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India: Budget 2019: To help marginal cultivators government proposes 10,000 farmer producer organisations
2019-07-09
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The government plans to form 10,000 farmer producer organisations (FPOs) in the next five years. 

This is expected to help small and marginal cultivators team up to get lower rates for inputs and sell produce at higher rates. 

FPOs will ensure economies of scale, said finance minister Nirmala Sitharman. 

Indian farms are highly fragmented, making it difficult for farmers to adopt modern practices and technology. The small and marginal land holding area increased to 47.4% in 2015-16 from 38.9% in 2000-01, while that of large holdings decreased to 20% from 37.2% in the same period. 

“The budget proposal to set up 10,000 FPOs is a path-breaking step to ensure economies of scale for farmers,” said H K Bhanwala, chairman of National Bank For Agriculture And Rural Development (Nabard). 

“The existing FPOs are not able to grow as they cannot raise capital. The government could have allowed investment by venture capital for private equity funds in this sector,” said Vilas Shinde, chairman of India’s largest FPO, Sahyadri Farm. 

Read more here.

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