A farmer-producer organisation is called an FPO. Unlike other companies, Farmer Producer Company is entirely composed of farmers. Through Farmers Producers Organisations, a variety of services are provided, such as technical assistance, marketing, processing, as well as other aspects of crop inputs.
Incorporated as a Limited in 2013 for the purpose of producing, harvesting, procuring, grading, pooling, handling, marketing, and selling primary export products or import products and services for their benefit. As far as agriculture is concerned, produce can be defined as anything that has been raised or harvested.
Aims – Farmer Producer Company
- In creating their organization, the Farmer Producer Company aims to provide farmers with a better income. The volume (inputs and output) necessary for small farmers to benefit from large-scale agriculture is lacking. The producers/farmers get a tiny portion of the value of the final product due to a lengthy chain of middlemen in agricultural marketing.
- Farmers are the primary consumers and producers of inputs, so they have a stronger bargaining position in Farmer Producer Companies. A Producer Company, on the other hand, deals primarily with agriculture and post-harvest processing. Farmer Producer Companies have been developed to formalize and regulate agribusiness operations, including farmers and agriculturists (called producers).
- Those who wish to join Producer Company must either qualify as producers, producers institutions, or a combination of the two. In order to qualify as a producer, an individual or company can engage in any activity that is directly or indirectly related to the production of any primary produce.
- In this class of products, Primary Products are all by-products and products that originate from supplementary activities, such as those produced by farmers in agriculture or by individuals who work in handloom, handicraft, or other cottage industries.
- It should be understood that, in this context, the term “Producer Institution” refers to a corporation or any other organization that accepts the assistance of the Producer Company and Producer Businesses by virtue of its articles of incorporation, and that contains only producers or producers, or otherwise, the Farmer Producer Company and the Producer Business.
What are the benefits of FPC?
- Members are only responsible for the number of unpaid shares they own based on the number of unpaid shares they own. Thus, as a result, the wealth of the company’s members cannot be used to offset the losses of the company.
- It would be fair to say that it’s sort of like a cross between a business corporation and a cooperative society, with all the advantages of both professional administration and the benefits of both shared gains.
- As far as company management is concerned, the Companies Act 2013 is relatively more relaxed than that of Cooperative Societies in relation to the registration of producer companies.
- There is the possibility of expanding the number of people if necessary and feasible. Members of the association do not have a limit as to how many there can be.
- In addition to all tax and other discounts, licenses, advantages, rights, and exemptions available to inter-state cross-organizations, the Producer Company must be entitled to these benefits too.
- The organization’s membership is open to individuals as well as organizations that are active in the field of publishing (corporations and unincorporated institutions).
- In the case of producer companies with revenues below Rs. 100 crore a year, farming-related earnings won’t be taxed.
- It is the Board of Directors of the Producer Company that has the authority to hire and designate specialists to handle the company’s day-to-day operations with the help of the company’s general manager.
In addition to the financial institutions, including banks, and government and non-government organizations that provide technical, managerial, and financial support to the Farmer Producer Company, the company is favored by many financial institutions, including banks. Companies that operate in the producer sector can operate from anywhere in the country, allowing them to grow their products and services in a professional and free manner.
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