Palamu FPO Farmers to Process and Sell Mustard Oil After Getting Mill at 95 Percent Government Subsidy

The Pandwa Fed Farmer Producer Company Limited in Palamu district's Pandwa block has received an oil mill worth approximately 25 lakh rupees at a 95 percent government subsidy, enabling its 765 member farmers to extract mustard oil and sell it at around 200 rupees per litre rather than selling raw mustard at 50 to 60 rupees per kilogram.

A New Chapter for Farming in Pandwa Block
Farmers in Pandwa block of Palamu district, Jharkhand, are on the cusp of a significant change in how they earn from their crops. The Pandwa Fed Farmer Producer Company Limited, a Farmer Producer Organisation (FPO), is setting up an oil mill that will free its members from the constraints of raw crop sales. Once operational, farmers will be able to press mustard oil from their own produce and supply it directly to the market, retaining far more value from every harvest instead of selling unprocessed grain at farm-gate prices.

Government Covers 95 Percent of the 25 Lakh Rupee Project Cost
The oil mill is valued at approximately 25 lakh rupees. Established with support from Vejfed Ranchi, the project has received a 95 percent government subsidy, which means the beneficiary farmers had to contribute only 5 percent of the total amount themselves. The machinery is being installed within an area of roughly 30×40 feet. Farmer Omkar Nath of Pandwa told TrendKia that the project marks a decisive step toward financial self-reliance for the FPO.

Raw Mustard at 50-60 Rupees a Kilo Versus Oil at 200 Rupees a Litre
The economic logic behind the initiative is straightforward and compelling. At present, farmers sell unprocessed mustard directly from their fields at 50 to 60 rupees per kilogram, capturing only a small share of the commodity's total worth. Once the mill is running, the oil extracted from that same mustard can fetch around 200 rupees per litre in the local market, a dramatic increase in value realisation. This is expected to raise farmer incomes substantially. Local consumers stand to benefit as well, gaining access to fresh and pure mustard oil, while the processing unit is set to open up new employment opportunities in the surrounding area.

Four Years of Operation, 765 Member Farmers and Growing
The Pandwa Fed Farmer Producer Company Limited has been actively functioning for four years and presently has 765 farmers enrolled as members. The FPO already provides fertilisers and seeds to these farmers at a 50 percent subsidy. Looking ahead, the organisation also plans to make agricultural machinery available on a rental basis, a move that will lower the cost of cultivation and allow members to scale up production without heavy personal investment.

Building Long-Term Financial Independence for the FPO
Omkar Nath noted that while government backing is generous in an FPO's early years, the organisation must ultimately sustain itself through its own revenues. The oil mill sits at the centre of this long-term plan: income from processing and selling mustard oil will allow the FPO to cover its operational costs without continued reliance on state grants. By participating directly in processing and the supply chain, farmers will receive a far better price for their labour, and the Pandwa region will have a working model of agriculture-linked enterprise to build on for years to come.

What this means for you
• Across India: This model demonstrates how FPOs can help oilseed farmers multiply their income by selling processed goods rather than raw produce, offering a replicable blueprint for farming communities across the country.
• In Palamu: The 765 member farmers of the Pandwa FPO will earn significantly better returns on their mustard crop, while local residents are likely to gain access to fresher, purer mustard oil at competitive prices.

Questions & Answers

1. How much did the Pandwa FPO have to pay out of pocket for the oil mill?
The oil mill costs approximately 25 lakh rupees in total, and with a 95 percent government subsidy, the FPO's farmers had to contribute only 5 percent of that amount themselves.

2. How much more will farmers earn from mustard once the oil mill is operational?
Farmers currently sell raw mustard at 50 to 60 rupees per kilogram, but once it is converted into oil it can be sold at around 200 rupees per litre.

3. How many farmers belong to the Pandwa Fed Farmer Producer Company Limited and how long has it been running?
The FPO currently has 765 member farmers and has been in active operation for four years.

4. What other support does the FPO offer its members beyond the oil mill?
The FPO provides fertilisers and seeds at a 50 percent subsidy and plans to make agricultural machinery available on rent to members in the future.

https://trendkia.com/en/jharkhand/palamu-ke-pndava-ephapio-ko-mili-tela-mila-95-pratishata-sarakari-anudana-se-aba-1612
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