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From Chapter 2 “Farmer Producer Organisations” by Anish Kumar and Aneesha Bali (NAFPO) and some intel from Chapter 4 “Ecosystem Development: Strengthening of FPOs”
Total budget allocation for promoting 10,000 FPOs over 9 years (2019/20 to 2027/28) is 6,624 crore INR or ~$828mn. It breaks down to the following:
FPO Formation and Incubation incl CBBO costs (38%): Rs 2.5 million/ FPO for 5 years.
FPO Management Cost (27%): Rs 1.8 million/ FPO for 3 years. “This covers the salary of the CEO and registration FPO office establishment cost.”
Equity grants (23%): Rs 1.5 million/FPO: “matching equity grant up to Rs 2,000 per farmer member of FPO, with a limit of Rs 1.50 million per FPO. Equity Grant is aimed at strengthening the financial base of the FPO, enabling it to get credit from financial institutions.”
Credit Guarantee Fund (11%): up to Rs 20 million project loans per FPO from the eligible lending institution to ensure institutional credit accessibility to FPOs.
Monitoring and data management/MIS Portal (less than 1%)
Capacity Building through Specialized Training institutes (less than 0.5%). Institutions like Bankers Institute of Rural Development (BIRD), Lucknow and Laxmanrao Inamdar National Academy for Co-operative Research & Development (LINAC), Gurugram have been chosen as the lead training institutes for capacity development and training of FPOs. Training and skill development modules have been developed to further strengthen the FPOs.
See p. 88 to 96 for a list of existing capacity building programs
So far, Rs 2,491 million INR or ~$31mn has been released to all IAs (as of summer 2022)
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Promoting institute might be a useful selection criteria as we identify type of groups to work with. Shalu Umapathy (Unlicensed) alesha (Unlicensed) |
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From Chapter 4 “Ecosystem Development: Strengthening of FPOs”
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The following are the broad types of credit requirements:
Finance for input purchase and supply to members and non- members, typically on a cash and carry basis; could range from 30 to 60 days.
Trade finance for fulfilling buyer orders for produce by paying farmer suppliers upfront and receiving payment from the buyer in due course; a cycle that could vary from a week to 60 to 90 days.
On-lending to FPO members by borrowing from higher-level agencies and being a pass-through institution.
Borrowing for establishing infrastructure and asset financing which could be as simple as a small transport van to an integrated processing facility; requires a term loan.
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