A Producer Organisation (PO) is a legal entity formed by primary producers,
viz. farmers, milk producers, fishermen, weavers, rural artisans, craftsmen. A
PO can be a producer company, a cooperative society or any other legal form
which provides for sharing of profits/benefits among the members. In some
forms like producer companies, institutions of primary producers can also
become member of PO
The main aim of PO is to ensure better income for the producers through an
organization of their own. Small producers do not have the volume individually
(both inputs and produce) to get the benefit of economies of scale. Besides,
in agricultural marketing, there is a long chain of intermediaries who very
often work non-transparently leading to the situation where the producer
receives only a small part of the value that the ultimate consumer pays.
Through aggregation, the primary producers can avail the benefit of economies
of scale. They will also have better bargaining power vis-à-vis the bulk
buyers of produce and bulk suppliers of inputs.
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It is one type of PO where the members are farmers. Small Farmers’
Agribusiness Consortium (SFAC) is providing support for promotion of FPOs. PO
is a generic name for an organization of producers of any produce, e.g.,
agricultural, non-farm products, artisan products, etc
. It is formed by a group of producers for either farm or non-farm activities.
. It is a registered body and a legal entity. . Producers are shareholders in
the organization. It deals with business activities related to the
primary produce/product. It works for the benefit of the member
producers. . A part of the profit is shared amongst the producers. . Rest of
the surplus is added to its owned funds for business expansion.
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The ownership of the PO is with its members. It is an organization of the
producers, by the producers and for the producers. One or more institutions
and/or individuals may have promoted the PO by way of assisting in
mobilization, registration, business planning and operations. However,
ownership control is always with members and management is through the
representatives of the members
Any individual or institution can promote a PO. Individual persons or institutions may promote PO using their own resources out of goodwill or with the noble objective of socioeconomic development of producers. If, however, the facilitating agency wishes to seek financial and other support, then they have to meet the requirements of the donor/financing agency
NABARD, SFAC, Government Departments, Corporates and Domestic & International Aid Agencies provide financial and/or technical support to the Producer Organisation Promoting Institution (POPI) for promotion and hand-holding of the PO. Each agency has its own criteria for selecting the project/promoting institution to support
Producer Organisation can be registered under any of the following legal provisions:
a. Cooperative Societies Act/ Autonomous or Mutually Aided Cooperative Societies Act of the respective State
b. Multi-State Cooperative Society Act, 2002
c. Producer Company under Section 581(C) of Indian Companies Act, 1956, as amended in 2013
d. Section 25 Company of Indian Companies Act, 1956, as amended as Section 8 in 2013
e. Societies registered under Society Registration Act, 1860
f. Public Trusts registered under Indian Trusts Act, 1882
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