Introduction: Equity Grant Scheme for SFAC
The Equity Grant Scheme for SFAC is one of the most important Central Government initiatives for empowering Farmer Producer Companies (FPCs). Managed by the Small Farmers’ Agri-Business Consortium (SFAC) under the Ministry of Agriculture & Farmers’ Welfare, this scheme provides financial support to strengthen the equity base of FPOs and enhance their creditworthiness.
In this guide, we will cover the objectives, eligibility criteria, benefits, and detailed application process of the scheme. Whether you are an FPO looking for financial assistance or seeking clarity on compliance, this article will help you understand how to apply SFAC Equity Grant and make the most of the available opportunities.
What is the Equity Grant Scheme for SFAC?
The Equity Grant Scheme (EGS) is designed to provide matching equity grants to eligible FPOs. Under the scheme, FPOs can receive financial support up to ₹10 lakh, released in two tranches, to strengthen their capital base.
Key Features:
- Implemented by SFAC (Small Farmers’ Agri-Business Consortium)
- Applicable to duly registered Farmer Producer Companies (FPCs)
- Provides grant matching member contributions to equity
- Enhances the ownership and participation of farmer members
This initiative ensures that FPOs become more sustainable, creditworthy, and self-reliant in running agri-business operations.
Objectives of the Scheme
The scheme has been launched with clear objectives:
- Strengthen FPC equity base by matching shareholder contributions.
- Enhance sustainability & creditworthiness of FPOs.
- Improve participation of small & marginal farmers in equity holding.
- Enable access to financial institutions by improving company credibility.
Eligibility Criteria for FPOs
To apply for the Equity Grant Scheme for SFAC, an FPO must meet the following conditions:
- Must be a duly registered FPC under Part IXA of the Companies Act, 1956 or the Companies Act, 2013.
- Paid-up equity should not exceed ₹30 lakh at the time of application.
- Minimum of 50 individual shareholders.
- At least 33% shareholders must be small, marginal, or landless farmers.
- Maximum shareholding of an individual member should not exceed 5% of total equity.
- Institutional members cannot hold more than 10% equity.
- A duly elected Board of Directors (minimum five members) with at least one-woman member.
Benefits of the Equity Grant Scheme
By availing this scheme, FPOs can enjoy several advantages:
- Matching equity support up to ₹10 lakh (two tranches).
- Stronger equity base, making the FPO financially stable.
- Better credit access from banks and financial institutions.
- Increased participation of farmer members in ownership.
- Long-term sustainability of the FPO structure.
This makes it a crucial FPO subsidy scheme for emerging farmer groups across India.
Step-by-Step: How to Apply SFAC Equity Grant
One of the most searched queries is how to apply SFAC Equity Grant. Using a SFAC Subsidy Consultant can make the process easier, ensuring all documents and compliance requirements are fulfilled correctly.
SFAC Equity Grant Checklist
Before applying, here is a checklist to ensure you are prepared:
- FPC registered under Companies Act
- Minimum 50 shareholders
- 33% small/marginal/landless farmers included
- Paid-up equity ≤ ₹30 lakh
- Individual shareholding ≤ 5%
- Institutional shareholding ≤ 10%
- Properly audited financials available
- Board of Directors (with one woman member) in place
Following this checklist will reduce the chances of rejection.
Difference Between Equity Grant Scheme and Other Subsidy Schemes
While several FPO subsidy schemes exist in India, the Equity Grant Scheme for SFAC is unique because it directly strengthens the equity base of FPOs, unlike credit guarantee or working capital assistance programs. This ensures long-term stability rather than just short-term financing.
Why is this Scheme Important for FPOs?
- It helps emerging FPOs build a stronger capital structure.
- Encourages farmers to become active stakeholders in their company.
- Improves bargaining power of farmers in markets.
- Enhances eligibility for additional subsidies, loans, and schemes.
FAQs on Equity Grant Scheme for SFAC
Q1. Is the Equity Grant Scheme a Central or State Scheme?
It is a Central Government scheme, implemented by SFAC under the Ministry of Agriculture & Farmers’ Welfare.
Q2. Who can apply for the SFAC Equity Grant?
Any registered FPO meeting the eligibility criteria mentioned above.
Q3. What is the maximum grant amount?
Up to ₹10 lakh per FPO, disbursed in two tranches.
Q4. Can one member hold more than 5% equity?
No, individual member shareholding cannot exceed 5%.
Q5. How can a consultant help?
A SFAC Subsidy Consultant can guide in preparing documents, ensuring compliance, and increasing the chances of approval.
Conclusion
The Equity Grant Scheme for SFAC is a powerful tool for strengthening FPOs, especially those in their early stages. By enhancing equity, improving credibility, and ensuring sustainability, the scheme ensures farmer-led organizations thrive in the long run.
If you are an FPO looking to apply, make sure you follow the SFAC Equity Grant checklist and understand the eligibility criteria. For smoother processing and expert guidance, many FPOs prefer consulting professionals who specialize in FPO subsidy schemes.
