Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)
Funded in the 2026-27 Union Budget: Union Expenditure Budget 2026-27 (Feb 2026, Demand No. 1 (Department of Agriculture and Farmers Welfare), item 11 Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs), BE 2026-27 ₹500.00 crore; Notes item 11)
Support for farmer producer organizations formed under the scheme: a matching equity grant of up to ₹2,000 per farmer member (at most ₹15 lakh per FPO), a credit guarantee on bank loans up to ₹2 crore, and up to ₹18 lakh towards running costs.
- Lead benefit
- ₹2,000per farmer member, at most
- Components
- 3each read from the document
- Who can apply
- 1kinds of applicant
- Closing date
- Noneapply any time
What it pays
A grant matching the members’ own share money — up to ₹2,000 per farmer member, at most ₹15 lakh per FPO — paid to the FPO, which issues the same value of extra shares to its members.
What the document says, word for word
It is a matching grant: a member who has put in less than ₹2,000 gets only as much as their own share money. A farmer gets it only once even if a member of several FPOs (cl. 11.3(vi)). The FPO must issue the extra shares within 45 days (cl. 11.4(i)) and may draw the grant in tranches.
“11.1 … Equity Grant shall be in the form of matching grant upto Rs. 2,000 per farmer member of FPO subject to maximum limit of Rs. 15.00 lakh fixed per FPO. … 11.4 (ii) Individual Shareholder – up to Rs 2,000/- per member.”The bank’s loan to the FPO is guaranteed: 85% of a project loan up to ₹1 crore (at most ₹85 lakh), or 75% of a loan between ₹1 crore and ₹2 crore (at most ₹150 lakh), so the bank can lend without collateral.
What the document says, word for word
The bank pays a guarantee fee of up to 0.75% (loans up to ₹1 crore) or 0.85% (₹1–2 crore) to NABARD or NCDC (cl. 12.9). A bank can get cover for the same FPO at most twice in 5 years (cl. 12.8(ii)).
“12.8 (i) The credit guarantee cover per FPO will be limited to the project loan of Rs. 2 crore. In case of project loan up to Rs. 1 crore, credit guarantee cover will be 85% of bankable project loan with ceiling of Rs. 85 lakh; while in case of project loan above Rs.1 crore and up to Rs. 2 crore, credit guarantee cover will be 75% of bankable project loan with a maximum ceiling of Rs. 150 lakh.”Up to ₹18 lakh (or actual cost, if less) over three years from formation towards the FPO’s running costs; an FPO that could not use it in time may use it within five years.
What the document says, word for word
Only FPOs formed under this scheme get this support. The guidelines list what it covers: CEO/manager salary up to ₹25,000 a month, accountant up to ₹10,000 a month, one-time registration up to ₹40,000, office rent up to ₹48,000 a year, and more (cl. 10.1, p.19).
“FPO Management Cost (modified guideline for cl. 10.0): Under the scheme, financial support to Farmer Producer Organization (FPO) @ upto maximum of Rs. 18 Lakh / FPO or actual, whichever is lesser is to be provided during three years from the year of formation. However, if any of the FPO promoted under 10K FPO scheme was unable to avail/ utilize Rs 18 Lakh within the period of three years (due to initial corona restrictions or any other reason); then the respective FPO to utilize the same within the period of five years from its formation, subject to overall ceiling of assistance of Rs 18 Lakhs per FPOs.”How much can I claim?
This clause does not fund this applicant type (11.1; 11.4(i)–(ii)).
It is a matching grant: a member who has put in less than ₹2,000 gets only as much as their own share money. A farmer gets it only once even if a member of several FPOs (cl. 11.3(vi)). The FPO must issue the extra shares within 45 days (cl. 11.4(i)) and may draw the grant in tranches.
Who can apply
- FPO
Papers you need
- Shareholder list and each member’s share capital, certified by a Chartered Accountant or cooperative auditor (cl. 11.5(i))
- Board of Directors’ / Governing Body resolution to seek the equity grant (cl. 11.5(ii))
- Shareholders’ consent for the grant to be paid to the FPO’s bank account against additional shares (cl. 11.5(iii))
How to apply
- The FPO must be a registered producer company or cooperative; at least half its shareholders must be small, marginal or landless tenant farmers, and no member may hold more than 10% of the equity (cl. 11.3).
- For the equity grant, apply in the form at Annexure-I to the Implementing Agency, with the shareholder list certified by a CA or cooperative auditor, a board resolution and the shareholders’ consent (cl. 11.5).
- For the credit guarantee, your bank applies to NABARD or NCDC for cover on the FPO’s project loan (cl. 12.3, 12.9).
Applying is free. Never pay anyone to apply for you.
When to apply
The guidelines set no closing date.
Combining with other schemes
The documents do not say whether this can be combined with other schemes. Ask the implementing office before you count on both.