Agri‑Business & FPO
Work & Livelihood – Government Schemes & Support
Objective – Equip you with a concise, practical understanding of the major government schemes that help farmers, agribusinesses, and Farmer‑Producer Organizations (FPOs) to increase productivity, access finance, and improve market linkages.
1. Simple Explanation
- Government schemes are special programmes launched by central or state governments to support agriculture, allied activities, and rural entrepreneurship.
- They provide financial assistance, subsidies, insurance, technology, and market linkage.
- FPOs (Farmer Producer Organizations) are collective bodies that help farmers pool resources, negotiate better prices, and access credit.
- Understanding the eligibility, application process, and benefits of each scheme is crucial for maximizing gains.
2. Key Schemes & Their Support
| Scheme | Administered By | What It Offers | Target Beneficiaries | Typical Application Channel |
|---|---|---|---|---|
| Pradhan Mantri Kisan Samman Nidhi (PM‑Kisan) | Ministry of Agriculture & Farmers Welfare (MoAF) | ₹60,000/yr (₹20,000 each in 3 installments) | Small & marginal farmers (≤ 5 ha) | Online portal, State Agriculture Mission |
| Pradhan Mantri Fasal Bima Yojana (PM‑FBY) | MoAF | Crop‑specific insurance, compensation up to 90 % of premium | All farmers, crop‑specific | State Insurance Departments, Agribusiness banks |
| Pradhan Mantri Krishi Sinchai Yojana (PM‑KSY) | Ministry of Jal Shakti | 50 % subsidy on irrigation projects | Rural households, small farmers | State irrigation offices |
| Pradhan Mantri Awas Yojana – Gramin (PM‑AYOG) | Ministry of Rural Development | Housing and land‑use improvements | Rural households | State Rural Development Mission |
| Pradhan Mantri Fasal Bima Yojana (PM‑FBY) | MoAF | Insurance & prompt payouts | All farmers | Insurance agents, banks |
| National Mission on Sustainable Agriculture (NMSA) | Ministry of Agriculture | Technical support, climate‑smart practices | All farmers | State Agriculture Departments |
| FSSAI Licensing (Food Safety & Standards Authority of India) | Ministry of Food Processing Industries | Food safety certification | Food processing units, FPOs | FSSAI portal |
| NABARD FPO Credit Scheme | National Bank for Agricultural and Rural Development | Dedicated credit line (₹1 Cr–₹10 Cr) | Established FPOs | NABARD regional offices |
| Pradhan Mantri MUDRA (PM‑MUDRA) | Ministry of Finance | Loans up to ₹10 Lac, no collateral | MSMEs including agribusinesses | State banks, NBFCs |
| Pradhan Mantri Shiksha Swasthya (PM‑SD) | Ministry of Health & Family Welfare | Health & education subsidies | Rural households | State health & education departments |
| Mahua Development Scheme | Ministry of Agriculture | Technical support & market linkages for Mahua cultivation | Small farmers in Madhya Pradesh & Chhattisgarh | State agriculture departments |
| Rural Infrastructure Development Scheme (RIDS) | Ministry of Rural Development | Rural road, water & energy projects | Rural communities | State Rural Development Mission |
Tip: Many schemes overlap; you can combine subsidies (e.g., PM‑Kisan + PM‑KSY) for a single farmer.
3. Worked Example – Forming an FPO and Accessing NABARD Credit
Scenario
- Village: Jaisalpur, UP (5 ha per farmer on average)
- Number of Farmers: 30
- Crop: Wheat & Maize
- Goal: Increase bargaining power, reduce input costs, and secure a 5‑year credit of ₹5 Cr for a modern grinding unit.
Step‑by‑Step Process
| Step | Action | Details | Remarks |
|---|---|---|---|
| 1. Form FPO | Register under the Companies Act 2013 or Cooperative Act | File Memorandum, Articles, and obtain registration from state FPO portal | FPO must have ≥ 20 members |
| 2. Conduct Feasibility Study | Prepare a business plan (market analysis, cost estimates, ROI) | Use local agricultural extension officer or NABARD consultant | Needed for credit application |
| 3. Apply for NABARD FPO Credit | Submit credit application with feasibility study | NABARD requires: • FPO registration certificate • Business plan • Proof of land ownership (for collateral) |
Credit limit: ₹5 Cr – ₹10 Cr |
| 4. Obtain Crop Insurance | Enroll FPO under PM‑FBY to cover the grinding unit’s output | PM‑FBY coverage up to 90 % of premium | Reduces risk, improves lender confidence |
| 5. Secure Subsidy for Irrigation | Apply for PM‑KSY if grinding unit needs irrigation | 50 % subsidy on irrigation infrastructure | Lowers operating costs |
| 6. Register for FSSAI | Obtain food safety certification for processed wheat products | 3‑month processing time | Required for market entry |
| 7. Apply for PM‑Kisan | Ensure all FPO members qualify for ₹60,000/yr each | Helps cover member welfare costs | N/A for credit but improves member retention |
| 8. Implementation | Build grinding unit, hire staff, start operations | Use NABARD loan for capital expenditures | Ensure timely repayments |
| 9. Market Linkage | Use state Agricultural Marketing Committee to find buyers | Provide quality samples to wholesalers | Generate revenue for loan repayment |
Result
- Credit obtained: ₹5 Cr at 9 % interest