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Vegetable Initiative for Urban Clusters & Farmers’ Producer Organizations

National Horticulture Conference 17th July 2013. Vegetable Initiative for Urban Clusters & Farmers’ Producer Organizations. By Jyoti Singhal Under Secretary (NHM ). VIUC – Major Objectives. VIUC – Major Components. VIUC – Physical Targets & Achievements. FPO PROMOTION.

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Vegetable Initiative for Urban Clusters & Farmers’ Producer Organizations

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  1. National Horticulture Conference 17th July 2013 Vegetable Initiative for Urban Clusters&Farmers’ Producer Organizations By Jyoti SinghalUnder Secretary (NHM)

  2. VIUC – Major Objectives

  3. VIUC – Major Components

  4. VIUC – Physical Targets & Achievements

  5. FPO PROMOTION

  6. PROGRESS (2011-2013) • 1,43,657 farmers connected to FPO network • Over 104 FPOs mobilized • 61 FPOs registered • 43 to be registered soon. • FPOs supported in capacity building, training, business development, value added services and marketing • Working towards creation of IT based marketing framework • 8 State level FPO federations promoted

  7. FPO Progress 1 FIG = 15 to 20 farmers; 1 FPO = 1000 farmers

  8. Budget announcement • “Farmer Producer Organisation (FPO) including Farmer Producer companies (FPC), have emerged as aggregators of farm produce to link farmers directly to markets. To signal our support to them, I intend to provide matching equity grants to registered FPOs upto a maximum of Rs. 10 lakh per FPO to enable them to leverage working capital from financial institutions. I propose to provide Rs. 50 crore for this purpose. Besides, a Credit Guarantee Fund will also be created in the Small Farmers’ Agri Business Corporation with an initial corpus of Rs. 100 crore. I urge State Governments to support such FPOs through necessary amendments to the APMC Act and in other ways”.

  9. Assistance through Fund and Scheme • The scheme proposes setting up of two funds, Equity Grant Fund and Credit Guarantee Fund • Major Objectives : • Enhancing viability and sustainability of FPOs by increasing their equity base • Increasing credit worthiness of FPOs • Incentivizing financial institutions to extend working capital and investment loans to FPOs to increase their business operations.

  10. Equity Grant Fund • FPOs can apply to receive a one-time matching grant up to a maximum of Rs. 10 lakh to issue additional shares to members, thus increasing their equity base.

  11. Credit Guarantee Fund • Broad principles to be adopted from a similar fund created for SMEs , which is operated by a Trust set up by SIDBI. The CGF will offer loan guarantee cover to eligible FIs which advance loans to Rs. 1 crore to FPOs without seeking collateral.

  12. Challenges ahead…… • APMC laws not encourage aggregators leading to opaque market arrangements. • Need to strengthen linkages of FPOs with State extension machinery • Access and operational understanding of best practices for PHM components with market links • Unfriendly banks to get credit / finance for procuring PHM infrastructure • Meager exposure to managing modern production technology needing more agri-extension • Need for developing market linked aggregation base • No ready access to efficient quality management and marketing, pan-India logistics

  13. Thank You

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