10,000 FPOs Have Crossed ₹20,000 Crore Turnover, Can Farmer Groups Help Small Farmers Earn More?

India has reached a major milestone in its effort to organise small farmers into business groups. The government says 10,000 Farmer Producer Organisations, or FPOs, have been formed under the central scheme launched in 2020. Their cumulative turnover reached ₹20,358 crore by July 31, 2026.

An FPO brings farmers together as members of a registered organisation. Instead of every farmer buying inputs or selling produce separately, members can work collectively. The group can purchase seeds and fertilisers, aggregate crops, negotiate with buyers, process produce and explore larger markets.

This collective approach is important because small farmers often handle relatively small quantities individually. A buyer may be more interested in purchasing a large, consistent quantity. An FPO can collect produce from several members and negotiate as a group.

The government says more than 65 lakh shareholders, predominantly small and marginal farmers, have been brought together under the 10,000 FPO scheme. The FPOs are involved in input supply, aggregation, trading, processing, seed production, digital commerce and export-related activities.

How can an FPO help farmers reduce costs?

One of the simplest benefits can come before a crop is even sold. An FPO can purchase agricultural inputs in larger quantities for its members. Bulk procurement can give the organisation greater bargaining power than an individual farmer buying a small quantity from a local seller.

FPOs can also obtain licences to supply inputs. As of August 2026, 6,928 FPOs had seed licences, 4,987 had pesticide licences and 6,650 had fertiliser licences. This allows some farmer organisations to develop input businesses alongside their crop marketing activities.

Selling collectively can also change the bargaining position of farmers. Instead of approaching buyers separately, an FPO can aggregate produce and negotiate for a larger order. This can be particularly useful for crops where buyers require a minimum quantity or consistent quality.

The FPO scheme provides financial support during the early years. Each eligible FPO can receive up to ₹18 lakh for management expenses over three years. A matching equity grant of up to ₹15 lakh can strengthen its capital base, while a credit guarantee can support project loans of up to ₹2 crore.

Can FPOs earn more through processing?

Selling raw produce is not the only business option available to FPOs. Groups can invest in cleaning, grading, packaging and processing so that part of the value remains with farmers. The government says 5,765 FPOs under the scheme had their own processing units by August 2026.

Processing can take different forms depending on the crop. A pulse FPO could clean, grade and package dal. A fruit group could sort and pack produce or make processed products. Oilseed farmers could explore oil extraction, while grain groups could develop packaged products for retail markets.

But processing also requires careful business planning. An FPO needs to understand equipment costs, electricity, labour, packaging, food safety rules, working capital and market demand. Buying machinery without a clear business plan can leave an organisation with high costs and low utilisation.

The government provides FPOs with five years of professional handholding through designated Cluster-Based Business Organisations. This support covers areas such as business planning, capacity building and market linkages. The aim is to help FPOs move beyond registration and develop sustainable businesses.

Can women farmers benefit from FPOs?

Women are playing a large role in the programme. Government data shows that 1,175 FPOs have been formed with 100% women members. About 40% of shareholders across the FPOs are women, and the scheme requires at least one woman member on the board or governing body of each FPO.

Women-led FPOs can work across several agricultural activities, including food processing, horticulture, livestock products, seeds and local value-added products. Collective businesses can also provide women farmers with a formal structure through which they can access markets, finance, training and government support.

For an individual farmer, joining an FPO does not automatically mean higher income. The benefits depend on how actively the organisation operates, what business it runs, its management quality and the markets it reaches. Farmers should understand membership terms, share contributions, services and expected returns before joining.

The growth of 10,000 FPOs shows that collective farming is becoming an important part of India’s agricultural business system. For small farmers, the biggest opportunity may be to move from selling small quantities individually to participating in organised buying, aggregation, processing and marketing.

The next challenge is making these organisations stronger businesses. The government data shows that FPOs have already crossed ₹20,000 crore in cumulative turnover, but their performance varies widely. Farmers should therefore look for FPOs with active members, transparent accounts, reliable buyers and a clear business plan before investing their time and money.