EXTRAORDINARY

PUBLISHED BY AUTHORITY

No. 78 CUTTACK, THURSDAY, JANUARY 10, 2019/PAUSA 20, 1940

AGRICULTURE & FARMERS’ EMPOWERMENT DEPARTMENT

NOTIFICATION

The 8th January, 2019

Subject: Odisha Farmer Producer Organizations (FPO) Policy, 2018.

No.623–Hort (NHM)-32/2018/DAFE.— The Odisha Farmer Producer Organizations

(FPO) Policy has been formulated to create a conducive environment for Farmer Producer

Organizations (FPOs) by integrating and promoting the activities involved in the field of

Agriculture and allied sector, Food Processing, Agri-Business, Warehousing and Logistics

sectors through focused attention, global technologies and necessary infrastructure

facilities. It has been planned to be a harbinger of change and will act as a catalyst in the

income and economic growth of farmers of Odisha across the State resulting in higher

scale employment generation in rural areas through people, public and private

partnerships. It was prepared in consultation with all the stakeholders.

2. The policy aims to achieve the following:—

2.1.1. Empower the FPOs to successfully deal with challenges and constraints

that confront farmers.

2.1.2. Offer the FPOs to forms of aggregation and investments in irrigation,

storage, processing etc. leaving land titles with individual producers.

2.1.3. Support and encouragement to the formation of FPOs for the mutual

benefit of farmers as well as industry.

2.1.4. Maximize direct and indirect employment generation.

3. The Odisha Farmer Producer Organizations Policy emphasizes on registration of

FPOs, Schemes for FPOs, Enabling Ecosystem for FPOs, services rendered by the FPOs,

Appointment of Nodal Agency, institutional support and monitoring. The institutional

arrangements to support Odisha Farmer Producer Organizations (FPO) Policy are State

Level Consultative Committee and District Level Consultative Committee. Director of

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Horticulture will be the coordinating Resource Institution (RI) for the State of Odisha. All

allied Departments will have their own RIs & Project Management Unit (PMU).

4. Funding will be made through convergence of funds from the existing schemes of

relevant departments like MIDH, RKVY, State Plan etc. Further a Corpus Fund with an

allocation of Rs. 100.00 Crore per year shall be setup with Department of Agriculture and

Farmers’ Empowerment to support FPOs, RIs, Producer Organization Promoting

Institutions (POPIs) and PMU in all sectors as per Small Farmers’ Agri-Business

Consortium (SFAC) norm.

5. The Odisha Farmer Producer Organizations (FPO)Policy has been approved by

the State Cabinet in its 66th meeting held on 29th December, 2018 as communicated vide

Memo No. 6992/CAB-22/2018, 29th December, 2018 of Parliamentary Affairs Department.

6. A copy of the Odisha Farmer Producer Organizations (FPO)Policy, 2018 is

enclosed for wide publication.

ORDER

Ordered that the notification be published in the Extraordinary issue of

Odisha Gazette and copy thereof be forwarded to all Departments of Government / all

Heads of Department / Accountant General (A & E), Odisha / all RDCs / all Collectors / all

DDAs / all DDHs / all P.D., Watershed.

By Order of the Governor

Dr. SAURABH GARG

Principal Secretary to Government

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ODISHA FARMER PRODUCER ORGANISATIONS (FPOs)

POLICY, 2018

DEPARTMENT OF AGRICULTURE & FARMERS’ EMPOWERMENT

GOVERNMENT OF ODISHA

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Contents

1. Preamble

1

2. Definition

1

3. Vision

1

4. Mission

1

5. Objective

2

6. Scope and Coverage

2

7. Policy Period

2

8. Framework

2

8.1

Registration of FPOs

2

8.2

Schemes for FPOs

3-4

8.3

Enabling Ecosystem for FPOs 4-5

8.4

Services to be rendered by the FPOs

5-6

8.5

Appointment of Nodal Agency

6-7

8.6

Financial Support by Government of Odisha 7

8.7

Institutional Support by Government of Odisha

7-8

8.8

Review and Monitoring of RIs and POPIs 8

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ODISHA FARMER PRODUCER ORGANISATIONS POLICY, 2018

1. Preamble:

The Government of Odisha plans to create a conducive environment for FPOs by

integrating and promoting the activities involved in the field of Agriculture and allied sector, Food

Processing, Agri-Business, Warehousing and Logistics sectors through focused attention, global

technologies and necessary infrastructure facilities.

Collectivisation of producers, especially small and marginal farmers, into producer

organisations has emerged as one of the most effective pathways to address the many challenges

of agriculture but most importantly it will lead to improved access to investments, technology,

inputs and markets.

This FPO policy shall be a harbinger of change and will act as a catalyst in the income

and economic growth of farmers of Odisha across the State resulting in higher scale employment

generation in rural areas through people, public and private partnerships.

2. Definition:

A Farmer Producer Organization (FPO) is typically a society/company consisting of only

practicing farmers irrespective of land holding status, who are also actual producers of a specified

commodity/ commodities, and is formed under the Cooperative Societies Act, 1962 or as a

Farmers Producer Company (FPC) under Section 581 (C) of the Indian Companies Act, 1956, as

amended in 2013. FPOs have generally been recognised as the most appropriate institutional form

around which Government can mobilise farmers and build their capacity to collectively leverage

their production and marketing strength. These organizations are created at the cluster, block,

district or State level depending upon the needs of the producers considering the demand potential

to adopt value chain approach to enhance farmers’/producers’ economic and social benefits.

3. Vision:

To position Odisha in a sustained growth path and generating higher returns to farming

communities by establishment of FPOs in the sectors of Agriculture, Horticulture, Fisheries, Dairy,

and Animal Husbandry. These Producer Organizations would be facilitated with new technology,

infrastructure, knowledge, IT applications, market intelligence & linkage and credit and finance

arrangements so that they can ensure availability of end to end services to their members.

4. Mission:

To make Odisha the most sought-after investment destination for agribusiness and food

processing sectors with focussed attention and handholding support to FPOs in production,

aggregation, storage, processing, distribution and marketing of agriculture and allied sector

resources for sustainable development thereby generating large scale employment in rural and

semi urban areas.

5. Objective:

The policy aims to achieve the following objectives:-

a. The FPOs will successfully deal with challenges and constraints that confront farmers by

leveraging collective strength and bargaining power to access financial and non-financial

inputs, services and appropriate technologies, reduce transaction costs, tap high value

markets and enter into partnerships with private entities on more equitable terms.

b. The FPOs will offer forms of aggregation and investments in irrigation, storage,

processing etc. leaving land titles with individual producers and will use the strength of

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collective planning and bargaining for production, procurement and marketing, so that

considerable value is added to the members’ produce.

c. The Policy envisages the support and encouragement to the formation of FPOs for the

mutual benefit of farmers as well as industry. This will ensure improvement of

production, productivity, direct linkages, and higher unit value realisation for the farmers

and easy and cost effective access to specific quantum and quality of raw material

required by the industry.

d. The Policy aims at maximizing direct and indirect employment generation through

establishment of marketing outlets, creating necessary supply chain like sorting and

grading yards, transportation, warehouses and cold storages.

6. Scope and Coverage:

The Policy shall provide direction, incentives and exemptions over and above the FPO

Policy of Government of India, Manual for FPOsby NABARD, Standard operating manual of

Producer Company by NRLM and any other existing Policy applicable for the State.

7. Policy Period:

The Odisha FPOs Policy, 2018 will remain in operation from the date of its notification

until substituted by another Policy.

8. Framework:

8.1 Registration of FPOs

8.1.1 The membership of FPOs will be restricted to real Primary Producers. National

Policy (Policy and Process Guidelines for Farmer Producer Organization, 2013

recommends size of FIG (Farmer Interest Group) to be 15-20 and making an FPO

by aggregating 50 to 70 such FIGs, which makes average size of FPO to be

approximately 1000. Also, NABARD’s Manual for Producer organizations suggests

ideal size of FPO as of 700 to 1000 farmers. Although the preferred size of FPO

should be between 500 to 1000, this Policy doesn’t strictly specify any such

minimum and maximum limit.

8.1.2 A FPO must be a member-owned registered body, administered professionally and

the organisation must be focused on activities in the agriculture and allied sectors

and its related activities.

8.1.3 The formation and development of FPOs will be actively encouraged and supported

by the State Government and its agencies, using financial resources from various

Central and State-funded schemes. This goal will be achieved by creating a coalition

of partners by the concerned promoter body, involving civil society institutions,

research organisations, consultants, private sector players and any other entity

which can contribute to the development of strong and viable producer-owned

FPOs.

8.2 Schemes for FPOs

8.2.1 The primary objective of mobilising farmers into member-owned Producer

Organisations (FPOs) is to enhance production, productivity and profitability of

agriculturists, especially small & marginal farmers in the State. The participant

farmers will be given the necessary support to identify the primary producers

through base line survey, arrive at a common plan and intent to come together,

identify the activities appropriate and relevant to their context, register themselves

under the Cooperative Societies Act, 1962 or as a Producer Company under

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Section 581(C) of the Indian Companies Act, 1956, as amended in 2013, prepare

business plan, establish office and undertake the activities indicated in their

Memorandum of Association (MoA) and Articles of Association (AoA).

8.2.2 The Government will take proactive steps to mobilise farmers into Producers Groups

starting with smaller groups at the village level which will be known as Farmer

Interest Groups (FIGs). The Farmers Clubs promoted by NABARD, Producers

Groups promoted under the Odisha Livelihood Mission & Directorate of Horticulture

will also be eligible for financial and capacity building assistance for limited purpose

of implementation of product-specific cluster/ commercial crop cycles provided they

are recognised by the respective Departments and Agencies implementing the

special schemes and programmes.

8.2.3 For ensuring access to and usage of quality inputs and services for intensive

agriculture production and enhancing competitiveness, alternative choices to

farmers in the form of FPOs will be encouraged and FPOs will be provided all

facilities by the Government.

8.2.4 For facilitating access to fair and remunerative markets including linking of producer

groups to marketing opportunities through market aggregators, storage, processing

and distribution, FPOs will be given priority and will be treated at par with

cooperatives and corporations.

The Process Guideline to form an FPO will be as follows:-—

8.3 Enabling Ecosystem for FPOs:

8.3.1 The Government of Odisha recognises FPOs at par with cooperatives/self-help

groups/ federations/ Corporations for all benefits and facilities that are extended to

member-owned institutions from time to time.Also, benefits which are applicable to

individual farmers would be applicable to FPOs in the same category.

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8.3.2 The State Government will support FPOs by making provisions for easy issue of

licenses to FPOs to trade in inputs like seed, fertilizer, farm machinery, pesticides

etc. for use of their members as well as routing the supply of agricultural inputs

through FPOs at par with cooperatives.

8.3.3 The Single Window Clearance System by Department of Agriculture & Farmers’

empowerment shall be made applicable to FPOs for issue of licenses for trade in

inputs, production, processing, distribution of seeds and saplings.

8.3.4 Land will be made available to FPOs at a concessional rate or free for establishment

of exclusive storage, sorting, grading yards and processing plants, as per prevailing

norms.

8.3.5 The FPOs will be supported by using them as producers of certified seeds, saplings

and other planting materials and production and marketing subsidies will be

extended at par with cooperatives and corporations.

8.3.6 The FPOs will be allowed for direct sale of farm produce at the farm gate through

FPO owned procurement and marketing centres.

8.3.7 The financial nearness to farmers will be assured by linking FPOs to financial

institutions like Cooperative Banks, Regional Rural Banks, Commercial Banks and

other Financial Institutions etc., for developing working capital, storage and

processing infrastructure and other investments.

8.3.8 Academic Interventions: In order to build a culture of professionalism in the FPOs,

the Government shall advise the OUAT and other such Universities to introduce

courses on FPOs education in their syllabus of Rural Management or Agri- Business

Management.

8.3.9 The Government will encourage students to pursue approved courses on FPOs and

their fees to the extent of Rs.10000/- per year will be reimbursed by the

Government.

8.3.10 Training Programme of CEOs: Bankers Institute of Rural Development, an

autonomous institute promoted by NABARD, has developed training module of 03

months for the CEOs of FPOs. The Government will encourage institutions including

Private Universities to provide training on such modules and the course fee to the

extent of the 50% will be reimbursed on satisfactory completion of the course.

8.3.11 Training of Farmers: Exposure visits would be provided to men and women from

project villages/farm practising modern farming techniques. Fund creation to provide

training, capacity building and technology adoption by the FPOs in order to ensure

scaling up and sustainability will also be done. Steps will be taken to train members

and leaders of FPOs to nurture FIGs and mediate vis-à-vis external resource

institutions.

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8.4

Services to be rendered by the FPOs:

FPOs will provide end-to end services to its members, covering all aspects of

cultivation i.e., financial, input supply, technology transfer, procurement and packaging,

marketing, insurance and networking services. Based on the emerging needs, the FPOs

can add new services with approval of the Government to ensure best interest of the

farmer.

8.4.1 Role of Board of Directors: The Board will deal with key decisions like determination

of dividend to be paid to members, appointment of CEO, formulate organizational

policies, ensuring maintenance of books and responsibilities conferred in MoA

(Memorandum of Association). The Board will be selected in Annual General Body

meeting.

8.4.2 Role of CEO: He/She will be appointed by the Board. CEO is responsible for doing

administrative work for the organization, assisting Board in planning and execution,

and furnish the members with periodic information to appraise them of the operation

and functions of the Company.

FPO service model may be graphically described as follows:—

Appointm

STRUCTURE OF FPO

Farmer Producer

Organisations (FPO)

General Body

Executive Body

(2 Representatives per

FIG)

Board of Directors

Chief Executive Officer

FPO Staff

Local Resource Persons

STRUCTURE OF FPO

1. Input Supply

2. Financial

3. Technical

4. Insurance

5. Procurement

6. Packaging

7. Marketing

8. Networking

1. Planning

2. Implementation

3. Monitoring

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8.5. Appointment of Nodal Agency:

8.5.1. The National Policy on FPOs suggests that the Government can appoint a Resource

Institution for the promotion of FPOs. Accordingly Director of Horticulture will be the

coordinating RI for the State of Odisha. Concerned line Directorates will be the RI

for the FPOs in their relevant fields.

8.5.2. Each relevant line department (For Ex. Agriculture, Horticulture, Fisheries, Animal

Husbandry etc.) will have their own RI & PMU at Directorate level. These RIs will be

responsible for setting up PMUs in the Directorate, identification of Producer

Organisation Promoting Institutions (POPIs), identification of potential of each GP,

Diagnostic Study in selected area, Feasibility Study, Baseline Assessment,

development of Business and Development Plan of each FPO. The convening RI

would eventually evolve into Special Purpose Vehicle (SPV), a Private Limited

Company under the Companies Act, 2013, which will ensure implementation of

aforementioned vision in the policy.

8.5.3. An NGO, a bank branch, a Government Department, a Cooperative Society or any

Association or Federation can become a POPI. The principal role of the POPI is,

therefore, to build the capabilities of the FPO through mobilization, training and

continuous hand-holding. All these POPIs would receive active support from the

Govt. of Odisha.

8.5.4. All RIs would be expected to submit trequired reports when required.

8.5.5. Separate Operational Guidelines for promotion, registration, financial & institutional

support & monitoring of FPO will be issued in consonance with the FPO policy.

8.6.

Financial Support by Government of Odisha:

8.6.1 Corpus Fund: A FPO Fund with an initial corpus of Rs. 100.00 Crore per year shall

be setup with Department of Agriculture & Farmers’ Empowerment to support FPOs,

RIs, POPIs and PMU in all sectors. The maximum timeline for promotion of FPO will

be 7years. This support will supplement funds that may be received under

Operations Green, NRLM, PRODUCE (Producer Organization Development and

Upliftment Corpus) fund of NABARD, or any other fund. The norms for utilization,

which will be based on the prevailing practices for FPOs, will be detailed in the

Operational Guidelines.

8.6.2 Subsidy Support: FPOs will be eligible for all the existing investment promotion

subsidies of the Government of Odisha as may be applicable. Details of the subsidy

would be mentioned in the Operational Guidelines.

8.6.3 Exemption from Stamp Duty and Concessional Registration Charges:

Exemptions from Stamp duty and Concessions on Registration Charges would be

provided to FPOs, details of the these exemptions would be provided in Operational

Guidelines.

8.6.4 Equity Grant and Credit Guarantee Funds: The successful FPOs will be eligible

for Equity Grant and Credit Guarantee Fund Schemes as may be available.

8.7

Institutional Support by Government of Odisha:

8.7.1 The Government of Odisha will establish an Information and Support Centre for

FPOs at the Directorate of Horticulture under Department of Agriculture & Farmers’

Empowerment in association with other Departments.