FPO, FPC,

and
Co-operatives
PRESENTED BY - GROUP 6
Rhea Ditto Panakkal
Shraiyansh Pareek
Manik Upadhyay
Amit Halder
Vijay Pahari
Chintamani Anil Desai
Farmer Producer
Organizations
Farmer Producer Organization (FPO)
is a group of farmers with special
interests and concerns. It has a
developed structure, formal
membership status, and functions for
its members with a set of by-laws and
rules.
A farmer producer organization can
register itself under special provision
of the Company Act (1956). The
concept of FPO came into existence in
2003 by an amendment done in the 9th
part of the Company Act 1956.
Aims

Collaboration
Improved
of Small Accessibility
Marketability
Farmers

Credit
Better Income Reduced Costs
Facilitation
Structure
of FPO
 Financial

Services Marketing
Networkin
g
provided by
FPO

Input
Technical
Supply
Members & Management

Members
– No. of Directors should be 5 to 15
– Directors should be appointed within 90 days of incorporation
– A full time CEO appointed with substantial power of management
– Share capital consists only Equity shares

Voting
– Single vote for every member (Individual producer)
– On basis of participation (institution producer)
Support Organizations
- NABARD

- SFAC

- Government Agencies

- Corporates

- Domestic and Financial Aid

- NGO
Sources of Finance
Own Resources

Suppliers’ Credit and Advance Payment from Buyers

Equity

Grant support
Business Plan

Business
Business Ideas Short-listing Business Opportunities/Threat Opportunities
Market Plan Financial Plan
Generation Ideas s Analysis Identification &
Selection
Monitoring Institutions

POPI (Producer Organization Promoting Institutions) - Monitors

the work of the PO as well as ground level achievements
Funding Agencies - Monitors the targets vis-a-vis achievements,
quality of implementation, participation of members and adequacy of
training programmes
Farmer Producer
Companies
A producer company is basically a body
that shall carry on activities such as
rendering technical services,
consultancy services, training,
education, research and development
and all other activities for the promotion
of the interests of its Members.
The concept of Producer Companies
was introduced in 2002 by incorporating
a new Part IXA (section 581A to
581ZT) into the Companies Act, 1956.
Aims

Frame a legislation that would enable incorporation

of cooperatives as companies and conversion of
existing cooperatives into companies;

Ensuring the unique elements of cooperative

business with a regulatory framework similar to
that of companies
 Procuremen
t

Export Production

Business Selling Harvesting

Objectives

Marketing Grading

Handling Pooling
Incorporation

- Any of the following combination of producers can incorporate a producer

company:
o Ten or more producers (individuals); or
o Two or more producer institutions; or
o Combination of the above two (10+2)

- A minimum capital of Rs. 500,000 is required to incorporate a producer company.

o Minimum 5 directors (maximum of 15) in a producer company
o It can never be converted into a public company however it can be converted into a
multi-state co-operative society.
Registration Procedure

Name of the
Liability of the
Companies company shall The maximum
members will
Only primary shall be termed end with the number of 50
be limited to
producers can as “Companies words members is not
the amount, if
register with Limited "Producer applicable to
any, unpaid on
Liability” and Company these.
the shares.
Limited"
Share Capital and Voting Rights

(i) The share capital of a Producer Company shall consist of equity shares only.
(ii) Members' equity cannot be publicly traded but only transferred.
(iii) 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.
– combination of both individuals and producer institutions then voting rights
shall be based on a single vote for every member.
Management and Reserves
Management:

– Every producer company is to have at least five 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.

Reserves:

– Every producer company has to maintain a general reserve in every financial year
and in case there are not sufficient funds in any year for such transfer, the shortfall has to
be made up by members' contribution in proportion to their patronage in the business.
Loans and Investments

Financial
Assistance to
Members

Loans and
Credit Facility NABARD Loan
Advances
 Credibilit
y

Tax Limited
Advantages of Benefits Liability

FPC

Ease of Member
Business Benefits
Co-operatives
A cooperative is defined as an
autonomous association of
persons united voluntarily to meet
their common economic, social,
and cultural needs and aspirations
through a jointly-owned and
democratically-controlled
enterprise.
A Co-operative Society can be
formed as per the provisions of the
Cooperative Societies Act, 1912.
Aims

Financial Developing
Social Welfare Creating Unity
Stability Efficiency

Supply of Solution of
Creating Self- Poverty
goods at fair capital
Dependency Alleviation
price problem
Characteristics Separate
Open Membership
Legal
Voluntary
Service Entity
Motive
Association
Democratic
State
Management
Control
Sources of Finance
Structure of
Co-operatives
Members and Management

– Duty
– Voting
– Management of Society
– Chairperson/President of society
 Creation of
Unity

Establishment
Economic of Large-scale
businesses
Skill
Improvement

Importance of
Co-operatives
Employment
Loan Facilities
Generation
 1. Consumer’s Co-operative Society

2. Producer’s Co-operative Society

Types of
3. Co-operative Marketing Society
Co-operatives
4. Co-operative Farming Society

5. Credit Co-operative Society

 Advantages
• Equality in Voting Status
• Limited Liability
• Stable Existence
• Economy in Operation
• Government Support
• Ease of Formation
Disadvantages
• Limited Resources
• Inefficiency in Management
• Lack of Secrecy
• Government Control
• Differences of Opinions
 PARAMETERS CO-OPERATIVE SOCIETY PRODUCER COMPANY
Registration Cooperative Societies Act Indian Companies Act

Objectives Single object Multi-object

Area of Restricted, discretionary Entire Union of India

Operation

Producer Membership

Share
Individuals and cooperatives

Non tradable
Any individual, group, association, producer
of goods or services
Not tradable but transferable; limited to

Companies and Profit sharing Limited dividends on shares

members at par value
Commensurate with volume of business

Co-operatives Voting rights One member, one vote, but

Government and Registrar of
Cooperatives hold veto power
One member, one vote. Members not
having transactions with the company
cannot vote
Government Highly patronized to the extent Minimal, limited to statutory requirements
control of interference

Extent of Limited in “real world scenario” Fully autonomous, self-ruled within the
Autonomy provisions of Act

Reserves Created if there are profits Mandatory to create every year

References

1. NABARD Farmer Producer Organizations -

https://www.nafpo.in/wp-content/uploads/2019/05/Nabard_FARM
ER-PRODUCER-ORGANISATIONS.pdf
2. Agricultural Finance and Co-operation (TNAU) -
https://agrimoon.com/wp-content/uploads/Agricultural-Finance-Co
operation.pdf
3. Extension Digest (MANAGE) -
https://www.manage.gov.in/publications/edigest/jun2018.pdf
THANK YOU