The scheme aims at development of modern infrastructure and common facilities to encourage group of entrepreneurs to set up food processing units based on cluster approach by linking groups of producers/ farmers to the processors and markets through well-equipped supply chain with modern infrastructure. Each agro processing clusters under the scheme have two basic components i.e. Basic Enabling Infrastructure (roads, water supply, power supply, drainage, ETP etc.), Core Infrastructure/ Common facilities (ware houses, cold storages, IQF, tetra pack, sorting, grading etc) and at least 5 food processing units with a minimum investment of Rs. 25 crore. The units are set up simultaneous along with creation of common infrastructure. At least 10 acres of land is required to be arranged either by purchase or on lease for at least 50 years for setting up of Agro Processing Cluster. To view Indicative list of identified agri-horti production clusters (fruits & vegetables) and visit Geo-Sampada on spread & depth of agri-resources.

Agro processing clusters set up by Project Execution Agency (PEA)/ Organisation such as Govt./ PSUs/ Joint Ventures/ NGOs/ Cooperatives/ SHGs/ FPOs/ Private Sector/ individuals etc. and are eligible for financial assistance subject to terms and conditions under the scheme guidelines.

The Project Execution Agency (PEA) which is responsible for overall implementation of the projects undertakes various activities including formulation of the Detailed Project Report (DPR), procurement/ purchase of land, arranging finance, creating infrastructure, ensuring external infrastructure linkages for the project etc. PEA may sell/ lease plots in agro-processing cluster to other food processing units but the common facilities in the cluster cannot be sold or leased out.

Components of the Scheme:

The scheme will have following components:

(i) Basic enabling infrastructure: It will include site development including development of industrial plots, boundary wall, roads, drainage, water supply, electricity supply including power backup, effluent treatment plant, parking bay, weigh bridges, common office space etc. However, the cost of basic enabling infrastructure not exceeding 40 percent of the eligible project cost would be eligible for grant purpose. The cost of any basic enabling infrastructure outside the boundary wall of the agro cluster will not be eligible for grant assistance.

(ii) Core infrastructure: The common facilities will be based on the needs of the units which will be set up in these clusters. The common facilities of capital intensive nature may include food testing laboratory, cleaning, grading, sorting and packing facilities, steam generation boilers, dry warehouse, cold storage, pre-cooling chambers, ripening chambers, IQF, specialized packaging, other common processing facilities, etc.

The above mentioned facilities are only illustrative and the exact nature of facilities may vary from project to project based on requirements of the units in the cluster and availability of agriculture / horticulture produce in the catchment area of the project.

• The Scheme envisages grants-in-aid @ 35% of eligible project cost in general areas and @50% of eligible project cost in the North East States including Sikkim and difficult areas namely Himalayan States (i.e. Himachal Pradesh, Jammu & Kashmir and Uttarakhand), State notified ITDP areas & Islands subject to max. of Rs. 10.00 crore per project.
• The grants-in-aid is credit linked but not back-ended.

Release of Grant

• First instalment of 35% of the total approved grant is released to the PEA after incurring an expenditure of 35% of the bank term loan and 35% promoters contribution/ equity;

• Second instalment of 40% of the total approved grant is released after incurring an expenditure of 75% of the bank term loan and 75% of promoters’ contribution / equity;

• Third & final instalment of 25% of the approved is on completion of the project and submission of requisite documents.

Govt. Departments / PSUs / Joint Ventures / NGOs / Cooperatives / Self Help Groups (SHGs) / Farmer Producer Organizations (FPOs) / Private Sector Companies / Partnership Firms / Proprietorship Firms etc. can be Project Execution Agency (PEA) who will be eligible for financial assistance under the scheme.

Govt. of India has decided to earmark funds for extending benefit of the scheme to SC & ST. Therefore, subject to meeting the basic eligibility criteria, SC / ST beneficiaries will be given preference in sanction of the projects under the scheme to the extent of earmarked fund allocation for each category.