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Cluster-Based Business Orgs in India's FPO Scheme



  Apr 27, 2024

Cluster-Based Business Orgs in India's FPO Scheme



What is a Cluster Based Business Organisation (CBBO)?

A Cluster Based Business Organisation (CBBO) is a professional entity engaged to support the formation and growth of Farmer Producer Organizations (FPOs) under the Indian government’s scheme to establish 10,000 new FPOs. CBBOs facilitate the entire agricultural value chain from mobilizing farmers, aiding in registration, and providing ongoing support to ensure sustainable market linkage.

What are the main functions of CBBOs in the FPO scheme?

CBBOs play a multifaceted role in the FPO scheme including:

●Identifying and organizing farmers into cluster groups based on geographic and crop characteristics.

● Conducting feasibility studies to ensure the viability of forming FPOs.

● Assisting in the registration and formal establishment of FPOs.

● Providing training and capacity building to FPO members.

● Developing comprehensive business plans that span production, marketing, and value addition.

●Facilitating market access both locally and globally, ensuring FPOs connect with profitable markets.

How are CBBOs selected and what qualifications must they meet?

CBBOs are selected based on stringent criteria to ensure they are capable of handling the extensive responsibilities of supporting FPOs. These criteria include:

● Being a legally registered entity in India for at least three years.

● Having a minimum average turnover or fund utilization of Rs 2 crore in the plains and Rs 1 crore in the Himalayan and northeastern regions over the past three years.

● Demonstrating a positive net worth, ensuring financial stability and credibility.

What financial support do CBBOs receive under the scheme?

Each CBBO receives financial support of Rs 25 lakh per FPO from the implementing agencies, distributed over five years. This support is intended to cover the expenses incurred in the formation, incubation, and initial operational phase of each FPO, facilitating their path to becoming sustainable and economically viable entities.

What achievements have CBBOs facilitated for FPOs under this scheme?

CBBOs have been instrumental in:

● Mobilizing over 5.87 lakh farmers and registering about 3 lakh farmers as shareholders in various FPOs.

● The formation of 2331 FPOs as of the latest update.

● Enabling significant business transactions, with FPOs engaging in sales and marketing activities that bolster their financial profiles and market presence.

Why is the role of CBBOs critical to the success of the FPO scheme?

CBBOs are crucial because they provide the necessary bridge between farmer groups and the market, as well as between FPOs and government agencies. Their professional expertise and structured support help ensure that FPOs not only form successfully but also thrive in competitive agricultural markets, ultimately leading to increased economic benefits for farmers.
These FAQs provide a detailed look at the role, responsibilities, and impact of Cluster Based Business Organisations within the framework of India's ambitious FPO promotion scheme, highlighting their pivotal role in transforming the agricultural sector by empowering farmers through collective enterprise.



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