INTRODUCTION

A Producer Organisation (PO) is a legal entity formed by primary producers, viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A PO can be a producer company,a cooperative society or any other legal form which provides for sharing of profits/benefits among the members. In some forms like producer companies, institutions of primary producers can also become member of PO.

Farmers Producer Organisation (FPO) is one type of PO where the members are farmers. Small Farmers’ Agribusiness Consortium (SFAC) is providing support for promotion of FPOs. PO is a generic name for an organization of producers of any produce, e.g., agricultural, non-farm products,artisan products etc.

WHAT IS A FARMER PRODUCER COMPANY?

A Farmer Producer Company (FPC) can be formed by any 10 or more primary producers or by two or more producer institutions, or by a contribution of both. An FPC is a hybrid between cooperative societies and private limited companies. The Farmer Producer Companies, registered under the Indian Companies Act, 2013, have democratic governance, each producer or member has equal voting rights irrespective of the number of shares held.

NEED OF FARMERS PRODUCER ORGANISATION (FPO)

The main aim of FPO is to ensure better income for the producers through an organization of their own. Small producers do not have the volume individually (both inputs and produce) to get the benefit of economies of scale. Besides, in agricultural marketing, there is a long chain of intermediaries who very often work non-transparently leading to the situation where the producer receives only a small part of the value that the ultimate consumer pays.
Through aggregation, the primary producers can avail the benefit of economies of scale. They will also have better bargaining power vis-à-vis the bulk buyers of produce and bulk suppliers of inputs.

ESSENTIAL FEATURES OF A PRODUCER ORGANISATION (PO)

  1. It is formed by a group of producers for either farm or non-farm activities.
  2. It is a registered body and a legal entity.
  3. Producers are shareholders in the organization.
  4. It deals with business activities related to the primary produce/product.
  5. It works for the benefit of the member producers.
  6. A part of the profit is shared amongst the producers.
  7. Rest of the surplus is added to its owned funds for business expansion.