Farmer Producer Organization

Farmer Producer Company Registration in India

Producer Company is a legally recognized body of farmers/ agriculturists with the aim to improve the standard of their living, and ensure a good status of their available support, incomes and profitability. Under Companies Act 1956, a Producer Company can be formed by 10 individuals (or more) or 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions) having their business objective as one of the following:

  1. Production, harvesting, processing, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit. Primary produce has been defined under the Companies Act 1956 as a produce arising from agriculture by a farmer which includes animal husbandry, floriculture, horticulture, viticulture, pisciculture, re-vegetation, bee raising, forestry, forest products and farming plantation products, produce of hand-loom, handicraft and other cottage industries.
  2. Rendering technical services, consultancy services, training, education, research and development and all other activities for the promotion of the interests of its Members;
  3. Generation, transmission and distribution of power, revitalization of land and water resources, their use, conservation and communications relatable to primary produce;
  4. Promoting mutual assistance, welfare measures, financial services, insurance of producers or their primary produce;

Characteristics of a Farmer Producer Organization:

  •  Minimum 10 or more individuals, being a producer, or any two or more producer companies, or combination thereof, are required to form Producer Company.
  •  All Producer Company shall have at least 5 directors but not more than 15 directors.
  •  Conversion is not possible into any other business structure such as Private Limited company, Public Limited Company, LLP etc.
  •  It can never be converted into a public company however it can be converted into a multi-state co-operative society.
  •  Every Producer Company must contain words like “Producer Company Limited” at the end of its name
  •  Minimum Paid-up capital must be ₹ 5 lakh.
  •  Voting rights in this kind of companies are aligned with the principle of “one man-one vote”, regardless of shareholding in the producer Companies