Key Agencies Promoting Farmer Producer Organizations

Behind every thriving Farmer Producer Organization (FPO) in India, there is a network of dedicated institutions and government programmes quietly doing the heavy lifting – from registering the FPO and training its board members to unlocking credit and connecting farmers to markets. These are the Programme Implementing Agencies (PIAs), and without them, most FPOs would struggle to get off the ground. Understanding who these agencies are and what they do helps explain how India’s ambitious goal of building a grassroots farmer economy is actually being executed.

What are programme implementing agencies? 🔗

Programme Implementing Agencies are the institutional backbone of FPO development in India. They are organisations – government bodies, development banks, and cooperatives – mandated to promote, register, and provide long-term support to FPOs on the ground. Under the Central Sector Scheme for the Formation and Promotion of 10,000 FPOs, nine Implementing Agencies (IAs) were finalised to carry out the work, each engaging Cluster Based Business Organisations (CBBOs) to provide professional handholding support to every FPO for five years. These agencies are not just administrators – they are active partners in building farmer enterprises from scratch.

Small Farmers’ Agribusiness Consortium (SFAC) 🔗

The Small Farmers’ Agribusiness Consortium (SFAC) was established by the Ministry of Agriculture, Government of India, primarily to increase the income of small and marginal farmers through agribusiness development. It was given the specific mandate of supporting state governments in the formation of FPOs and serves as the Central Nodal Agency (CNA) for the 10,000 FPO scheme – meaning it channels central funds directly to all other Implementing Agencies.

SFAC’s role in FPO development 🔗

SFAC functions as a single-window support system for technical guidance, training, research, and market linkages. It acts as a bridge between FPOs and input suppliers, technology providers, extension and research agencies, and marketing and processing organisations in both the public and private sectors. The consortium also administers the Producer Organization Development Fund (PODF), which provides grant-based financial support to FPOs for setting up and strengthening their operations.

One of SFAC’s most significant financial tools is its Credit Guarantee Fund. This fund mitigates the credit risk of financial institutions lending to Farmer Producer Companies without collateral, making it easier for FPOs to access mainstream banking credit. So far, over ₹1,024 crore has been released to Implementing Agencies under the scheme, with SFAC coordinating fund disbursement across 34 states and union territories.

SFAC also maintains the National Project Management Agency (NPMA) – an integrated digital portal for data compilation, FPO monitoring, and information management. Under the scheme’s guidelines, priority is given to forming FPOs in aspirational districts, with at least one FPO targeted per block in those districts, ensuring that the most underserved regions are not left behind.

NABARD: The financial engine for FPOs 🔗

The National Bank for Agriculture and Rural Development (NABARD) is a cornerstone institution dedicated to fostering agricultural and rural development across India, and its role in FPO promotion is both wide and deep. Where SFAC focuses on organisational formation and coordination, NABARD primarily drives the financial and developmental architecture that helps FPOs become economically viable.

NABARD’s key support mechanisms 🔗

NABARD provides a multi-layered financial toolkit for FPOs. Its flagship instrument is the Producer Organisation Development Fund (PODF), which offers both loan-linked and grant-based assistance to promote FPOs across states – covering capacity building, market interventions, and equity capital contributions. Through the PODF-ID (Interest Differential) initiative, FPOs can access working capital and term loans at concessional rates, making it feasible for smaller farmer collectives to scale operations without being crushed by borrowing costs.

Beyond PODF, NABARD supports FPOs through seed funding for newly established organisations, the Farm Sector Promotion Fund (FSPF) for climate-resilient agriculture, and the Rural Infrastructure Development Fund (RIDF) which improves roads, irrigation, and market connectivity – all of which indirectly benefit FPO members. NABARD has also introduced a Credit Guarantee Scheme on a pilot basis to provide guarantee cover to its lending subsidiaries, with plans to extend it to other institutions once the pilot proves successful.

NABARD also trains FPO boards and their officers through its Bankers Institute of Rural Development (BIRD) in Lucknow, which serves as one of the lead training institutes under the 10,000 FPO scheme. SFAC and NABARD together promote training for board members and officers of FPOs so they can function effectively as business organisations.

Other key implementing agencies 🔗

While SFAC and NABARD are the most prominent, the FPO ecosystem is supported by several other important bodies. Nine implementing organisations – including the National Cooperative Development Corporation (NCDC), SFAC, and NABARD – are responsible for the creation and promotion of FPOs under the 10,000 FPO programme.

The National Agricultural Cooperative Marketing Federation of India (NAFED) plays a specialised role, forming FPOs that are directly forward-linked to market and agri-value chains. NAFED also provides market and value chain linkages to FPOs formed by other Implementing Agencies – it is, in effect, the market-facing arm of the FPO promotion architecture. The NCDC, operating under the Ministry of Cooperation, focuses on cooperative-sector FPOs, particularly those being built through Primary Agricultural Credit Societies (PACS). Additionally, the Indian Council of Agricultural Research (ICAR) provides technical support through its Krishi Vigyan Kendras (KVKs) located across the country, connecting FPOs to research-backed agronomic guidance.

Paramparagat Krishi Vikas Yojana (PKVY): Organic farming through clusters 🔗

Not all FPO-promoting schemes are designed the same way. The Paramparagat Krishi Vikas Yojana (PKVY), launched in 2015 under the National Mission for Sustainable Agriculture, takes a distinctly cluster-based approach targeted at organic farming. PKVY provides end-to-end support to organic farmers – from production to processing, certification, and marketing – and its primary focus is on forming organic clusters to help create integrated supply chains.

How PKVY supports FPOs 🔗

Under PKVY, states and union territories receive financial assistance of ₹31,500 per hectare for three years in organic clusters, out of which ₹15,000 per hectare is transferred directly to farmers through DBT for on-farm and off-farm organic inputs. An additional ₹4,500 per hectare goes toward marketing, packaging, branding, and value addition, while ₹3,000 per hectare covers certification and residue analysis. Farmers also receive ₹9,000 per hectare for training and capacity building.

The scheme promotes the Participatory Guarantee System (PGS-India) for domestic organic certification, allowing community-based verification that reduces costs for small producers. For export-oriented FPOs, it also facilitates third-party certification under the National Programme for Organic Production (NPOP). By February 2025, PKVY had brought around 15 lakh hectares under organic farming, formed over 52,000 clusters, and benefited approximately 25.30 lakh farmers – a clear signal of the scheme’s reach.

For FPOs focused on organic agriculture, PKVY is especially valuable because it creates both the production base and the market linkage in tandem. The Jaivik Kheti Portal, which had over 6.23 lakh farmers, 19,016 local groups, and 8,676 buyers registered by December 2024, gives organic FPOs a direct digital marketplace to reach consumers without depending on intermediaries.

Rashtriya Krishi Vikas Yojana (RKVY): Broad-based agricultural development 🔗

While PKVY is focused on organic farming, the Rashtriya Krishi Vikas Yojana (RKVY) takes a broader view. It is a flagship scheme for the holistic development of Indian agriculture, covering crop production, horticulture, livestock, fisheries, and rural infrastructure. RKVY has historically played an important role in FPO formation – an early pilot programme mobilised approximately 2.50 lakh farmers into 250 FPOs across the country under two RKVY sub-schemes, namely the National Vegetable Initiative for Urban Clusters and the Programme for Pulses Development for 60,000 Rain-fed Villages.

RKVY’s contribution to FPO promotion 🔗

RKVY adopts a project-based funding model, allowing FPOs and state governments to propose innovative agricultural projects that are then evaluated for grant support. This flexibility makes it particularly useful for FPOs pursuing non-conventional activities – whether in agro-processing, market infrastructure, or value addition. Under RKVY guidelines, FPOs can serve as implementing agencies for various agricultural development programmes, including the National Food Security Mission (NFSM) and Agricultural Technology Management Agency (ATMA) programmes – effectively integrating FPOs into the mainstream agricultural development machinery of the state.

PKVY itself now operates as a component of the Pradhan Mantri-RKVY (PM-RKVY) framework, illustrating how these schemes are not isolated but layered and interdependent. Together, RKVY and PKVY provide FPOs with complementary pathways – one for sustainable organic farming and the other for broad agricultural growth and infrastructure.

The 10,000 FPO scheme: Where all support converges 🔗

The most comprehensive expression of India’s FPO policy is the Central Sector Scheme for the Formation and Promotion of 10,000 FPOs, launched in 2020 with a total budget outlay of ₹6,865 crore up to 2027-28. This scheme pulls together SFAC, NABARD, NCDC, NAFED, and other agencies under one coordinated framework. Each FPO under the scheme receives financial assistance of up to ₹18 lakh for three years, a matching equity grant of up to ₹2,000 per farmer member (capped at ₹15 lakh per FPO), and a credit guarantee facility of up to ₹2 crore per FPO from eligible lending institutions.

Prime Minister Modi launched the 10,000th FPO in February 2025, marking the achievement of the scheme’s target. Today, approximately 30 lakh farmers across India are connected to FPOs, with around 40 percent of them being women – a result that reflects years of coordinated institutional effort by the agencies and schemes described above.

Why coordinated institutional support matters 🔗

An FPO is only as strong as the ecosystem around it. Without SFAC to form and register it, without NABARD to fund it, without NAFED to connect it to markets, and without schemes like PKVY and RKVY to channel resources into it, an FPO remains a paper organisation. The coordinated efforts of NABARD, SFAC, NAFED, and other stakeholders have transformed FPOs into key instruments of rural empowerment, enabling farmers to transition from mere producers to agri-entrepreneurs, while contributing to food security, employment, and sustainable rural development. The challenge now is ensuring that the quality of this support keeps pace with its scale.

What do you think? As India moves beyond the 10,000 FPO milestone, which aspect of institutional support – financial access, market linkages, or capacity building – do you think is most critical for helping FPOs become truly self-sustaining? And how can schemes like PKVY and RKVY be better aligned to meet the specific needs of different types of FPOs across diverse agro-climatic zones?

References

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