Vital Role of Cluster Based Business Organisations in Agriculture

What is a Cluster Based Business Organisation (CBBO)?

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

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.

Selection Criteria and Qualifications for CBBOs

CBBOs are chosen based on strict criteria to ensure they can effectively support FPOs. These criteria include:

• Being a legally registered entity in India for a minimum of 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.

Financial Support for CBBOs Under the Scheme

Each CBBO receives financial support of Rs 25 lakh per FPO from the implementing agencies, distributed over five years. This funding is intended to cover expenses incurred during the formation, incubation, and initial operational phases of each FPO, facilitating their journey toward sustainability and economic viability.

Achievements of CBBOs in Supporting FPOs

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 enhance their financial profiles and market presence.

The Critical Role of CBBOs in the FPO Scheme

CBBOs are crucial as they bridge the gap between farmer groups and markets, as well as between FPOs and government agencies. Their professional expertise and structured support ensure that FPOs not only form successfully but also thrive in competitive agricultural markets. This ultimately leads to increased economic benefits for farmers.

Frequently Asked Questions (FAQs)

Q1. What is the purpose of a CBBO?
Answer: The purpose of a CBBO is to support the formation and growth of Farmer Producer Organizations (FPOs) by providing essential services like training, market access, and business planning.

Q2. How do CBBOs assist in the formation of FPOs?
Answer: CBBOs assist in FPO formation by organizing farmers, conducting feasibility studies, and providing guidance on registration and capacity building.

Q3. What financial assistance do CBBOs receive?
Answer: CBBOs receive Rs 25 lakh per FPO over five years to cover costs related to formation, incubation, and initial operations, aiding in sustainability.

Q4. How many farmers have been mobilized by CBBOs?
Answer: CBBOs have mobilized over 5.87 lakh farmers, registering approximately 3 lakh as shareholders in various FPOs.

Q5. Why are CBBOs important for farmers?
Answer: CBBOs are vital as they help farmers form collectives, access markets, and enhance their economic stability through structured support and resources.

UPSC Practice MCQs

Question 1: What is the primary role of a Cluster Based Business Organisation (CBBO)?
A) To provide loans to farmers
B) To support Farmer Producer Organizations
C) To manage agricultural policies
D) To sell agricultural products
Correct Answer: B

Question 2: How long must a CBBO be registered to qualify for the FPO scheme?
A) One year
B) Two years
C) Three years
D) Five years
Correct Answer: C

Question 3: What is the minimum average turnover for CBBOs in the plains?
A) Rs 1 crore
B) Rs 2 crore
C) Rs 5 crore
D) Rs 10 crore
Correct Answer: B

Question 4: How many FPOs have been formed with the assistance of CBBOs?
A) 1000
B) 1500
C) 2000
D) 2331
Correct Answer: D