A farmer producer company (FPC) is a type of producer company in India formed by a group of farmers, mostly small and marginal farmers, to undertake common business activities with an objective of enhancing their income, improving market access, and processing, handling, and marketing of the agricultural/tribal produce.
Here’s how a farmer producer company works:
- Formation: A minimum of 10 farmers or two or more producer institutions can come together to form an FPC. They need to register their company with the Registrar of Companies (ROC) under the Companies Act, 2013.
- Governance: Each member of the FPC has one vote, irrespective of their shareholding. This ensures democratic decision-making and protects the interests of small farmers.
- Activities: FPCs can undertake a wide range of activities such as:
- Aggregation of produce: FPCs can collect the produce of their members and sell it in bulk to buyers, thereby fetching better prices.
- Processing and value addition: FPCs can process agricultural produce, such as converting milk into dairy products or fruits and vegetables into pickles or jams. This adds value to the produce and increases the income of farmers.
- Input supply: FPCs can bulk purchase inputs like seeds, fertilizers, and pesticides at discounted rates and provide them to their members. This reduces the cost of production for farmers.
- Marketing and branding: FPCs can create their own brand for their products and directly market them to consumers. This eliminates the role of middlemen and increases the share of profits going to farmers.
- Benefits: FPCs offer several benefits to farmers, including:
- Increased income: By undertaking activities such as aggregation, processing, and marketing, FPCs can help farmers get better prices for their produce.
- Improved market access: FPCs can help farmers connect with larger markets and buyers, which was previously difficult for individual farmers.
- Reduced costs: By bulk purchasing inputs, FPCs can help farmers reduce their production costs.
- Improved bargaining power: FPCs give farmers a collective voice, which helps them negotiate better prices for their produce and inputs.
- Access to credit: FPCs can help farmers access credit from banks and other financial institutions, which can be used for investments in their farms or businesses.
FPCs are playing an increasingly important role in improving the livelihoods of farmers in India. By working together, farmers can overcome the challenges they face and achieve greater success.
Here are some additional facts about FPCs:
- As of March 2023, there are over 10,000 FPCs registered in India.
- The Indian government is providing financial and technical support to FPCs through various schemes.
- FPCs are seen as a key driver of agricultural growth and development in India.
