A Farmer Producer Company (FPC) is a type of organization formed by farmers in India with the aim of improving their income, ensuring better returns for their produce, and promoting overall agricultural development. The concept of Farmer Producer Companies was introduced to empower farmers, enhance their bargaining power, and provide a platform for collective decision-making.
Here are some key features and characteristics of Farmer Producer Companies:
- Formation:
FPCs are formed by a group of farmers who come together voluntarily to form a collective entity.
The company can be registered under the Companies Act, and it functions as a corporate body.
- Objective:
The primary objective of a Farmer Producer Company is to improve the economic well-being of farmers by ensuring better prices for their agricultural produce.
- Collective Farming:
FPCs encourage the concept of collective farming, where farmers pool their resources, knowledge, and skills to collectively undertake farming activities.
- Ownership and Control:
The ownership of the FPC is with the farmers who are also the shareholders of the company.
The control and management of the company are in the hands of the farmer-members, ensuring a democratic decision-making process.
- Business Activities:
FPCs engage in various agricultural and related activities such as production, harvesting, processing, and marketing of agricultural produce.
They may also undertake activities like value addition, quality control, and export promotion.
- Financial Support:
FPCs can receive financial support and assistance from government agencies, financial institutions, and other development organizations to strengthen their operations.
- Market Linkages:
FPCs help farmers in establishing direct market linkages, reducing the role of intermediaries, and ensuring that a higher share of the profits reaches the farmers.
- Risk Mitigation:
By working collectively, FPCs enable farmers to share risks and uncertainties associated with agriculture, leading to better risk mitigation strategies.
- Legal Structure:
FPCs are registered under the Companies Act, 2013, and they function as private limited companies.
- Tax Benefits:
FPCs enjoy certain tax benefits and concessions provided by the government to promote the development of agriculture and rural areas.
The formation of Farmer Producer Companies is seen as a positive step towards empowering farmers, improving agricultural productivity, and ensuring sustainable development in the agricultural sector. It provides a platform for farmers to collectively address challenges, access resources, and enhance their livelihoods.