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Arun Jaitley in his budget made several announcements ranging from minimum support price for farmers 1.5 times the production cost, easily accessible markets, disposal of crop residue, development reforms etc.  A five-year tax holiday for Farmer Producer Organisations (FPOs) with turnover of Rs 100 crore, announced by Finance Minister Arun Jaitley in his Budget, meets a long-pending demand and is aimed at helping the farmers get better prices for their produce. FPOs, which have started to come up only recently, are currently taxed at 30 per cent. 

The concept of ‘Farmer Producer Organizations, (FPO)’ consists of collectivization of Producers especially small and marginal farmers so as to form an effective alliance to collectively address many challenges of agriculture such as improved access to investment, technology, inputs and markets. Department of Agriculture and Cooperation under Ministry of Agriculture, Govt. of India has identified ‘Farmer Producer Organizations ‘registered under the special provisions of the Companies Act, 1956 as the most appropriate Institutional form around which the mobilization of farmers is to be made for building their capacity to collectively leverage their production and marketing strength. 

The Department of Agriculture and Cooperation (MoA) has setup ‘Small Farmers Agribusiness Consortium’ (SFAC), a society under DAC, as designated Agency to act as a single window for Technical support, Training needs, Research and Knowledge management and to create linkages to investment, Technology and Markets. SFAC provides all round support to State Governments FPOs and other entities engaged in promotion and development of FPOs, according to cardindia.net.

The ownership of the FPO is with its members. It is an organization of the producers, by the producers and for the producers. The essential features are: a. It is formed by a group of producers for either farm or non-farm activities; b. It is a registered body and a legal entity; c. Producers are shareholders in the organization;  d. It deals with business activities related to the primary produce/product; e. It works for the benefit of the member producers; f. A part of the profit is shared amongst the producers: and g. Rest of the surplus is added to its owned funds for business expansion, according to Nabard.