Linkage of FPOs with Industries
The Government of India is actively working to enhance farmers’ income by promoting direct marketing of their produce. This initiative aims to reduce reliance on middlemen and empower farmers through various strategic programs. Key measures include the formation of Farmer Producer Organizations (FPOs) and the establishment of a digital marketplace to facilitate direct transactions between farmers and buyers.
Formation and Promotion of Farmer Producer Organizations
One of the cornerstone initiatives is the implementation of the scheme for the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs). This program organizes farmers into collectives, allowing them to engage in direct marketing. By working together, farmers can negotiate better prices and terms with buyers, significantly improving their income potential. The government believes that collective bargaining will empower farmers and reduce their dependence on intermediaries.
Additionally, the National Agriculture Market (e-NAM) has been introduced to create a transparent and competitive online trading platform. This digital marketplace connects farmers and FPOs directly with traders, facilitating easier access to markets. The e-NAM platform is designed to enhance the visibility of farmers’ products and streamline the selling process, ultimately benefiting the agricultural community.
Linkages Between Industries and FPOs
To further support farmers, the government has initiated several measures to establish direct linkages between industries and FPOs. One such measure is the creation of Cluster-Based Business Organizations (CBBOs). These organizations play a crucial role in identifying and connecting FPOs with relevant industries, processors, and institutional buyers. By fostering these connections, the government aims to ensure better market access and fair price realization for farmers.
Regular Buyer-Seller Meets (BSMs) are also organized at both state and national levels. These events bring together industries and FPOs, providing a platform for exploring direct procurement opportunities. The government encourages FPOs to utilize digital market platforms, such as the Open Network for Digital Commerce (ONDC) and the Government e-Marketplace (GEM), to list their products and engage directly with buyers from various sectors, including agri-processing and retail.
Facilitating Market Access and Input Supply
The government is also facilitating the issuance of input licenses for FPOs, allowing them to supply essential agricultural inputs like seeds, fertilizers, and pesticides. This initiative helps FPOs establish business relationships with agri-input industries, further integrating them into the agricultural value chain.
As of June 30, 2025, over 9,000 FPOs have been onboarded onto the ONDC platform, with 216 FPOs listed on the Government e-Marketplace. These developments have enabled FPOs to sell their agricultural products digitally, enhancing their market reach. Furthermore, FPOs have established backward linkages with major agri-input suppliers and forward linkages with prominent companies in the food processing and retail sectors, such as ITC and Reliance.
Impact on the Agricultural Sector
The initiatives taken by the Government of India have led to increased formal linkages between FPOs and various industries, including food processing, retail, and agri-export. A total of 171 industries have partnered with 430 FPOs under the Small Farmers’ Agri-Business Consortium (SFAC) for the procurement of raw materials and finished agricultural products. This collaboration is expected to enhance the overall efficiency of the agricultural supply chain and improve the livelihoods of farmers across the country.
This information was shared by the Minister of State for Agriculture and Farmers Welfare, Shri Ramnath Thakur, in a written reply in the Rajya Sabha. The government’s commitment to empowering farmers through direct marketing and industry linkages is a significant step towards transforming the agricultural landscape in India.
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