1.
Farmer Producer Company
(FPO)
Developed by
Mr. Manish Runthala

2.
What is Producer Company
• Producer Company is a legal entity formed by Primary producers i.e.
Farmers and registered under Companies act, 2013.
• Producer Company is a group of farmers based on the principle of
membership, common interest, formal structure, and developing
technical & economic activity that benefit the farmers.
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3.
Objectives of FPO
• Production, harvesting, processing, procurement, grading, pooling, handling,
marketing, selling & export of primary produce of members.
• Rendering technical service, consultancy service, training, education & research for
promotion of member’s interests.
• Generation, transmission & distribution of power, revitalization of land & water
resources, their use & conservation of primary produce.
• Promoting mutual assistance, welfare measures, financial service, insurance of
Primary producers & produce
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4.
Features of Producer Organization
• Formed by group of Producers for either Farm or Non-farm activities.
• A registered & legal entity.
• Producer are shareholders in the organization.
• It deals with business activities of Primary Produce.
• Minimum 10 members or 02-institutional members but no limit on maximum number.
• Directors of FPO ranges between 05 to 15
• Minimum paid-up capital of FPO is Rs. 1,00,000 (01-Lakhs).
• Authorized capital of FPC can be more than Rs. 5,00,000 (05-Lakhs).
• Members’ equity shares can not be traded but can be transferred.
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5.
Principles of Producer Company
• Voluntary & open membership
• Democratic management by Farmer members
• Training & education (on Market & technology)
• Farmer-member participation
• Autonomy & independence
• Concern for community
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6.
Who can Promote FPOs
• Small Farmers Agribusiness Consortium (SFAC)
• NABARD
• Rashtriya Krishi Vikas Yojana (RKVY)
• Department of Agriculture of State Govt.
• Domestic & international Aid agencies
• NGOs
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7.
Range of services provided by FPO
• Input supply & custom hiring of equipment
• Operation of CSC for Processing, Packaging, Storage etc.
• Financial services including insurance facility for Crops
• Seed production& MSP facilitation
• Joint marketing to Processors/Retailers & market linkages
• Technical services
• Processing services
• Networking services
• Transport facilitation
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8.
Activities of Producer Company
• Procurement of inputs
• Disseminating market information, technology and innovations
• Facilitating finance for inputs
• Aggregation and storage of produce
• Primary processing like drying, cleaning and grading
• Brand building, Packaging, Labeling and Standardization
• Quality control
• Marketing to institutional buyers
• Participation in commodity exchanges
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9.
Cluster
identification
Diagnostic study
Feasibility analysis
& mobilization of
farmers
Business planning
Resource
mobilization
Business
operations
FPC
Development
Approach
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10.
Chairman/Board of Directors
General Body
Executive Body (02-Lead farmers per FIG)
Farmers
Farmers Interest Group (FIG)
Farmers Farmers
Structure of FPO
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11.
Chief Executive Officer (CEO)
Marketing Manager
FPO Staff
Local Resource Person (LRP)
Organogram of FPO
Accountant
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12.
Legal forms of Producer Company
• Cooperative Societies Act/ Autonomous or Mutually Aided Cooperative Societies Act of the
respective State
• Multi-State Cooperative Society Act, 2002
• Producer Company under Section 581(C) of Indian Companies Act, 1956, as amended in 2013
• Section 25 Company of Indian Companies Act, 1956, as amended as Section 8 in 2013
• Societies registered under Society Registration Act, 1860
• Public Trusts registered under Indian Trusts Act, 1882
*Source: Small Farmers Agribusiness Consortium
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13.
Cluster
identification Diagnostic
study
Feasibility
analysis
Baseline
assessment
Business
planning
Mobilization
of farmers
Organizing &
formalizing
Resource
mobilization
Business
operations
Assessment &
Audit
Steps of FPO
Formation
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14.
Incorporation of Producer Company
• 10 or more Producers can form Producer Company.
• More than 500 Producers are ideal to form the Producer Company.
• 15-20 villages or 10-15 KM. can be part of the company.
• The liability of the Producers is limited to subscribed shares by them.
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15.
Legal formalities for formation of Company
• Personal PAN card for BOD members
• Obtain Digital signature of the at least 03-Nominated Directors
• Directors Account Number (DIN)
• Choose maximum 04-names for the Producer company in order of preference.
• Memorandum & Articles of Association
• Form No. INC-22 for registered office& Form No. DIR-12 directors appointment
• Power of Attorney in favour of a consultant to authorize him to make necessary changes in MoA
and AoA.
• Submit the documents to RoC for Incorporation of Producer Company.
• Obtain Certificate of Commencement in INC-2.
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16.
Legal compliances for Producer Company
• Three proposed names for Producer Company
• Authorized (05-lakh or above) & paid-up share capital (01-Lakh).
• Company’s registered office’s rent agreement on notary (Stamp) of Rs. 500
• Details of all directors & subscribers (E-mail id, Mobile No., Bank statement, PAN, Aadhar,
Subscribers name & no. of shares, Passport photo-2, educational qualification, duration of
residence on present address, KYC video etc.).
• Proof of being farmer (certificate from Agri officer, Tehsildar, SDM etc.)
• INC-9 & DIR-2
• Declaration under Producer Company Act sec. 581-B
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17.
Management & Directors
• No. of directors should be 05 to 15.
• At least 01-women directors should be in the Board.
• Directors should be appointed within 90-days of incorporation.
• Producer Company can also appoint two or three consultant or advisor (Specialist)
but they don’t have right to vote.
• A full time CEO can be appointed with substantial power of management.
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18.
Memorandum of Association
• MoA is a document that indicates what activities the company can undertake.
• MoA explains constitution & rights of Company.
• It guides shareholders of company, lenders, bankers, and third party to know the
mandate of the company.
• MoA comprises Name of company, Address, objectives, promoters, scope of work,
no. of shares & its value etc.
• It is to be signed by requisite no. of subscribers/Promoters
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19.
Article of Association (AoA)
• AoA is a document that specifies the rules for company’s operations.
• It defines the company's purpose and lays out how tasks are to be accomplished
within the organization.
• It includes the process for appointing Directors and how financial records are handled.
• AoA specifies Membership, voting rights, BoD, funding, Dividend distribution,
AGM, quorum for AGM, election of chairman & directors.
• It is to be signed by requisite no. of subscribers/Promoters.
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20.
Particulars Item of expenditure Amount (Rs.)
Application for name of PC Fees 500
Digital Signature Fees 2600
Stamp duty MoA & AoA 1500
Registration fees MoA, AoA, Form-01, Form-18, Form-32 17200
CA/CS fees Consultancy fees 10000
Stamps cancellation 300
Affidavit expenses Notary fees 500
Share transfer fees & processing 5000
Miscellaneous exp. 2000
Total 39600
Estimated cost for incorporation of a Producer Company
Source: SFAC-FPO Policy & Process guidelines
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21.
Chief Executive Officer (CEO)
• A full time CEO is appointed by Board of Directors.
• CEO is accountable to Board of directors & members.
• CEO manages day to day affairs of the company & fulfills administration duties
including Board meeting, filling RoC, appointments, AGM, business plan execution etc.
• CEO undertake the duties, authorized by board, comprises operating bank accounts,
company assets, book-keeping, prepare annual accounts, present audit report before the
BOD, appointment for the company etc.
• Furnish the members with periodic information to appraise them of the operation and
functions of the Company.
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22.
Formalities after registration of Company
• 04-board meeting needs to be done in one-year.
• Each director should be invited & it should be disseminated before 07-days.
• AGM’s preparation are finalized in this meeting.
• Discussion on Business plan & budget.
• Quorum of meeting (1/3) should be maintained.
Board-meeting
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23.
Annual General Meeting (AGM)
• AGM must be conducted within 90-days of incorporation of Company.
• AGM should be called by giving notice of 14-days to all the shareholders.
• ¼ of the shareholders must for maintaining the quorum of AGM.
• The agenda of AGM includes appointment of Chairman & new directors, auditors, discussion on MoA,
AoA, Business planning etc.
• Every AGM should be conducted before 30th Sept. (within 15-months)
• Notice of AGM should contains Agenda, MoM of last meeting, audited B/S etc.
• MoM, auditor report, Profit & loss statement must be sent to RoC within 60-days of AGM otherwise penalty
of Rs.100/day can be imposed.
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24.
Book-keeping for Producer Company
1. Member register
2. Directors register
3. Fixed assets register
4. Meeting register
5. Stock register
6. Cash book
7. Sales register
8. Expense register
9. Bank statement
10. Purchase register
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25.
Business-Plan for Producer Company
A Business Plan helps a director to define objectives, and set targets and design a framework for
benchmarking and monitoring implementation.
B-Plan should consists of:
• Project profile
• Promoter/Entrepreneur profile
• Details of proposed Project
• Market potential
• Manufacturing process
• Sources & amount of investment
• Income & expenditure statement
• Profitability projection
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26.
Input facilitation
Primary
processing
services
MSP facilitation
Auction fees
collected
Custom hiring
servicesWorking capital
Capacity
building of
BDOs
Market linkages
Grants from different
institutions
Revenue
Model for
FPC
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27.
Major schemes for Farmer Producer Company
Ministry of Agriculture
& Farmers welfare
• Pradhanmantri Fasal Bima Yojana
• Soil Health Card
• Pradhanmantri Krishi Sinchayee Yojana
• National Agriculture Marketing (e-NAM)
• Agriculture Credit
Ministry of Food
Processing Industries
• Mega Food Park Scheme
• Schemes for Cold chain, Value addition & Preservation infrastructure
• Schemes for creation of Backward & Forward linkages
• Schemes for infrastructure for Agro-Processing cluster
Other schemes
• PMEGP
• Credit Guarantee fund Scheme for Micro & small enterprises
• MUDRA Loan schemes
• SFURTI
• Micro & Small enterprises-Cluster Development Programme (MSE-CDP)
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