Under Companies ACT 2013, the formation of Producers' Company has bee provisioned. It is also knows as Farmers Producers Organisations for agri related producers.

1. Farmers Producers
Organization (FPO):
Making them successful
Amrita Dhiman

2. Cooperatives
 Cooperatives are people-centered enterprises
owned, controlled and run by and for their members to
realise their common economic, social and cultural
needs and aspirations.
 Driven by values, not just by profit

3. Cooperative principles
 Open and voluntary membership
 Democratic member control
 Members’ Economic Participation
 Autonomy and Independence
 Education, Training and Information
 Cooperation among cooperatives
 Concern for community

4. Reasons for failure
 Non-accountability
 Vested interest of some people
 Lack of coordination
 Lack of democratic control
 Lack of cooperation on the part of the people
 Defective management
 Regional disparities
 Political interference
 Non-viable character
 Problem of overdues

5. Producer company
 Producer Company is a company registered under the
Companies Act, 2013, which has the objective of
production, harvesting, procurement, grading, pooling,
handling, marketing, selling and export of primary
produce of the Members or import of goods or services
for their benefit.
 The concept of Producer Companies was introduced in
2002 by incorporating a new Part IXA (section 581A to
581ZT) into the Companies Act,1956 (“the Act”) based
on the recommendations of an expert committee led by
an economist, Y. K. Alagh.

6. What are the essential features of a PO?
 It is formed by a group of producers for either farm or non-
farm activities.
 It is a registered body and a legal entity.
 Producers are shareholders in the organization.
 It deals with business activities related to the primary
produce/product.
 It works for the benefit of the member producers.
 A part of the profit is shared amongst the producers.
 Rest of the surplus is added to its owned funds for business
expansion.

7. Objects of Producer Company, Sec 465(1)
The objects of the Producer Company shall relate to all or any
of the following matters, namely: -
a. Production, harvesting, procurement, grading, pooling,
handling, marketing, selling, export of primary produce of
the Members or import of goods or services for their
benefit. Provided that the Producer Company may carry on
any of the activities specified in this clause either by itself or
through other institution;
b. Processing including preserving, drying, distilling, brewing,
vinting, canning and packaging of produce of its Members

8. Contd…
c. Manufacture, sale or supply of machinery, equipment or
consumables mainly to its Members;
d. Providing education on the mutual assistance principles to
its Members and others;
e. Rendering technical services, consultancy services,
training, research and development and all other activities
for the promotion of the interests of its Members;
f. Generation, transmission and distribution of power,
revitalization of land and water resources, their use,
conservation and communications relatable to primary
produce ;

9. Contd…
g. Insurance of producers or their primary produce;
h. Promoting techniques of mutuality and mutual assistance;
i. welfare measures or facilities for the benefit of Members as may
be decided by the Board;
j. any other activity, ancillary or incidental to any of the activities
referred to in clauses (a) to (i) or other activities which may
promote the principles of mutuality and mutual assistance
amongst the Members in any other manner;
k. financing of procurement, processing, marketing or other
activities specified in clauses (a) to (j) which include extending of
credit facilities or any other financial services to its Members.

10. Incorporation
 A legal entity upon registration
 Any of the following combination of producers can
incorporate a producer company:
 Ten or more producers (individuals); or
 Two or more producer institutions; or
 Combination of the above two (10+2)

11. Registration
 In a Producer Company, only persons engaged in an activity
connected with, or related to, primary produce can participate in
the ownership. The members have necessarily to be primary
producers.
 These companies shall be termed as “Companies with Limited
Liability” and the liability of the members will be limited to the
amount, if any, unpaid on the shares.
 The name of the company shall end with the words "Producer
Company Limited”
 On registration, the producer company shall become as if it is a
private limited company for the purpose of application of law and
administration of the company (however it shall comply with the
specific provisions of part IXA).
 There is no limit on the maximum number of members in a
producer company.

12. Share Capital and Voting Rights
 The share capital of a Producer Company shall consist of equity
shares only.
 The shares held by a Member in a Producer Company, shall as far as
may be, be in proportion to the patronage of that company.
 Voting when membership is
 Only of individuals then voting rights shall be based on a single
vote for every member.
 Only of producer institutions then voting rights on the basis of
their participation in the business of the producer company.
 Combination of both individuals and producer institutions then
voting rights shall be based on a single vote for every member.

13. Two most important documents of the
company
 MOA – Memorandum of Association
 AOA – Articles of Association

14. Management
 Every producer company is to have at least 5 and not
more than 15 directors.
 A full time chief executive should be appointed by the
board and shall be entrusted with substantial powers of
management as the board may determine.

15. Audit & Internal Audit Requirements
 Producer Companies shall carry out an internal audit of its
accounts, at regular intervals in accordance with its articles
of association and such an audit shall be carried on by a
Chartered Accountant.
 The auditor shall make an annual audit report to the
members of the company on the accounts examined by him.
An unnecessary stipulation is that “without prejudice to the
concerned sections in the Act,” the auditors of producer
companies have to specially report on some additional items
such as debts due and bad debts, verification of cash
balances and securities, details of assets and liabilities,
loans extended to directors and details of donations and
subscriptions.

16. FPO Service Model
 Financial Services
 Input supply services
 Procurement and Packaging services
 Marketing services
 Insurance services
 Technical services
 Networking services

17. Benefits of Producer Company Registration
 Separate legal entity
 Uninterrupted existence
 Owning property
 Better credibility
 Acceptance of deposits
 Tax benefits
 Support from NABARD and SFAC
 Promotion of members interest like a for profit company

18. Thank you