The Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme, launched in 2020 with ₹6,865 crore budget, aims to create sustainable farmer collectives by 2027-28. NABARD and SFAC are key implementing agencies. Each FPO covers 300+ small farmers or 100+ marginal farmers. Currently 8,000+ FPOs are operational with government providing ₹18 lakh support per FPO over five years. Focus areas include aggregation, value addition, marketing, and input supply to enhance farmer incomes.

FPOs represent a paradigm shift from individual farming to collective agriculture, addressing India's farm fragmentation crisis where 86% holdings are below 2 hectares. The scheme builds on earlier initiatives but with enhanced financial support and professional management focus. Each FPO functions as a producer company under Companies Act 2013, enabling farmers to aggregate produce, negotiate better prices, access credit, and reduce input costs. The model addresses market failures by creating economies of scale - while individual farmers struggle with price discovery and storage, FPOs can establish direct linkages with processors and retailers. NABARD's role extends beyond funding to capacity building through Cluster-Based Business Organizations (CBBOs) that provide handholding support. The scheme's success is measured not just by numbers formed but operational efficiency - revenue generation, member satisfaction, and sustainable business models. States like Maharashtra, Uttar Pradesh lead in FPO formation while northeastern states lag. Key challenges include governance issues, market linkage establishment, and ensuring equitable benefit distribution among members. The policy's effectiveness directly impacts rural employment, agricultural productivity, and farmer welfare - making it central to achieving doubling farmer income goals.