Farmer Producer Company: Overview
A Producer Company (PC) is a body corporate incorporated under the Companies Act, 2013 with the objective of production, harvesting, procurement, grading, pooling, handling, marketing, selling, or exporting primary produce of each member or importing goods or services for their advantage. Primary produce includes produce of agriculture, horticulture, animal husbandry, fisheries, dairy, beekeeping, or any other primary produce that is specified by the central government.
Producer Company are formed by a minimum of 10 individuals or two or more institutions, with at least 5 directors. The members of a PC have limited liability, and the liability of the company is limited to the extent of its assets. The PC is managed by the board of directors, which is elected by the members of the company.
What is Farmer Producer Organisation?
A Farmer Producer Organisation (FPO) in India is a business entity formed by farmers to collectively undertake production, processing, marketing, and other activities related to agriculture. FPOs can be registered under the Companies Act, 2013, or the Cooperative Societies Act, 1912.
FPOs are formed on the principles of self-help, self-reliance, and democracy. They are governed by a board of directors elected by the members of the FPO.
What is the role of farmer producer organisation(FPO)?
- Access to better quality inputs and services:Farmer Producer Organisations can bulk-procure inputs such as seeds, fertilizers, and pesticides at competitive prices, and they can also provide their members with access to better quality services such as credit, insurance, and technical assistance.
- Capacity Building:Farmer Producer Organisation offer training and capacity-building programs to enhance the skills and knowledge of their members. This includes training in modern farming practices, sustainable agriculture, and post-harvest management.
- Infrastructure Development:Farmer Producer Organisation invest in infrastructure development, such as cold storage facilities, warehouses, and transportation networks, to reduce post-harvest losses and improve the efficiency of the supply chain.
- Collective Bargaining:Farmer Producer Organisation enable small and marginal farmers to negotiate better prices for their agricultural produce by collectively selling their products. This reduces their dependence on middlemen and ensures fair compensation for their efforts.
- Increase Income: Farmer Producer Organisation can help farmers to increase their incomes through better market access and value addition. FPOs can aggregate their members' produce and sell it to bulk buyers, and they can also process their members' produce to add value and increase its shelf life.
Types of Farmer Producer Company
- Input Supply Farmer Producer Company:
These farmer Producer Company are involved in the bulk procurement and distribution of agricultural inputs such as seeds, fertilizers, and pesticides to their members. This helps farmers to save money on their inputs and improve their profitability.
- Marketing Farmer Producer Company:
These farmer Producer Company are involved in the aggregation and marketing of their members' produce. This helps farmers to get better prices for their produce and reduce their dependence on middlemen.
- Processing Farmer Producer Company:
These farmer Producer Company are involved in the processing of their members' produce to add value and increase its shelf life. For example, an FPC of tomato farmers can set up a tomato processing plant to produce tomato puree, ketchup, and other tomato products. This helps farmers to increase their incomes and reduce their losses due to spoilage.
- Service Farmer Producer Company:
These farmer Producer Company provide a variety of services to their members, such as credit, insurance, and technical assistance. This helps farmers to improve their productivity and incomes.
- Infrastructure Business:
Businesses that provide producers with infrastructure, such as energy, water resources, irrigation methods, land utilization, or consultation over the same.
Document Required for Farmer Producer Company
Farmer Producer Organisation Registration Process
Registering a Farmer Producer Organization (FPO) in India involves several steps and requires compliance with the relevant laws and regulations. FPOs are collective entities formed by farmers to improve their bargaining power, access resources, and enhance agricultural productivity. Here's a general overview of the registration process for an FPO:
- Apply for Digital Signature Certificate (DSC):
All directors of the FPO must apply for a DSC, which is a digital signature that is used to authenticate electronic documents.
- Apply for Name Approval:
Once the directors have obtained their DSCs, they can apply for name approval of the FPO.
- File SPICe Form (INC-32):
Once the name of the FPO has been approved, the directors must file SPICe Form (INC-32) with the MCA. This form contains all the necessary information about the FPO, such as its name, address, objects, directors, and members.
- File e-MoA (INC-33) and e-AoA (INC-34):
The directors must also file the Memorandum of Association (e-MoA) and Articles of Association (e-AoA) of the FPO with the MCA. These documents contain the fundamental constitution of the FPO.
Advantage of Farmer Producer Organisation
- Limited Liability
Any company runs the chance of being unable to cover its debts. It is an unavoidable evil. In such a scenario, a solo proprietor (or individual producer) would be held individually responsible for all firm obligations. On the other hand, because a production corporation is an independent legal entity, its members are subject to limitless responsibility. As a result, only the money invested in the firm would be lost; the directors' personal property would be secure.
- Economies of Scale
Only 15% of Indian farmers are landowners with more than two acres. Because of this, most farmers are unable to profitably take advantage of economies of scale. With the help of a farmer producer company, a group of farmers may work together to save expenses, lessen risk, and potentially get access to better loan options. This allows for improved planning and negotiating leverage.
- batter Management
Work inside a producer company might be distributed among its directors rather than being overseen by a single farmer. The Board of Management, which has a five-year term, is responsible for overseeing the organization. Additionally, because a Producer firm has a distinct legal existence, it is unaffected if one of its members passes away.
FAQS
Once the company is registered, it must fulfill a number of responsibilities. These include things like filing taxes, generating yearly reports, maintaining accurate accounting records, and complying to both employment and safety requirements.
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