Currently, the National Cooperative Development Corporation (NCDC) provides financial assistance to cooperatives including those from weaker sections, for infrastructure and business development among others.
"We have suggested a small amendment to the Act to incorporate FPOs for extending loans and subsidies," a senior Agriculture Ministry official said.
The government is encouraging setting up of FPOs in a big way and trying to provide credit facilities through various schemes so that FPOs become viable, the official added.
FPOs, which are registered under the Companies Act, are firms consisting of small and marginal farmers. There are total 300 FPOs in India supported by government body Small Farmers Agribusiness Consortium (SFAC).
NCDC, a statutory body, had in 2013-14 fiscal released Rs 5,268 crore, against the sanctioned amount of Rs 7,755 crore for the same period.
Maximum funds were released to cooperatives working in Chattisgarh, Maharashtra, Kerala, Tamil Nadu and Uttar Pradesh, an official data showed.
Financial assistance is being given for production, processing, marketing, storage, export and import of
agricultural produce and other notified commodities.