The guidelines say an FPO needs a professional manager to run its business, and point to India's dairy cooperatives as proof. This part explains who can be the CEO and the accountant, how their salaries are supported, and what the board is responsible for.
The short version
- Every FPO should have at least a CEO or manager and an accountant; more staff can be added as the business grows.
- CEO: a graduate or equivalent; local candidates with 10+2 and a diploma in agriculture or agri-business may be preferred.
- Accountant: 10+2 with Mathematics, or with Commerce or Accountancy.
- Salary support for three years: up to ₹25,000 a month for the CEO and ₹10,000 for the accountant, rising up to 5% a year.
Why a Professional Manager
Farmers' boards set direction; a professional manager runs the daily business and keeps the FPO viable.
The guidelines note that it is not practical for farmers themselves to run an FPO's business professionally from day to day. A manager or CEO is needed with one objective: to make the FPO an economically sustainable enterprise that benefits farmers.
A professional manager also helps the FPO's democratic governance. The guidelines give India's dairy cooperatives as the best example of what professional managers can achieve.
The number of staff depends on the FPO's area, the range of activities and the volume of business, but every FPO should have at least a CEO or manager and an accountant.
Source: Operational Guidelines 10.2
Who Can Be Appointed
The FPO's board appoints both; the CEO should be a graduate or equivalent, the accountant 10+2 with Mathematics, Commerce or Accountancy.
CEO or Manager
- Appointed by the FPO's executive body (its board)
- Graduate or equivalent (the Addendum widened this from agriculture, agri-business or BBA graduates)
- Local professionals with 10+2, preferably with a diploma in agriculture, agricultural marketing or agri-business, may be preferred
- Works full-time for one FPO only
Accountant
- Appointed by the FPO
- 10+2 with Mathematics as a compulsory subject
- Or 10+2 with Commerce or Accountancy
- Keeps the day-to-day accounts
If members of the FPO meet these qualifications, they may be preferred in the selection.
Source: Operational Guidelines 10.3 and 10.4; Addendum item 14
Salary Support
The scheme supports salaries for three years at up to ₹25,000 and ₹10,000 a month, with up to 5% a year increase.
| Year 1 (a month) | Year 2 (a month) | Year 3 (a month) | Three-year total | |
|---|---|---|---|---|
| CEO or Manager | ₹25,000 | ₹26,250 | ₹27,563 | ₹9,45,750 |
| Accountant | ₹10,000 | ₹10,500 | ₹11,025 | ₹3,78,300 |
These are the most the scheme supports, assuming a 5% increase each year. From the fourth year the FPO pays both salaries from its own resources. It may pay more than the supported amount from its own funds at any time, to attract and keep good staff.
Source: Operational Guidelines 10.1 and 10.4
The Board's Duty
The Board of Directors and the CBBO are responsible for making sure the CEO delivers.
The guidelines make it the duty of the Board of Directors and the CBBO to ensure that the CEO's services build the business for the FPO's sustainability. Good practice for a board:
Good practice for the board
- Give the CEO a written role and yearly targets linked to the business plan
- Ask for a short monthly report on business, members and accounts
- Check that the accountant keeps books up to date and ready for audit
- Send the CEO and directors to the training held twice a year
- Review the CEO's performance before the salary support ends in year three
For training, see Part 15.
Check yourself
Tap an answer to see whether you are right, and why.
What is the minimum qualification for an FPO accountant?
- Graduate in any subject
- 10+2 with Mathematics, or with Commerce or Accountancy
- Chartered Accountant
Clause 10.3 sets 10+2 with Mathematics, or a Commerce or Accountancy background.
Can one CEO manage two FPOs at the same time under the scheme?
- Yes
- No, one CEO serves one FPO at a time
- Only in the North-East
Clause 10.4 says one CEO provides full-time services to one FPO at a time.
Who is responsible for the quality of the CEO's work?
- The implementing agency alone
- The FPO's board and the CBBO
- The bank
Clause 10.4 places this duty on the Board of Directors and the CBBO.
Remember these things
- At least a CEO and an accountant in every FPO.
- CEO: graduate or equivalent; accountant: 10+2 with Mathematics, Commerce or Accountancy.
- Salary support for three years with up to 5% yearly increase.
- The board and the CBBO answer for the CEO's results.
Part 11 explains the equity grant: the government's matching contribution to members' share capital. For FPOs whose members are also certified under PGS-India, KrushiFlow submits farmer records to the PGS-India portal in bulk.