The scheme sets a minimum size for every FPO, and a larger size it aims for. This part explains the numbers, how members are brought together through small farmer groups, and who the guidelines ask FPOs to include. A calculator checks your numbers.
The short version
- Minimum: 300 farmer-members in the plains, 100 in the North-East and hilly areas.
- Target average: 500 in the plains, 200 in the North-East and hills.
- Members first form groups of 15 to 20 such as Farmer Interest Groups, SHGs or JLGs.
- For the equity grant, at least half the shareholders must be small, marginal or landless tenant farmers.
The Numbers
300 members in the plains and 100 in the North-East and hills are the minimum; 500 and 200 are the target averages.
| Plains | North-East and hilly areas | |
|---|---|---|
| Minimum farmer-members | 300 | 100 |
| Target average | 500 | 200 |
| Groups of 15 to 20 brought together | 20 or more | 7 to 8 |
A hilly area means land at 1,000 metres or more above mean sea level, and the hilly norm also applies to similar areas of Union Territories. The Department may revise the minimum with the approval of the Union Agriculture Minister, on the national committee's advice.
Source: Operational Guidelines 4.4, 4.5 and 14.1.2(vii)
Did you know?The guidelines allow the Department to revise the minimum membership based on experience, but only with the approval of the Union Agriculture Minister.
Building Up from Small Groups
Neighbouring farmers with the same interest form groups of 15 to 20, and these groups together form the FPO.
- Form small groups. Farmers living close together, with almost the same interest, form a group of 15 to 20: a Farmer Interest Group, Self Help Group, Farmers' Club, Joint Liability Group or Rythu Mitra group.
- Bring groups together. Twenty or more groups from a produce cluster, a village or neighbouring villages join to form one FPO; in the hills and the North-East, seven or eight groups.
- Register the FPO. The members become shareholders of the producer company or members of the cooperative.
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Who Should Be Included
Small and marginal farmers, women, SC and ST farmers and other weaker groups are to be included first.
The guidelines ask for special focus on small, marginal and women farmers, women's SHGs, SC and ST farmers and other economically weaker groups (4.4). The equity grant then sets firm conditions (11.3):
Membership conditions for the equity grant
- At least 50% of shareholders are small, marginal or landless tenant farmers, as defined in the Agriculture Census
- No single member holds more than 10% of the FPO's total equity
- At least one woman on the Board of Directors or governing body, with adequate representation of women
- Women farmers are preferred as shareholders
A farmer may be a member of more than one FPO with different produce, but receives the matching equity grant only once.
Why Size Matters
More members mean more business, more share capital and a larger equity grant, up to the ₹15 lakh cap.
In the period from six months to one year, the CBBO is judged on whether it has mobilised the minimum number of members (7.4). Size also decides the equity grant: at ₹2,000 per member, an FPO needs 750 contributing members to reach the ₹15 lakh cap.
₹15,00,000 ÷ ₹2,000 = 750 members. An FPO of 400 members can receive at most ₹8,00,000, even if members put in more capital.
Check yourself
Tap an answer to see whether you are right, and why.
An FPO in a hilly area at 1,200 m has 140 members. Is it eligible on size?
- No, it needs 300
- Yes, the minimum there is 100
- Only if it has 200
Areas at 1,000 m or more count as hilly, where the minimum is 100.
How large is a typical farmer group that joins an FPO?
- 5 to 7 farmers
- 15 to 20 farmers
- 100 farmers
Clause 4.4 describes groups of 15 to 20 members.
What share of shareholders must be small, marginal or landless for the equity grant?
- At least 25%
- At least 50%
- 100%
Clause 11.3(iv) requires at least half.
Remember these things
- 300 in the plains, 100 in the North-East and hills; aim for 500 and 200.
- Build the FPO from groups of 15 to 20 farmers.
- Include small, marginal, women, SC and ST farmers first.
- 750 members are needed to reach the ₹15 lakh equity cap.
Part 6 sets out the CBBO's duties and the milestones it must meet each year. For FPOs whose members are also certified under PGS-India, KrushiFlow submits farmer records to the PGS-India portal in bulk.