{"id":5941,"date":"2019-08-17T18:30:00","date_gmt":"2019-08-17T13:00:00","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=5941"},"modified":"2020-01-13T12:35:37","modified_gmt":"2020-01-13T07:05:37","slug":"benefits-of-farmer-producer-company-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/","title":{"rendered":"Benefits of Farmer Producer Company in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">With 62% of people dependent upon agriculture, India is no doubt an agriculture-based country. But still, farmers in India are unorganized and deprived of the latest technologies and techniques in agricultural sector production. It leads to crop failure due to which farmers have to face great losses and more than 15% of farmers every year accounts for suicide in India. To look into this matter an expert committee has been set up by the Indian government. As a result, the Farmer Producer Company came into existence. <\/p>\n\n\n\n<div class=\"wp-block-button aligncenter\"><a class=\"wp-block-button__link has-background\" href=\"https:\/\/swaritadvisors.com\/producer-company-registration\" style=\"background-color:#01669c\">Get Start Farmer Producer Company Today &#8211; Apply Now<\/a><\/div>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a318ec1149ce\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a318ec1149ce\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#What_is_the_role_of_Farmer_Producer_Company\" title=\"What is the role of Farmer Producer\nCompany?\">What is the role of Farmer Producer\nCompany?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#What_are_the_benefits_of_Farmer_Producer_Company_Registration_in_India\" title=\"What are the benefits of Farmer\nProducer Company Registration in India?\">What are the benefits of Farmer\nProducer Company Registration in India?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#More_Credibility\" title=\"More Credibility\">More Credibility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#Limited_liability_and_separate_legal_entity\" title=\"Limited liability and separate legal entity\">Limited liability and separate legal entity<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#Own_a_property\" title=\"Own a property\">Own a property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#Ease_in_management_and_registration\" title=\"Ease in management and registration\">Ease in management and registration<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#Acceptance_of_Deposits\" title=\"Acceptance of Deposits\">Acceptance of Deposits<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#What_are_the_benefits_for_the_members_of_the_Farmer_Producer_Company\" title=\"What are the benefits for the members of the Farmer Producer Company?\">What are the benefits for the members of the Farmer Producer Company?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#What_are_the_tax_benefits_for_the_farmer_producer_company_in_India\" title=\"What are the tax benefits for the\nfarmer producer company in India?\">What are the tax benefits for the\nfarmer producer company in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/benefits-of-farmer-producer-company-in-india\/#Summary\" title=\"Summary \">Summary <\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_the_role_of_Farmer_Producer_Company\"><\/span>What is the role of Farmer Producer\nCompany?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A farmer <a href=\"https:\/\/swaritadvisors.com\/producer-company-registration\">producer company<\/a> is a cluster of farmers that join their hands to improve their income so that they could have a better standard of living. In India, you can set up a Producer Company with just 10 members and 2 institutions. <\/p>\n\n\n\n<p>More than 80% of farmers in India are disorganized and have small &amp; marginal lands. Farmer Producer Company empowers the farmers and helps them achieving their economic scale through their objectives of:<\/p>\n\n\n\n<ul><li>Production <\/li><li>Procurement<\/li><li>Harvesting and Grading<\/li><li>Poling and Handling<\/li><li>Marketing of\nagricultural produce<\/li><li>Selling or export\/import\nof agricultural produce. <\/li><\/ul>\n\n\n\n<p>An organization will be\ndefined as&nbsp;a Farmer Producers Organization or Producer Company, only if:<\/p>\n\n\n\n<ul><li>It is formed by a group of producers for their farm or non-farm activities;<\/li><li>It&#8217;s a legal entity and a registered body;<\/li><li>Producers in the company are the shareholders in the organization;<\/li><li>The company deals with business activities related to the production of the primary produce;<\/li><li>The company looks after the requirement of the members and works for the benefit of the producer members;<\/li><li>Profit Portions are shared amongst the producers and the balance is made within the share capital or reserves.<\/li><\/ul>\n\n\n\n<div class=\"browse\">\n<p>Browse through our articles on services provided at <a href=\"https:\/\/swaritadvisors.com\">Swarit Advisors<\/a>, and just let us know if we can help you with your Food Business or MSME Registration or Startup Services.<\/p>\n<div class=\"browse1\">\n<table class=\"table1\">\n\n<tbody>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/fssai-license\"><span>Fssai License<\/a>&nbsp;<\/span><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/fssai-central-license\"><span>Fssai Central License<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/fssai-state-license\"><span>Fssai State License<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/gst-registration\"><span>GST Registration<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/eating-house-license\"><span>Eating House License<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/trademark-registration\"><span>Trademark Registration<\/span><\/a><\/td>\n<\/tr>\n<tr>\n<td><a href=\"https:\/\/swaritadvisors.com\/msme-registration\"><span>MSME Registration<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/iec-registration\"><span>IEC Registration<\/span><\/a><\/td>\n<td><a href=\"https:\/\/swaritadvisors.com\/patent-registration\"><span>Patent Registration<\/span><\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/table>\n<\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_benefits_of_Farmer_Producer_Company_Registration_in_India\"><\/span>What are the benefits of Farmer\nProducer Company Registration in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The main purpose of the Producer Company is to form a farmer society in the form of a company and conversion of an existing co-operative society into an organized company. For this, they perform certain beneficial activities like production, procurement, pooling, harvesting, grading, handling, marketing, selling and import\/export of the primary producers of all the members. <\/p>\n\n\n\n<p>Here are some important benefits of registering a Farmer Producer Company in India:<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"664\" height=\"529\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2019\/08\/Benefits-of-Farmer-Producer-Company-1.png\" alt=\"Benefits of Producer Company\" class=\"wp-image-5945\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2019\/08\/Benefits-of-Farmer-Producer-Company-1.png 664w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2019\/08\/Benefits-of-Farmer-Producer-Company-1-300x239.png 300w\" sizes=\"(max-width: 664px) 100vw, 664px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"More_Credibility\"><\/span>More Credibility<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A producer company offers\nmore credibility to the farmers as compared to other unregistered organizations\nof farmers or agriculturists.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Limited_liability_and_separate_legal_entity\"><\/span>Limited liability and separate legal entity<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Registering as a\nproducer company provides a separate legal entity and limited liabilities to\nits members. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Own_a_property\"><\/span>Own a property<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A duly registered farmer company has the right to sell or own a property in its name. Furthermore, it is entitled to accept the deposits or to give loans at very reasonable interest rates to its agriculturist members.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Ease_in_management_and_registration\"><\/span>Ease in management and registration<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Registration as a producer company is an easy process and the company can make changes in the Board of Management through filing some simple forms with the concerned ROC. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Acceptance_of_Deposits\"><\/span>Acceptance of Deposits<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A registered company can\naccept deposits in the form of fixed or recurring deposits. Other than that\nthey can also disburse the loan to the members and farmers at a very reasonable\nrate of interest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_benefits_for_the_members_of_the_Farmer_Producer_Company\"><\/span>What are the benefits for the members of the Farmer Producer Company?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Here are some chief\nbenefits of the producer company to its own members:<\/p>\n\n\n\n<ul><li>The most important\nbenefit is that the members of the Producer Company receive the amount for the\nproduce pooled and supplied after the determination by the directors of the\nrespective producer company. This amount is further disbursed in the form of\ncash or equity shares to the members of the company. <\/li><\/ul>\n\n\n\n<ul><li>Producer Company members\nalso get bonus shares in the same proportion as equity shares they hold in the\nproducer company. <\/li><\/ul>\n\n\n\n<ul><li>Surplus (after providing\nprovision for the payment of the limited return and reserves) may be given to\nthe members of the producer company as the patronage bonus. Patronage bonus\nsignifies the surplus income distribution among the members of the producer\ncompany in the proportion of their patronage. On the other hand, Patronage is\nthe participation of the member in the business activities.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_tax_benefits_for_the_farmer_producer_company_in_India\"><\/span>What are the tax benefits for the\nfarmer producer company in India?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Agricultural income is exempted under <a href=\"https:\/\/www.incometaxindia.gov.in\/tutorials\/11.tax%20free%20incomes%20final.pdf\">Section 10(1) of the Income Tax Act<\/a>, 1961. However, exemption on the agricultural income varies based on the activity carried out by the producers or farmers. <\/p>\n\n\n\n<p>There are no special tax\nbenefits provided by the Income Tax Act to the farmer producer companies while\nthere are certain tax exemptions and benefits that they can be avail with\nsubject to the agricultural activity carried out by the company.<\/p>\n\n\n\n<p>For example, currently, the agriculture income is 100% exempted. Therefore, income generated from the green tea leaves is tax-free but if those tea leaves are used for the purpose of manufacturing tea then 60% income shall be exempted and the other&nbsp;40% is liable to be taxed.<\/p>\n\n\n\n<p>Therefore it is cleared\nthat the tax benefits and exemption depends upon the activity carried out by\nthe company.<\/p>\n\n\n\n<p>At times of limited\nreturn distribution and patronage bonus, the dividend tax at the applicable\nrates is required to be paid by the Producer Company while it will be tax-free\nin the hands of the members of the company.<\/p>\n\n\n\n<p>During Bonus Shares&#8217; allotment, members are free from any tax liability. However, provisions regarding the capital gain tax shall apply during the sale or redemption.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Summary\"><\/span>Summary <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The majority of farmers in India find it hard to realize the optimal value for their primary production due to lack of facilities and fragmentation of landholdings. But producer companies in India help them to utilize economies of scale to procure inputs at lowest cost rates, adopt new technologies, easy access to finance and loans, building up direct linkages to the market and develop facilities related to post-harvest processing. <\/p>\n\n\n\n<p>Farmer Producer Company is a cluster of farmers that comes together to make their lives better and to improve their standards of living. Farmer producer company registration provides separate legal entity to the company and provides various tax exemptions and benefits. Other than that it has various benefits for the members including bonus, ease in availability of loans at low-interest rates and many more. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>With 62% of people dependent upon agriculture, India is no doubt an agriculture-based country. But still, farmers in India are unorganized and deprived of the latest technologies and techniques in agricultural sector production. It leads to crop failure due to which farmers have to face great losses and more than 15% of farmers every year [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5943,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[170],"tags":[85,87],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/5941"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=5941"}],"version-history":[{"count":10,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/5941\/revisions"}],"predecessor-version":[{"id":8368,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/5941\/revisions\/8368"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/5943"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=5941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=5941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=5941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}