How does an FPO aggregate and sell members produce for a better price?

FPO aggregation works by collecting produce from many members at a common collection point, grading and cleaning it to a uniform quality, and then selling the bulked lot to a single large buyer, processor, exporter or through eNAM. Because the FPO offers volume and consistent quality, it can negotiate a better rate than a lone small farmer, and it can save on transport by sending full truckloads. For this the FPO needs a trading licence or eNAM trader registration as required, working capital to sometimes pay members before the buyer pays, storage or a collection shed, and clear records of each member's quantity and grade. On money sharing, the common method is to pay each member according to the weight and grade they contributed, after deducting agreed FPO charges for grading, transport and handling; some FPOs pay a part upfront and the balance after the buyer settles. Keeping transparent member wise records is what keeps trust and avoids disputes. Confirm the licensing and working capital options for your FPO with your CBBO or state marketing department.