New Delhi, Jun 19 (IANS): Federation of 'Farmer Producer Organisation' (FPO) is required in each state to exploit economies of scales as well as enhance farmers' income levels, Grant Thornton Bharat said in a report.

"The next big step could be to confederate a few FPOs in a district or state into a federal body through an SPV, to carry out intensive and vigorous marketing activities with greater scale economies, and leverage upon newly proposed schemes to promote agri infrastructure, establish storage facilities etc," the report said.

"Subsequently, they could also diversify into secondary processing, with a strategy to focus upon hyperlocal marketing activities for their products and building hyperlocal brands."

Besides, the report said that FPOs may now move onto the challenging task of secondary processing and value-addition, and virtually develop into a more vibrant agri-business start ups, albeit with a 'farmer-friendly and a farmer-led face'.

"Moreover, the newly launched GoI programme for 'Formation and Promotion of 10,000 new Farmer Producer Organizations (FPOs)' may draw upon learnings from this intervention and also work on federating block level FPOs into larger agglomeration platforms, as to help them derive benefit of even greater scale economies and bargaining power."

Furthermore, it cited that as an enabling policy initiative, the GOI may consider the complete waiver of IT from FPOs rather than "a mere 5-year holiday".

"The MAT that FPOs have to contribute is a burden on typical marginal and small farmer-led FPOs."