Farmers who are actively engaged in agricultural production and who have an interest in participating in agribusiness operations can join together in a village or group of villages and submit an application for the formation of a Farmer Producer Company under the relevant Companies Act.
But before applying for the formation of an FPO, the applicant must go through the following guidelines and principles:
FPOs Guiding Values
FPOs are built on the principles of democracy, self-help, self-reliance, equality, equity, and solidarity. FPO members are expected to uphold the moral principles of transparency, honesty, social responsibility, and care for others.
FPOs Principles
FPOs will put their beliefs into action according to the FPO principles.
1st Principle: Voluntary and Open Membership
FPOs are voluntary organizations that are accessible to anybody who needs their services and is prepared to take on the responsibilities of membership, regardless of gender, socioeconomic status, race, political affiliation, or religion.
2nd Principle: Democratic Farmer Member Control
Farmers who are members of FPOs are actively involved in establishing their policies and making decisions, making their democratic organizations. Both men and women who hold elected positions are accountable to the membership as a whole. Farmers who are members of main FPOs have equal voting rights (one member, one vote), and FPOs at other levels are likewise structured democratically.
3rd Principle: Farmer-Member Economic Participation
Farmer members fairly contribute to and democratically manage the FPO's capital. Usually, the FPO owns at least a part of that capital as common property. As a membership requirement, farmer members often earn little to no reward on capital subscribed. Farmer members distribute surpluses for any or all of the following purposes: expanding their FPO, possibly by creating reserves, at least a portion of which would be indivisible; providing benefits to members proportionate to their FPO transactions; and helping with other activities approved by the members.
4th Principle: Autonomy and Independence
FPOs are independent, self-governing groups run by their farmer members. If they make agreements with other organizations, such as governments, or raise money from outside sources, they do so under conditions that guarantee democratic governance by their farmer members and maintain the autonomy of their FPO.
5th Principle: Education, Training, and Information
To help them successfully contribute to the growth of their FPOs, FPO operatives give education and training to their farmer members, elected representatives, managers, and staff. They educate the general public on the nature and advantages of FPOs, focusing in particular on young people and opinion leaders.
6th Principle: Co-operation among FPOs
The most efficient way for FPOs to serve their members and advance the FPO movement is to collaborate through local, national, regional, and international organizations.
7th Principle: Concern for the Community
Through member-approved policies, FPOs work for the sustainable development of their communities.
