1. Central Sector Scheme for Development / Strengthening of Agriculture Marketing Infrastructure, Grading and Standardization

2. Changing Scenario in Agriculture
Transition from
Food Shortage and import to self sufficiency and export
Subsistence Farming to Intensive and technology-led / commercial cultivation
At present India is the leading producer of many crops in the world

3. Some Facts………
India is among top few producers of many agri. commodities in the World - Yet share in World Food Trade is only 1.6%
Post harvest value loss of F&V is 25-40% (value above Rs. 30,000 crore)- Yet less than 2% only is processed.
About million people have adequate purchase power of processed agri. goods- Yet value addition to agri. produce is below 7%.

4. Projections of Agri. Production
Million Tonnes
604.62
494.22
405.69
799.82
652.25
533.86
Total
402.07
334.79
278.79
432.80
360.68
300.10
Sugarcane
36.88
24.92
16.86
46.33
31.31
21.18
Oilseeds
165.67
134.61
110.04
320.69
260.26
212.58
Food grains
Marketable Surplus
Production
Commodity

5. Agri-Markets in India (as on 31.03.2006)
6680 Wholesale Markets in India (majority are regulated markets)
21671 Rural Primary Markets (about 15% are regulated markets) (Total – 28351)
2429 Principal Regulated Markets and Regulated Markets Sub-yards (Total – 7566)
(Govt Promoted organised marketing through a network of regulated markets)

6. Present Scenario- Karnataka
144 Main Markets and 343 Sub Markets
About 94 cold storages with storage capacity of 3.70 lakh MT
Storage Capacity of godowns is about 22 lakh MT
The storage capacity is inadequate
Existing markets are deficit in infrastructure

7. Objective of Regulated Markets
Ensure reasonable gain to the farmers by creating favourable environment in markets for fair play of supply and demand forces.
Regulate market practices and attain transparency in transactions
Aimed at providing proper method of sale, correct weighment, prompt payment and various marketing related services

8. Performance of RMs
RM provided physical facilities and institutional environment
RM achieved limited success in providing need based amenities and services conducive to efficient marketing.
Rural periodic markets in general and tribal markets in particular, remained out of its developmental ambit

9. Performance of RMs
RM became restrictive / monopolistic markets and no help in
Direct marketing / organised retail trading
Adoption of innovative marketing system
Promoting competitive marketing
Hence, the need for efficient marketing to provide incentive for enhanced production, to foster competition and to eliminate exploitation of farmers

10. Infrastructure Needed in Ideal Market – A) Core Facilities
Platforms for Automatic weighing
Auction Platforms
Packaging & Labeling Equipments
Drying Yards
Loading, Unloading & Dispatch Facilities
Grading Facilities
Standardization Facilities
Price Display Mechanism
Information Centres
Storage/Cold Rooms
Ripening Chambers
Public Address System
Extension and Training to Farmers

11. Infrastructure Needed – B) Support, Service & Maintenance
Water & Power Supply
Veterinary Services
Sanitary Facilities
Banking & Communication
Input supply
Repair/Maintenance Service
Office / Rest Rooms
Computerized Systems
Rain Proofing
Sheds for Animals
Market Education
Soil Testing Facilities
Drainage / Parking
Cleaning and Sanitation
Garbage Collection & Disposal
Waste Utilization
Vermi-Composting
Bio-gas Production/Power

12. Domestic Market Scenario
Only 2/3rd of regulated Markets have covered / open auction platforms
Only 1/4th of markets have drying yards
Cold storages exist only in 9% of markets
Grading facilities in less than 1/3rd of markets
Basic facilities like internal roads, boundary walls, electric lights, loading & unloading facilities, weighing equipments etc. not available in nearly 20% markets
Cold Chain – Non –existent

13. Domestic Market Scenario
Quality Certification system, transportation for perishables – non existent
Rural markets – lack basic infrastructure
Whole sale markets – lack modern facilities
Private / Direct markets for agricultural commodities – Not permitted

14. Reforms through Model APMC Act
Setting up of special commodity markets
PPP in management & extension activities/ Promotion of e-trading
Encouraging professional management in APMCs
Provisions for Contract Farming
Single point levy of market fee/ Single point registration of functionaries
Establishment of Private markets/ Farmer-consumer markets/ Direct marketing
Powers to State Government for exemption of market fee
Setting up of State Marketing Extension Cells/ State Agricultural Produce Standards Bureaus.

15. Central Sector Scheme- Operational Guidelines

16. Aim………
To attract large investments for the development / strengthening of Agriculture Marketing Infrastructure in the country and
Promotion of Grading and Standardization
“By offering a package of Incentives

17. Objectives
Provide additional infrastructure to meet the large expected marketable surpluses
Promote competitive alternative agriculture marketing infrastructure by inducement of private and cooperative sector investments
Enhance efficiency of existing agriculture marketing infrastructure
Promote Direct Marketing, reduction in intermediaries and handling channels, thus enhancing farmer’s income

18. Objectives
Provide infrastructure facilities for grading, standardization and quality certification of agriculture produce - Assured price to farmers commensurate with the quality
Promotion of pledge financing and marketing credit, introduction of negotiable warehouse receipt system
Promotion of forward and Future markets so as to stabilise market system and increase farmer’s income

19. Objectives
Promote direct integration of processing units with producers
Create awareness and provide education and training to different stakeholders in the marketing chain

20. The Scheme
Credit linked back ended subsidy on capital cost of general or commodity specific infrastructure for marketing of agricultural commodities and for strengthening and modernization existing markets
Linked to reforms - States to amend APMC Act to allow direct marketing and contract farming and to permit setting up of markets in private and cooperative sectors

21. Marketing Infrastructure
Functional Infrastructure for assembly, grading, standardization and quality certification, labeling, packaging, value addition facilities (without changing the product form)
Market user common facilities like market yards,platform for loading/ assembling and auction of the produce
Infrastructure for direct marketing from producers to consumers / processing units / bulk buyers, etc

22. Marketing Infrastructure
Infrastructure for e-trading, market intelligence, extension and market oriented production planning
Mobile infrastructure for post-harvest operations (excluding transport equipment. Refrigerated vans are eligible as a part of cold chain.)

23. Indicative Projects Agriculture Sector
Cleaning, Grading units for Maize, Ragi, Pulses, Paddy Primary Processing Plant, Seed Cleaning Centres, Packaging, labeling and coding units, Automatic produce handling plants, Quality Control Labs at block/ district/ division and State level, Drying yards/ automatic bulk dryers, Electronic weighing centres, Information Kiosks, E-trading units, Commodity-Specific Markets, Hermetic Storage- Mobile Cocoons, Modernization of Agriculture Produce Markets, Covered Stores- Establishment of Farmers Markets, ICT Infrastructure Agriculture Extension, Infrastructure for Contract Farming, etc.

24. Indicative Projects (contd)
Horticulture Sector
Cleaning, Grading Waxing and Packaging lines for Grapes, Mango, Pomegranate, Sapota, Cashew Primary Processing Unit, Cold Storages, CA, MAP Storages, Pre- Cooling units, Cold chains including refrigerated Vans, Ripening Chambers, Curing Chambers, Drying yards, PACK Station (Collection centre), Quality Stations, Pack Houses, Modernization and Establishment of Fruits & Vegetable Markets.

25. Indicative Projects (contd)
Livestock
Establishment of Livestock Market. Modernization of existing market, Fodder Banks, Mobile Fodder Banks, Baling Press, Egg Storage Centres, etc.

26. Indicative Projects (contd)
DAIRY
Milk Collection Centre, Milk Quality Testing Lab, Automatic Milching Machine,, Chilling Centre, Bulk Chilling Unit, Pasteurisation Plant, Milk Packaging Unit, Refrigerated van for collection and distribution.
FISHERIES
Chilling Plant, IQF Plant, Fish Storage & Markets.
Fishing nets, fiber glass fishing boats, Tuna long liners/ boats

27. Indicative Projects (contd)
APICULTURE
Honey Extraction Unit, Collection Centre, Bulk Storage Units, Honey Processing Units, Wax Separator and Collection Unit.
MINOR FOREST PRODUCE
Bidi Leaf Collection Centre, Bidi Leaf Primary Processing Centre, Shikakai, Saponion Collection Centre, Gum Collection Centre, Gum Refinement Unit, Tamrind Seed Extraction Unit.

28. Eligibility Individuals Groups of farmers / growers / consumers
Partnerships / Proprietary Firms / Companies / corporations
Non-governmental organisations
Cooperatives, Cooperative marketing federations
Local bodies
APMCs
Marketing boards

29. Eligibility
State Agencies where projects for strengthening / modernization of existing marketing infrastructure are bank-assisted (incl. Projects co-financed / refinanced by NABARD)

30. Land and Location
Any Place of choice determined on the basis of economic viability and commercial considerations
Project should provide “direct” service delivery to producers in post-harvest management / marketing of the produce
Land Cost – Restricted to 10% (Rural ) / 20% (urban) of project cost – part of promoter’s contribution
Land not to be alienated during loan period for any other purpose

31. The Financial Assistance
Would be credit linked and subject to sanction of project by commercial banks / cooperative banks / RRBs
Would be on only capital cost of the project
Financing institutions however are free to finance other activities, working capital requirements

32. Subsidy 25% of cost subject to a max Rs 50 Lakh
33.33% of cost subject to a max Rs 60 Lakh in Hilly areas and to those belonging to SC/ST and their co-operatives
No upper ceiling for projects of state agencies
Assistance availed from any other scheme shall be deducted

33. Release of Subsidy
NABARD – for projects financed by Banks and other institutions eligible for refinance from NABARD
NCDC – for projects financed by NCDC and coop banks recognised by NCDC
Implemented by Directorate of Marketing & Inspection, Ministry of Agriculture (DMI)

34. Rest of the project cost Rest of the project cost
Funding Pattern
Rest of the project cost
Rest of the project cost
Owner’s Contribution
Min 46.67%
Min 50%
Institutional loan from banks, etc
33.33%
25%
Subsidy from Central Govt.
NE States, hilly and tribal areas / SC & ST entrepreneurs & their co-operatives
Other than NE states, hilly and tribal areas
Source of Finance

35. Mode of Release of Subsidy
50% of eligible subsidy will be released to the participating bank in advance by NABARD on receipt of project profile-cum-claim form
Remaining 50% on completion of the project and after inspection by a committee comprising of NABARD, participating bank and DMI
For the project with project cost upto Rs 10 lakh one time subsidy shall be sanctioned based on the financing banks inspection report. No JMC for these projects.

36. Repayment & Completion
Repayment Period – 11 years incl. 2 year grace
ROI – PLR of the bank as per RBI guidelines
Time Limit for completion – 18 months from the date of disbursement of first installment of loan
Additional grace period 06 months may be allowed, by the financial institution, if reasons are justified

37. Repayment & Completion
For large integrated projects involving TFO of Rs 2.00 crore or more and requiring phasing, time limit of 36 months may be prescribed
In case project is not completed within stipulated period, benefit of subsidy will not be available and advance subsidy released will have to be refunded forthwith

38. Other Requirements
Banks to adhere to their own norms for appraisal of project, credit risk, etc.
Banks to create awareness among branches for implementing the scheme.
Subsidy claim to NABARD to be preferred only as per prescribed Format
SLBC/DCC/BLBC to review progress
Before recommending, controlling offices to scrutinize the project for eligibility and ensure enclosing all required documents/ details.

39. Progress under the scheme ( As on 31.1.2009)
No of schemes sanctioned :12
Total eligible subsidy : Rs lakh
Released : Rs 9.34 lakh
Main purposes : Drying Yards, Weigh Bridges and Combine harvesters

40. For further details Log on to www.agmarknet.nic.in Or
Contact Directorate of Marketing and Inspection (DMI), Bangalore (Tel : ) Or
NABARD, Karnataka Regional Office, Bangalore (Tel : ) Or
National Institute of Agricultural Marketing (NIAM), Jaipur (Tel : / )