Long Term Partnership for sustainable FPO

Development models high jacket by Development mafia. They have created a consultancy model where maximum project funds go to them in the name of a subject matter specialist. Those are very good in English language and developing good project, projection, and power points presentation. But they don’t have any practical knowledge of the subject and business. There are institutions that are not part of the business. They are not partnering in profit or loss. Only they take their fee and support up to the project period only. After when the project gets over they have withdrawn their team and left unviable, impractical, unsustainable loss-making business and broken dreams of poor beneficiaries on the ground. After 70 years they not understand that businesses are running in day to day manner, not five years projections. If you see all the Guidelines issued by GoI or State Government are the same with lots of Jagran & five years projection. Newly issued guidelines for promoting FPOS are the same type. No change in 72 years.

The proposed business model is not inclusive model shareholders have not partnered of advance planning and commitment of their financial resources. Now farmers are getting money from KCC and PACS but working capital still required. Why not create a business model where no outside agencies are required. Why not farmers' wisdom and intelligence respected by the government. Are Farmers' homes are running by professionals' advice? or they are enough capabilities to handling their own affairs. They have practical knowledge, wisdom, and experience which is more important for agribusiness. If Governments are not confident enough they can create a long-term partnership model between Cluster-Based Business Organizations [CBBOs] and Farmers Producer Organisation [FPOs] Government of Madhya Pradesh created this model and runs successfully with civil society organizations and FPOs.

Budgetary provisions

The scheme on the formation and promotion of 10,000 FPOs is to be implemented till 2023-24 with budgetary support of Rs. 4496.00 crore. Since financial support excepting management cost is to be extended for five years, therefore, FPOs formed will be required to be financially supported till 2027-28, with the additional committed liability for the period from 2024-25 till 2027-28 of Rs. 2369.00 crore say Rs. 2370.00 crores. Thus, the total budgetary requirement up to 2027-28 would be Rs. 6866.00 crore. The budget requirement is to be met from the overall allocations of DAC&FW.

Payment of supervision charges to Implementing Agency (IA):

Implementing Agencies (viz. SFAC and NCDC) will be given upfront amount computed @ 3% of estimated annual expenditure in the form of supervision charges to meet the expenses incurred in the discharge of their duties and responsibilities; while additional amount computed @ 2% will be given to them based on their performance assessment. The supervision amount will be released in two installments and the second installment may be released after assessment of performance. This amount shall not include expenditure towards Credit Guarantee Scheme & Equity Grant. However, NABARD, as consented, will not charge any supervision charges for activities undertaken towards the formation and promotion of FPOs under the Scheme.

FPO Formation & Incubation Cost including

Cluster-Based Business Organizations CBBOs Cost and Cost of Monitoring & Data Management/MIS Portal including Cost of NPMA

The Formation and Incubation cost of CBBO, limited to a maximum of Rs. 25 lakh / FPO of support or actual which is lesser, is to be provided for five years from the year of formation.

FPO Management Cost

Under the scheme, financial support to Farmer Producer Organization (FPO) @ up to a maximum of Rs. 18 lakh / FPO or actual, whichever is lesser is to be provided during three years from the year of formation.

Provision for Equity Grant

Equity Grant shall be in the form of a matching grant up to Rs. 2,000 per farmer member of FPO subject to the maximum limit of Rs. 15.00 lakh fixed per FPO.

Credit Guarantee Facility

The credit guarantee cover per FPO will be limited to the project loan of Rs. 2 crores. In the case of a project loan up to Rs. 1 crore, credit guarantee cover will be 85% of bankable project loan with a ceiling of Rs. 85 lakh; while in case of project loan above Rs.1 crore and up to Rs. 2 crores, credit guarantee cover will be 75% of bankable project loan with a maximum ceiling of Rs. 150 lakh. However, for project loans over Rs. 2 crores of bankable project loan, credit guarantee cover will be limited maximum up to Rs.2.0 crore only.