The Cluster Based Business Organisation (CBBO) is the FPO's guide for five years. The guidelines list its duties, and the milestones its implementing agency checks before releasing payment. This part sets them out year by year, so that both the CBBO and the FPO board know what to expect.
The short version
- The CBBO forms the FPO and supports it for five years from the year of formation.
- It is paid in stages, after the implementing agency checks its milestones and the last utilisation certificate.
- Year 2 milestones: first equity grant, business clearances, half the business plan running, e-NAM registration.
- Year 5 milestones: audited accounts, the full business plan done, three years of growth and a completion report.
What the CBBO Does
Mobilise, register, train, build the business, arrange money, keep records, and help the FPO grow.
Mobilise
Help choose the cluster, run the baseline survey and value chain study, and form farmer groups.
Register and train
Register the FPO, train its directors, and raise members' share capital.
Build the business
Prepare and carry out the business plan: inputs, good practices, aggregation, quality, processing, packing and buyers.
Arrange money
Help the FPO get the equity grant and the credit guarantee, and keep proper accounts and returns.
Records and compliance
Traceability and compliance, MIS data, FPO rating, and progress reports to the NPMA.
Help it grow
Common infrastructure, federations of FPOs, and market and crop advice for farmers.
Source: Operational Guidelines 7.3
Milestones, Year by Year
The implementing agency judges the CBBO on a fixed set of results for each stage of the FPO's life.
| Stage | What the implementing agency checks |
|---|---|
| First 6 months | Baseline survey, its report, and aggregation work started |
| 6 to 12 months | FPOs formed (including in aspirational district blocks), members mobilised to the minimum, FPO registered, business plan written |
| Year 2 | First equity grant; statutory clearances for business; at least 50% of business plan activities running; awareness programmes and exposure visits; first credit guarantee, if any; training for the CEO and board; registration and trading on e-NAM or another electronic platform |
| Years 3 and 4 | Share certificates issued to each member (year 3); audited accounts for years 2 and 3 filed on time; agreements and vendor registration with buyers; trading on e-NAM or elsewhere; second equity grant and credit guarantee tranches, if any |
| Year 5 | Audited accounts filed; 100% of the business plan executed and value chain developed; revenue growth over three consecutive years; detailed project completion report |
The Addendum removed the year-five check on a third credit guarantee tranche.
Source: Operational Guidelines 7.4(c); Addendum item 10
How the CBBO Is Paid
Up to ₹25 lakh per FPO over five years, including taxes, released in stages after checks.
The implementing agency pays the CBBO after satisfying itself on performance against the milestones above, and only after receiving the utilisation certificate for the previous release (7.4). The total is up to ₹25 lakh per FPO, including applicable taxes, or the actual cost if lower, spread over five years from the year of formation (9.1, Addendum item 11).
If the CBBO's work is found unsatisfactory at any point, the implementing agency may stop the grant or withdraw its empanelment (Addendum item 9). Part 7 covers selection and payment in detail.
What a Board Can Ask of Its CBBO
The board should see the baseline, understand the business plan and know what support is due each year.
Questions a board can ask its CBBO
- Can we see the baseline survey and the business plan?
- Which milestones are due this year, and how are we doing?
- When will directors and the CEO attend training?
- Are our equity grant papers ready, and who verifies them?
- Is our FPO's data up to date on the national portal?
- Which buyers or platforms are we being linked to?
The guidelines also provide for an advisory body of stakeholders, including the state government, NGOs, KVKs and other institutions, to guide the CBBO's work (7.3).
Check yourself
Tap an answer to see whether you are right, and why.
What does the implementing agency check in the first six months?
- Audited accounts
- Baseline survey, report and aggregation work
- Share certificates
Clause 7.4(c)(i) sets these as the first-stage measures.
By which year should share certificates be issued to members?
- Year 1
- Year 3
- Year 5
Issuing share certificates is a year-three measure.
What is the most a CBBO can receive per FPO?
- ₹18 lakh
- ₹25 lakh including taxes
- ₹40 lakh
The Addendum caps it at ₹25 lakh per FPO, including applicable taxes.
Remember these things
- The CBBO mobilises, registers, trains, builds the business and keeps records.
- Each year has set milestones the IA checks.
- Payment is staged, up to ₹25 lakh per FPO including taxes.
- Boards should ask for the baseline, the plan and yearly progress.
Part 7 explains how CBBOs are selected and what the ₹25 lakh covers. For FPOs whose members are also certified under PGS-India, KrushiFlow submits farmer records to the PGS-India portal in bulk.