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ASIAN DEVELOPMENT BANK (ADB)

Assisted

Agribusiness Infrastructure Development Investment Program

(AIDIP)

Maharashtra State Agricultural Marketing Board

Project Management Unit (PMU), Pune

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The Contribution of agriculture to national gross product (GDP) - 15.7 %

58% of the work force continues to relay on agriculture for both income and livelihood.

Contribution of horticulture in agricultural GDP - 28%

India accounts for 9% to 11% of global FF&V production.

In total agriculture exports share of high value horticulture crops (HVCs) - 37%

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Agricultural Background

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Agricultural Background

Out of total production of fruits, vegetables only 6% is traded across its border.

Opportunity to increase export of High Value fruits & vegetables.

Government of India’s 11th Five Year Plan 4% growth rate in agriculture sector. Priority for agricultural growth. Various activities from Government of India for

development of Agricultural Marketing on PPP basis

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Why AIDIP Project?

To overcome the following major constraint in

agricultural marketing:

Outdated technologies within agricultural value chains.

Lack of private investment in basic infrastructure for market site development.

Lack of agri-marketing and value addition infrastructure.

Distorting trade policy regime.

Poor transport infrastructure.

Lack of modern logistics for aggregating products.

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Objectives of the Project

Establishment of IVCs for overcoming constraints in agricultural marketing.

Post harvest management.

To increase basic utilities such as power supply linkages, water connections, roads to markets.

To attract private sector investment for infrastructure development.

Market Intelligence.

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Objectives of the Project

Farmers Capacity Building

To ensure better returns to the farmers.

To provide better value for money to the end consumer in terms of quality and self life of the produce.

Reduce wastage of produce at each level of value chain by creating an efficient and competitive marketing infrastructure.

Strengthening of existing facilities with physical and institutional development along with value chains.

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Hub-Spoke Model

Use of the concept of hub and spoke model for value chains.

Business point of view hubs at the center of production area.

Spokes at the central point as a collection centres.

Mobile collection centres around 30-35 km. from the spokes.

Basic infrastructures at hubs for the agricultural commodity available from spokes.

Development of basic infrastructure like logistic development, roads, power, water, etc. from Governments line departments is expected.

For domestic and export of agricultural produce from hub and spokes development of cargo and other basic infrastructure at railway stations and airports are expected.

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Establishment of Integrated Value Chain (IVC)

As a pilot project in developed area Nasik IVC and comparatively under development area Aurangabad-Amravati IVC will be established on PPP basis on hub-spoke model.

In Maharashtra’s rest of the area 15-20 IVCs will be established in next 7-8 years.

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Objectives of IVCs:

To provide agricultural infrastructures at various places

considering basic (commercial, economical and technical services) needs of farmers, traders, exporters and entrepreneurs.

To develop competitiveness in agricultural marketing in the state.

Value addition for perishable crops.

Modern storage and distribution facilities.

To improve farmers economic standard by providing them more returns to their produce.

Crop diversification in the state.

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Infrastructure and Facilities to be created under Integrated Value Chain (IVC) at Hub

and Spokes

Infrastructure o Pack house o Washing & Cleaning

facility o Grading Lines o Godowns o Ripening Chambers o Cold Storage o Pre cooling

Facilities o Knowledge

Centre o Business Centre o Guest house o Internal Road o Electricity o Water Supply o Solid Waste

Management o Garden o Canteen o Vehicle Parking

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Crops Included in the Project

Fruits Vegetables Spice crops Other

Banana, Pomegranate,

Grapes, Mango,

Orange, Sweet lime,

Lemon, Papaya.

Tomato,

Brinjal,

Carrot,

Potato.

Onion,

Ginger,

Chilli

Maize,

Pulses

Fruits & vegetables 80%.

Other crops 20%.

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Land availability

Item Maharashtra State

Land for Project

Land should be provided by State Government, APMC/ Cooperative Soc. Kharedi-Vikri Sangh etc.

Ratio of Capital Investment

Investor – Minimum 60%

Asian Development Bank - 32 %

State Government - 8 %

Revenue sharing

The concession period will be 20 years.

Government organizations has to be given their land to MSAMB on

lease and then it will be included in the project.

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Farmers / Producers Chain

Capacity building activities for farmer groups to learn to work together as “producer enterprises” according to sound principles of Value Chain Management.

Revolving funds for farmers groups as a means of financing common use services and facilities built under IVCs, a grant from JFPR. Funds

Approx. 20,000 farmers will be trained under IVC.

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Nasik

Jalgaon Ahmednagar

districts

Grapes, banana, onion, pomegranate, tomato,

other crops

Hub- Pimpalgaon Baswant Spoke – Sinner, Devla, Chandwad,

Sangamner, Pachora(Kajgaon), Chopada(Galangi), Yawal (Padalsa) &

Bodwad (Anturli) Mobile collection centres within 30 to 35 km

Nasik Integrated Value Chain

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Facilities and Infrastructure in Nasik Integrated Value Chain (IVC)

Centre Facilities

Pimpalgaon, Warehouse, cold storages, grapes & pomogranate pack house (Cold Chain), ripening chambers, pack-shed (Ambient), onion storage.

Sinner grapes & pomogranate pack house (Cold Chain), pack-shed (Ambient), Onion storage

Devla Warehouse, grapes & pomogranate pack house (Cold Chain)

Chandwad pack-shed (Ambient), Onion storage

Sangamneer grapes & pomogranate pack house (Cold Chain) , pack-shed (Ambient), onion storage.

Padalsa, Galangi, Kajgaon, Anturli

banana pack house, ripening chambers,

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Jalna Aurangabad

Amravati Akola

Buldhana

Citrus, orange, banana,

kesar mango, and pulses

Spoke - Paithan, Varud, Anjangaon, Akola, Sangrampur & Jalna

Mobile collection centres within 30 to 35 km.

Aurangabad-Amravati Integrated Value Chain

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Facilities and Infrastructure in Aurangabad-Amravati Integrated Value Chain (IVC)

Centre Facilities

Paithan Mango Pack-house (Cold chain), mango pack-house (Ambient) orange pack-house (Ambient), godown

Jalna Orange pack-house (Ambient), Varud, Anjangaon

Varud Sweet lime pack-house, godown

Anjangaon Banana pack-house, ripening chambers, sweet lime pack-house, godown

Akola Godown, pack shedü

Sangrampur Banana pack-house, ripening chamber, godown

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Project Management and Project

Implementation

A National Steering Committee (NSC) will be established at central level chaired by the Secretary of the Ministry of Agriculture (MOA) with the following as members: representatives of the Department of Economic Affairs (DEA) of Ministry of Finance (MOF)

Roles and Responsibilities -

1. Ensure planning and policy standardization across the program.

2. Review the facility performance.

3. Facilitate Central Government clearances, as required.

4. Disseminate lessons learned to the other states.

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Project Management and Project Implementation

Executive Agency – Cooperative and Marketing Department, Maharashtra State.

The EA will facilitate the establishment at State level of an Empowered Committee on Agricultural Marketing (ECAM), chaired by the Principal Secretary (Cooperation and Marketing) in Maharashtra.

Implementing Agency- Maharashtra State Agricultural Marketing Board.

Maharashtra State Agricultural Marketing Board will establish an independent Program Management Unit (PMU)

Project Management Unit will work with the help of “Project Management Agency”.

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State level Steering Committee for Agricultural Marketing

Principal Secretary

(Co op. & Mkt.) Chairman

Representative

Planning Dept.

GOM

Representative

Finance Dept.

GOM

Representative

DEA( MOF)

GOI

Representative

Industries Dept.

GOM

Representative

MOA

GOI

Commissioner

(Agriculture)

Managing Director

MSAMB

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Project Management Agency

Project Management Agency (PMA) will help Project Management Unit and appoint advisor on contract basis for other works.

Project Management Agency (PMA) will look after integrated value chain implementation work.

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Financial Structure

Asian Development Bank to State Government - Rs. 400 crore

($ 85 million) Loan .

Investment of State Government Rs.94 crores.

Funds will be available from ADB in multi tranches.

Loan available under this project to State Government will be provided as a subsidy to this project.

Private Investors 600 crores.

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Financing Plan

Source Total (million $)

Total

(Rs. in crores)

Investment %

Asian Development Bank

85 400 81 %

State Government

21 94 19 %

Total 106 494 100 %

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Cost estimate for IVC Investment Program Particulars Rs. in Crore %

A. Base Cost

1. IVC Infrastructure

o Basic and Agribusiness Infrastructure 328 82

o Linking of Infrastructure 33 8.2

o Producers linkages 9 2.2

o IVC capacity building 12 2.8

2. Institutional Development & Program Management 19 4.8

Subtotal (A) 400 100 %

B. Contingencies 80

C. Financing Charges During Implementation 14

Total(A+B+C) 494

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Indicative Financing Plan per Tranche (Rs. in crore)

Source Tranche (1) Tranche (2)

Total %

Government 33 61 94 19

Asian Development Bank

127 273 400 81

Total 107 334 494 100

The project is expected to complete by year 2017

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Japanese Fund for Poverty Reduction (JFPR)

For first two IVCs small and marginal fruits & vegetables grower farmers including women, schedule tribe and schedule cast farmers groups will be formed.

Atleast 20,000 farmers will be trained in first 2 IVCs .

100 farmers groups will be formed among 20,000 farmers.

From farmers groups Producers companies will be establish and they will be trained for business and technology.

Producers companies can directly do agreements with whole sellers, exporters and food processors.

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Japanese Fund for Poverty Reduction (JFPR)

Establishment of Grant Implementation Unit (GIU).

Implementation unit will prepare project report for management & maintenance of these grant.

Implementation Unit :

1. Head of the unit

2. Evaluation & Finance Officer.

3. Full time project implementation experts.

4. Part time training specialists (12 professional trainers per month)

5. NGOs, Consultant and Private Investors will be included in this project

6. Project Execution Agency (EA) and Grant Implementation Unit (GIU) will decide work procedure.

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Advantages of Project

1. Agribusiness market infrastructure, support infrastructure like; last mile roads, power, water, systems relating to market intelligence and capacity building will be establish through 20 Integrated value chains.

2. Basic agriculture infrastructure development will help to improve quality of perishable crops which increase the demand and it helps fruits & vegetable growers for fetch better returns.

3. Ensure better value to agriculture produce of farmers and as a producer companies they can make directly agreements with wholesalers, exporters and food processing companies.

4. It will promote for cultivation of High Value Crops (HVCs) and that will drive the socio-economic growth of rural India.

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Advantages of Project

5. As farmers will be trained by demonstration they will be technically sound and quality of their produce will be improved.

6. Because of development of basic infrastructure in agriculture marketing consumer will get fresh and hygienic agricultural produce.

7. There will be scope for development of processing industries around the IVCs.

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Advantages of Project to the Cooperative

Societies

Organization those who will provide 10 acre land hubs will be establish on that land. ü

Organization those who will provide 2-3 acre land spokes will be establish on that land.

Private entrepreneur will invest for agricultural basic infrastructure on that land.

Facility will be transferred to land owner organization after 20 years as per depreciated value.

Farmers within area will be benefited.

Priority on first cum first basis.

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Thanks!