Cooperation Minister Amit Shah emphasized the crucial role of farmer producer organizations (FPOs) in enhancing the contribution of agriculture and allied sectors to India's GDP. Speaking at a conclave, Shah underscored the potential for agriculture to become a profitable venture through the adoption of modern technology and marketing methods.
He called for a "hybrid model" wherein existing FPOs would collaborate with Primary Agricultural Credit Societies (PACS) to provide services to cooperative members, while PACS themselves would operate as FPOs. Shah stressed that strengthening agriculture and allied sectors through cooperatives would not only boost GDP but also create job opportunities.
Despite agriculture and allied sectors contributing about 17.5-18 percent to the country's GDP, Shah acknowledged that farmers face challenges compared to those in the services sector. To bridge this gap, he emphasized the need to embrace FPOs, which are organizations that provide support to small farmers, covering various aspects of cultivation from inputs and technical services to processing and marketing. The government has set a target to establish 10,000 FPOs by 2027-28 under the agriculture ministry's purview, with the cooperative ministry tasked with setting up 750 FPOs and an additional 1,100 recently.
Shah highlighted the importance of modern technologies and marketing tools in making farming profitable, particularly considering that 85 percent of farmers are small and marginal landholders with less than one hectare of land. He revealed that FPOs were first suggested by a committee in 2003 during the Atal Bihari Vajpayee government but were not prioritized. It was under the leadership of Prime Minister Narendra Modi that FPOs were promoted to further boost the agricultural and allied sectors.
The minister acknowledged the significant benefits that FPOs have provided to farmers but noted that their impact within the cooperative sector has been limited. He welcomed the recent decision to establish 1,100 FPOs through PACS and urged PACS to take advantage of FPOs to strengthen the cooperative sector. Shah emphasized that FPOs formed by PACS are better positioned to provide benefits to farmers compared to those established by individuals, companies, or partnerships. He identified PACS, FPOs, and Self-Help Groups as the three organizations that will drive agricultural growth and rural development in the future.
Shah urged the existing 11,770 FPOs to continue operating as FPOs while linking themselves with one or two PACS to work in a hybrid model. This approach, he said, would bring about significant improvements within PACS. He suggested that FPOs and PACS could enter into agreements to share information, marketing strategies, and profits. Shah called upon the National Cooperative Development Council and officials from the cooperation ministry to draft an agreement in this regard.
The minister also highlighted the various initiatives undertaken by the Modi government over the past nine years to boost farmers' income. He cited the significant increase in the agriculture sector's budget, which stood at Rs 1.15 lakh crore for 2023-24 compared to around Rs 22,000 crore in 2013-14. Shah also emphasized the considerable raise in minimum support prices (MSP) and the strengthening of procurement operations.
