Equity Grant under Formation and Promotion of 10,000 Farmer Producer Organizations

The Equity Grant under the Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs) scheme is a financial incentive designed to strengthen FPOs. It provides matching grants to boost the equity base of these organizations, enhancing their sustainability and creditworthiness.

What is the Equity Grant?

The Equity Grant is a matching grant provided to FPOs to increase their members' shareholding and overall equity. It's a financial incentive to encourage greater ownership and participation of farmer members in their FPOs.

Key Objectives of the Equity Grant

· Enhance Viability and Sustainability: Improve the long-term viability and financial sustainability of FPOs.

· Increase Creditworthiness: Boost the creditworthiness of FPOs, making it easier for them to access loans and other financial services.

· Increase Member Ownership and Participation: Encourage greater ownership and active participation of farmer members by increasing their shareholding in the FPO.

Eligibility Criteria for the Equity Grant

· Equity Raised from Members: The FPO must have raised equity from its members as per its Articles of Association/Bye-laws.

· Small and Marginal Farmer Membership: At least 50% of the FPO's shareholders must be small, marginal, and landless tenant farmers.

· Shareholding Limit: No single member can hold more than 10% of the total equity of the FPO.

· One Grant per Farmer: A farmer can only receive the matching grant once, even if they are a member of multiple FPOs.

· Women Representation: The Board of Directors (BOD) and Governing Body (GB) must have adequate representation of women farmer members, with at least one woman member.

· Management Committee: The FPO must have a Management Committee responsible for its business operations.

Benefits of the Equity Grant

· Matching Grant: The grant provides a matching amount up to Rs. 2,000 per farmer member, with a maximum limit of Rs. 15 lakh per FPO.

· Increased Equity Base: Enhances the FPO's financial strength and stability.

· Improved Access to Credit: Makes it easier for FPOs to secure loans and other credit facilities.

· Greater Member Ownership: Encourages members to take a more active role in the FPO's governance and decision-making.

How to Apply for the Equity Grant?

1. Meet Eligibility Criteria: Ensure the FPO meets all the eligibility criteria outlined above.

2. Contact Implementing Agencies: The FPO should contact the district office of the Implementing Agencies (SFAC, NCDC, or NABARD).

3. Submit Application: Fill out the application form and submit it along with the required documents to the implementing agency.

4. Review and Approval: The implementing agency will review the application and approve the grant if all criteria are met.

Documents Required for Application

· Business Plan: A comprehensive business plan for the FPO.

· Bank Account Statement: Bank account statements of the FPO.

· Shareholder List: A list of shareholders and their share capital contributions, verified and certified by a CA/Cooperative Auditor.

· Balance Sheet: Past years' balance sheets of the FPO.

· Profit and Loss Statements: Audited profit and loss statements of the FPO.

· Application Form: A completed scheme application form.

· Identity Proof (for individual members): Ration Card, Aadhar Card, Voter ID, or Passport.

FAQs About the Equity Grant

1. What is the maximum grant amount?
Rs. 15 lakh per FPO.

2. How is the grant disbursed?
As a matching grant, up to Rs. 2,000 per farmer member.

3. Who are the implementing agencies?
SFAC, NCDC, and NABARD.

4. How often can an FPO apply for the grant?
Once.

Why Should You Apply for the Equity Grant?

The Equity Grant provides a valuable opportunity for FPOs to strengthen their financial position, improve their access to credit, and empower their members. It is a significant step towards building sustainable and thriving farmer-owned businesses.

Conclusion

The Equity Grant under the Formation and Promotion of 10,000 FPOs scheme is a crucial intervention to empower small and marginal farmers by strengthening their collective organizations. By enhancing the financial viability and member ownership of FPOs, the grant contributes to improving farmers' livelihoods, promoting sustainable agriculture, and boosting rural economies.