintenance of agricultural machinery, irregular fertiliser supply, obstacles in securing bank loans, and inadequate guidance for setting up farm units remain unresolved.
Prime Minister Narendra Modi had launched 10,000 FPOs across India from Chitrakoot in Madhya Pradesh on 29 February 2020. They are meant to enable farmers, who are primary producers, to come together as a group and improve their bargaining power, access to markets, and overall income. These farmer-owned entities are registered either under the Companies Act or under the Cooperative Societies Act of the respective states.
During the 2020 launch, the PM had said that the "collective strength" of the farmers "will now be used to get fair prices" to them.
The Hurdles?
Speaking to ETV Bharat, Sanjeev Kumar Premi, a member of one of the 1,246 FPOs in Uttar Pradesh (the highest among states), flagged the issues of bank loans and irregular supply chains.
"Although there is a provision for FPOs to obtain licences to store fertilisers, seeds, and pesticides, irregular supplies mean that they often do not receive fertilisers on time. Accessing bank loans is another major challenge, as credit is not easily available to us. These persistent issues continue to hamper the functioning of FPOs and need to be addressed systematically,” Premi said.
Dharmendra Malik, a UP-based agriculture expert and farmer, claimed that of around "50,000" FPOs, including 10,000 formed by the government, farmers aren't "skilled enough" to run it.
"Under the government's FPO model, the implementing agency further engages resource institutions called Cluster Based Business Organisations (CBBOs) to form and provide professional handholding support to FPOs, but FPOs are still lacking professional skills to run them,” Malik claimed.
CBBOs, according to him, only form the groups and register them, after which they are left "without providing them with any skills or support".
"About 40-45 percent of FPOs have not yet submitted their accounts report as per the Registrar of Companies, following which penalties are imposed on them. And around 40 percent of FPOs are not in a condition to run or are lying defunct. So, hardly 10 percent of FPOs are working," he said.
Echoing Malik, Vijay Sardana, another agriculture expert, said while the government created a model for FPOs, it has "failed" to equip farmers with the professional skills needed to run them effectively.
"Farmers are given only two days of training. What they truly need are professional skills. There is no issue of funding but skill,” Sardana told ETV Bharat.
Exact Number Of FPOs In India?
According to a 2024 paper published by the Tata-Cornell Institute here, there is no central organisation or agency that consolidates and reports figures, "making it impossible" to know the exact number of FPOs.
The reason, the paper says, is that the mandate to promote FPOs in India does not lie with one agency. Several nodal agencies, called promoting organizations, fund the formation of FPOs with the Small Farmers’ Agri-Business Consortium (SFAC), under the Ministry of Agriculture, and the National Bank for Agriculture and Rural Development (NABARD), being the two largest promoters of FPOs.
Additionally, organizations such as the National Cooperative Development Corporation (NCDC), National Agricultural Cooperative Marketing Federation (NAFED), and livelihood missions of various states also promote FPOs. Donor organizations, including corporate entities under Corporate Social Responsibility, also fund the promotion of FPOs in India.
The Tata-Cornell Institute, after extensive data verification and updates, says it arrived at a comprehensive list of 44,460 producer companies registered between January 1, 2003, and August 30, 2024.
"This includes 15,455 companies with complete financials; 11,482 companies incorporated before 2021 with complete financials; and detailed crop data for 2,129 producer companies and 722 cooperatives, all registered under various cooperative societies laws across India," the paper says.
Govt Acknowledges Challenges, Forms Committee
The central government has recognised the challenges FPOs face. Union Agriculture Minister Shivraj Singh Chouhan, during his visit to Tamil Nadu on January 5, 2026, said he held a meeting with the representatives of FPOs in Tamil Nadu and discussed the issues in detail.
"This meeting is not limited to Tamil Nadu only. This is an important opportunity to create an effective mechanism for resolving the challenges that FPOs are facing in other parts of the Country as well,” Chouhan then said.
Weeks after his remarks, the Agriculture Ministry, on January 28, constituted a high-level committee to strengthen FPOs in the southern state. The committee comprises representatives from NABARD, NAFED, SFAC-Tamil Nadu, ICAR–National Research Centre for Banana (NRCB), FPO representatives, NGOs and officials from the Department of Agriculture & Farmers Welfare.
According to the ministry, the committee will examine key issues affecting FPOs, including institutional governance and management practices, business operations and sustainability, technical support and extension linkages, aggregation, value addition and marketing challenges, as well as capacity-building and hand-holding requirements.
In addition, it will recommend measures to strengthen FPO operations through improved business and operational models, enhanced technical backstopping and advisory support, institutional convergence and coordination, and stronger market linkages and promotional activities.
The Committee will undertake field visits and hold consultations with FPOs, member farmers, market channels, processors, and other stakeholders to ensure that its recommendations are grounded in on-ground realities.
The Committee will submit its final report to the Department of Agriculture & Farmers Welfare within two months.
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