Govt may assist FPOs in accessing cheap loans at subsidized interest rates: Tomar
According to Union Agriculture Minister Narendra Singh Tomar, the government may assist Farmer Producer Organizations (FPOs) in gaining access to cheap loans at subsidized interest rates that are already accessible to farmers.
“I was told of a number of issues, including the lack of credit available to FPOs.” “The agricultural ministry will take these (stakeholder issues) further,” Tomar said Monday at an FPO event hosted by CII and NCDEX. “There is a need to grow FPOs since the number of small and marginal farmers in our nation is high,” he said, adding that due to relatively limited land size, neither small farmers nor anybody else is willing to invest.
Specific credit card for FPOs
Earlier in the event, Arun Raste, managing director of commodity exchange NCDEX, proposed that the government provide a specific credit card for FPOs similar to the Kisan Credit Card. He also wanted financing for FPOs at the same interest rates as farmers (on short-term agricultural loans), because they (FPOs) are now paying 12-18% interest.
Tomar stated that the government has worked hard to make funding available to farmers while also establishing a link between the market and their goods and eliminating intermediaries. He also emphasized the government’s crop diversification initiative, which aims to nudge farmers into cash-rich crops. The government has been attempting to connect farmers to cutting-edge technologies in order for them to achieve global criteria.
Potential to boost worldwide
NABARD‘s Chairman G R Chintala stated that the organization has developed close to 16,000 FPOs since 2010-11 and that the thought underlying this idea of producers’ group is what to make, how to produce, how much to produce, and at what rates it should be marketed. He also stated that many FPOs are now either input or output aggregators and are not doing enough for farmer welfare.
Chintala went on to say that in order to overcome the obstacle of decreased productivity, FPOs must use new technologies such as artificial intelligence (AI) and Blockchain to maximize collectivization benefits.
Speaking at the occasion, PK Swain, additional secretary in the Union Agriculture Ministry, stated that while the concepts of cooperatives, collectivization, and FPOs are all similar, there are differences in approach. He described how importers from various nations began to exhibit interest in FPOs for commerce. According to him, the FPO model has the potential to boost worldwide commerce of Indian geographical indication (GI) products at competitive costs.
The government started “Formation and Promotion of FPOs” in 2020, with the goal of creating 10,000 new FPOs by 2027-28. The initiative provides up to ₹33 lakh in handholding and financial support to each new FPO for a period of five years. A credit guarantee facility of up to ₹2 crore of project financing per FPO is also available.