Incorporation of Farmer Producer Company

According to the Companies Act, 1956; a producer company can be formed by 10 or more persons; 2 or more institutions; or by a combination of both, there is no upper limitation on the number of members. The one of the objectives for the formation of producer company should be procurement, production, harvesting, grading, pooling, handling, marketing, selling or export of the product or import of good and services for the benefit of members.

The producer company facilitates the formation of co-operatives as companies and support the co-operatives to convert into companies. The concept of farmer Producer Company seeks to foster the betterment of financially aggrieved farmers in India through synergy and collective efforts. 

Such entities seek to operate in line with the underlying objects, which typically revolve around the mutual financial growth of the member. As such, Farmer Company has no intention to serve the public domain in any way.

Note: Farmer Company Can also serve a Role of a Lending Agency with RBI’s Consent. 

Objectives of the Farmer Producer Company 

The producer company is essentially permitted to undertake any of the following tasks by itself or through other entities on behalf of the members:

• The procurement, production, harvesting, grading, pooling, handling, marketing, selling or export of the product or import of good and services for the benefit of members.

• Processing including preserving, distilling, brewing, canning, & packaging the produce of members.
• Manufacture, sale, or supply of machinery, equipment or consumables to its members
• Providing education to its members and others on basis of mutual assistance principles.
• Giving technical services, consultancy services, research and development, training, etc, for promoting interest of members.
• Generation, transmission and distribution of power. Restoration of land and water resources, its use conversation and communication relating to primary produce.
• Insurance of primary produce and their producers.
• Promotion of techniques of mutuality and mutual assistance.
• Welfare measures for benefit of members.
• Any other activity which is ancillary or incidental to above-mentioned objectives.
• Financing all activities or extending credit facilities or financial conditions of the members.