Graduating SHGs to FPOs: A Study of the Kamla Farmer Producers Company Ltd. ( KFPCL), Bihar

Cohesive self-help groups (SHGs) can provide backward linkages and financial resource managers for the farmer producer organisations (FPOs), and FPO can work as an extended arms to SHGs and build forward linkages through the mechanism of aggregation, value addition, collective marketing and trading. Thus, SHGs and existing FPOs can become complementary to each other and work in tandem, or existing SHGs can be graduated to FPOs. This model had already been experimented in the Madhya Pradesh District Poverty Initiative Project (MP-DPIP) scheme. Many of SHGs there have graduated to FPOs. To validate the technical feasibility and economic viability of the model, a study of SHGs which had graduated to FPOs has been examined by taking the case of Kamla Farmer Producers Company Ltd. ( KFPCL) in Bihar. This study was basically undertaken by Bankers Institute of Rural Development (BIRD), Lucknow. This article highlights the major findings of this study.