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INTRODUCTION & OBJECTIVES The main objectives of the scheme include creation of scientific storage capacity with allied facilities in rural areas to meet the requirements of farmers for storing farm produce, processed farm produce, consumer articles and agricultural inputs; promotion of grading, standardization and quality control of agricultural produce to improve their marketability; prevention of distress sale immediately after harvest, promotion of pledge financing and marketing credit and to strengthen agricultural marketing infrastructure in the country for the introduction of a national system of warehouse receipts in respect of agricultural commodities stored in such godowns. However, the materials used and design of the godown would depend upon the produce proposed to be sto red. 2. SALIENT FEATURES: Eligible Organisations a) The project for construction of rural godowns can be taken up by individuals, farmers, group of farmers / Growers, Partnership / Proprietary firms, Non-Government Organisations (NGO s), Self Help Groups (SHGs), Companies, Corporations, Co-operatives, Agro-Processing Co-operative Societies, Agricultural Produce Marketing committees, Marketing Boards and Agro Processing Corporations in the entire country, Assistance for renovation / expansion of rural godown will however, be restricted to the godowns constructed by cooperatives only. 3. LOCATION Under the scheme, the entrepreneur will be free to construct godown at any place and of any size as per his commercial judgement except for the restrictions that it would be outside the limits of Municipal Corporation area and be of a minimum capacity of 100 MT. 4. CREDIT LINKED ASSISTANCE Subsidy under the scheme is linked to institutional credit and will be available to only such projects as are financed by commercial banks, cooperative banks, regional rural banks, ADFCs, Scheduled PCBs, NEDFI and other institutions eligible for refinance from NABARD. Loan to the entrepreneur s from banks for the construction / renovation / expansion of godowns etc. would carry an adequate long-term repayment period. Assistance under the scheme shall be available on capital cost of construction of godown only. Banks will, however, be free to finance, in addition to storage, allied facilities like consumer shop,Agriclinics, weighing, grading, packaging and qualitycertification, warehousing etc. to meet various requirements of the farmers.
8 MT per sq. agri-graduates. v) Capital cost of the project for the purpose of release of subsidy under the scheme shall be calculated as follows: a) For godowns upto 1000 tonnes capacity ± actual cost or Rs.000 MT and further to a maximum amount of Rs. N-E states and hilly areas and for entrepreneurs belonging to SC/ST. ADFCs. vi) Amount of subsidy calculated as above shall be further restricted to a maximum storage capacity of 10. ii) 15% in case of individuals. There will. c) For renovation / expansion of godowns constructed by cooperative with the assistance from NCDC ± actual cost or Rs. NABARD would release subsidy to the participating banks in advance for . however.A general awareness programme on the scheme for the farmers and a training programme for the entrepreneur for construction.2000 /. 6.50 lakhs for each project. i) 50% of the subsidy amount will be released to NABARD by DAC in advance.50 lakhs for each project.50 meters.37. maintenance and operation of Rural godown will be organised by the National Institute for Agricultural Marketing. (B) Subsidy will be released in two instalments.per tonne of storage capacity. co-operatives. hilly areas and in cases where the entrepreneur belongs to SC/ST. NEDFI and other institutions eligible for refinance from NABARD and through NCDC for projects financed by the NCDC. Companies & Corporations.per tonne of storage capacity. Central/State Ware Housing Corporations. of floor area with an average height of not less than 4. vii) Subsidy for the projects under the scheme shall be released through NABARD for projects financed by the commercial.33% In case of North-Eastern States.mt. whichever is lower. viii) The capacity of godown shall be calculated @ of 1. cooperative and Regional Rural Banks.1500/.500 per tonne of storage capacity whichever is lower. Jaipur (NIAM) and also be eligible under the scheme for assistance. Scheduled PCBs. In the case of. Accordingly. whichever is lower. maximum amount of subsidy shall be Rs. iii) 33. iv) Minimum size of the godown eligible for subsidy would be 100 MTs. SUBSIDY Subsidy under the scheme shall be provided on the capital cost of the project and the rate of subsidy shall be as follows: i) 25% of the capital cost of the project where the beneficiaries are farmers. b) For godowns exceeding 1000 tonnes capacity ± actual cost of Rs. be no such ceiling in respect of renovation / expansion of godowns already constructed by the cooperatives with assistance from NCDC.
PATTERN OF ASSISTANCE: (SINCE OCT 2004) (HO BC 99/40) Other than Individuals. to be adjusted finally against loan amount of the bank on completion of the project. Banks etc. and Co-operatives where they . State Co-operative Agricultural and Rural Development Bank (SCARDBs). NCDC will follow their existing pattern of assistance. Ii) Scheduled Primary Urban Cooperative Banks (PUCBS). and such other institutions which will be eligible for refinance from NABARD.keeping the same in the Subsidy Reserve Fund Account of the concerned Borrower. In Northnorth Companies and eastern easternStates & Corporations in states hilly areas areas other than NE &Hilly States/Hilly areas areas *And for SC/ST 25% 25% 20% 15% 65% 33. ii) The remaining 50% of the subsidy amount would be disbursed to the participating bank(s) by NABARD. Regional Rural banks (RRBs). State Cooperative Banks (SCBs). INSTITUTIONAL LENDING a) ELIGIBLE FINANCING INSTITUTIONS The eligible financing institutions under the scheme are I) Commercial Banks. ** Cost of land not exceeding 10% of the project cost can form part of the owner¶s contribution. participating banks(s) and DMI in the concerned State. * Where the project site is located at a height of more than 1000 meters above mean sea level. This amount of 50% advance subsidy would be released by NABARD to the participating banks on submission of a project profile cum claim form. North Eastern Development Finance Corporation (NEDFI). after conduct of an inspection by the Inspection Committee consisting of Officials from NABARD. Agricultural Development Fianance Companies (ADFCs).33% 46.67% i)**Owner¶s Contribution ii) Subsidy from 25% the Govt. iii) Institutional 50% loan from Commercial / coop.
seek loan from NCDC. However. NABARD will forward a copy of claim form as indicated in annexure I to Head Office of DMI project-wise for replenishment or adjustment against advance subsidy . The first annual installment will fall due after 23 months from the date of first disbursement. This is applicable form the date for the first disbursement of loan. ii) Repayment period will depend upon the cash flow and will be upto 11 years including a grace period of one year. As the subsidy is backended. TIME LIMIT FOR COMPLETION: A time limit of 15 months is prescribed for completion of the project from the date of sanction by bank. b) TERM LOAN i) 50% of the project can be raised as term loan from the financing banks. If the project is not completed within stipulated period. c) NABARD on receipt of project profile cum claim form from participating bank will sanction and release 50% advance subsidy to the participating bank for keeping the same in the Subsidy Reserve Fund Account (Borrower wise). if reasons for delay are justified. PROJECTS FINANCED THROUGH BANKS a) Interested promoter will submit the project proposal for term loan and subsidy to Bank on application form as prescribed by the concerned Bank along with project report and other documents for appraisal and sanction of loan. eligible amount of the subsidy (25%) would be initially allowed as term loan to the beneficiary. iv) The financial institution may also provide working capital separately for undertaking business by entrepreneurs. a further grace period of 3 months may be allowed by the participating bank. PROCEDURE TO BE FOLLOWED FOR SANCTIONING OF PROJECT AND RELEASE OF SUBSIDY. The repayment schedule will be drawn on the total loan amount (including subsidy) in such a way that the subsidy amount is adjusted after liquidation of net bank loan (excluding subsidy). 10. the benefit of subsidy shall not be available and advance subsidy has to be refunded forthwith. A copy of the proposal shall also be endorsed by the promoter to sub office / regional officer of DMI as per list enclosed at annexure VI. NABARD with a copy to the sub office / regional office of DMI as per list enclosed at annexure VI. b) Bank after appraisal and sanctioning of project will furnish a brief project profile-cum-claim form for advance subsidy in the prescribed format given at Annexure-I along with a copy of bank s sanction letter to RO. 9. iii) Rate of interest to borrowers on term loan shall be as per RBI guidelines.
The release of subsidy by NABARD will be subject to availability of funds from DMI. with a copy to Regional office / sub-office. NABARD and DMI to ensure that the rural godown conforms to technical & financial parameters. In case NHRDF official is not available. e) In case of Onion Godowns.provided by DMI to NABARD. the promoter will inform the bank who will initiate action for an inspection by the Inspection Committee consisting of officials from bank. which will be replenished by DMI or adjusted against the subsidy amount provided to NABARD in advance. The inspection report of committee and completion certificate should be enclosed with claim form for final subsidy to banks. NHB has advised that the Joint Monitoring Committee (JMC) for release of subsidy to onion godowns may consist a representative from National Horticulture Research and Development Federation (NHRDF). DMI. d) When the project is nearing completion. the bank will submit the claim form for final subsidy in the prescribed format given in annexure II to NABARD. After inspection is conducted. in triplicate. one representative from concerned State Horticulture/Agriculture Department may be co-opted in addition to the representative of NHB from the concerned State in the JMC .
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