Newspaper Advt.

Maharashtra State Agricultural Marketing Board (MSAMB)

Website: www.msamb.com Email: projectadb@msamb.com
Tel: 020-24528100/ 24528200
EXPRESSION OF INTEREST (EOI)
Preliminary Screening of Potential Participating Financial Institutions for
Financial Intermediation Loan Facility of MAGNET Project, Maharashtra.
MSAMB invites proposals from Financial Institutions (FIs) for initial screening and short
listing of potential participants for the implementation of Financial Intermediation Loan
(FIL) Facility under Asian Development Bank (ADB) funded Maharashtra Agribusiness
Network (MAGNET) Project to be implemented in the State of Maharashtra.
The interested Financial Institutions may submit Expression of Interest through email and
may obtain further information about the services and procedure for submission of the
EOI etc. at www.msamb.com.
Managing Director
 Maharashtra State Agricultural Marketing Board
R-7, Market Yard, Gultekadi, Pune 411 037.
Maharashtra, India
020 24528100, 24528200
Email: projectadb@msamb.com

EXPRESSION OF INTEREST (EOI)

FOR
PRELIMINARY SCREENING OF POTENTIAL PARTICIPATING FINANCIAL
INSTITUTIONS FOR FINANCIAL INTERMEDIATION LOAN FACILITY
OF MAGNET PROJECT, MAHARASHTRA

EOI SCHEDULE

Issue of EOI 18 July 2020

Last Date & Time of Submission of EOI 31 July 2020; up to 5.00 PM
Pre-EOI Submission E-Meeting* 24 July 2020 at 11.00 AM
FI shortlisted for formal due diligence and final 7 August 2020
selection
*Interested Financial Institutions are requested to join the Pre-EOI Submission E-Meeting for
addressing of any queries.
 PRELIMINARY SCREENING OF POTENTIAL PARTICIPATING FINANCIAL
INSTITUTIONS FOR FINANCIAL INTERMEDIATION LOAN FACILITY OF MAGNET
PROJECT

Maharashtra State Agriculture Marketing Board (MSAMB) invites proposals from Financial
Institutions (FIs) for initial screening and short listing of potential participants for the
implementation of Financial Intermediation Loan Facility under ADB funded Maharashtra
Agribusiness Network (MAGNET) Project to be implemented in the State of Maharashtra. The
willing Financial Institutions may submit their proposals through email with all details
mentioned in this EOI.

This EOI is not an agreement and is neither an offer nor invitation by the MSAMB to the
prospective FIs or any other person. The purpose of this EOI is to provide interested parties
with information that may be useful to them in submitting their intent/interest pursuant to this
EOI.
The issue of this EOI does not imply that the MSAMB is bound to select a FI for the Project
and that the MSAMB reserves the right to reject all or any of the proposals without assigning
any reason whatsoever.

This EOI does not commit MSAMB to pay any costs incurred in the preparation and
submission of proposals or in making necessary studies for the preparation thereof. Each
proposal shall be prepared simply and economically, avoiding the use of elaborate promotional
materials beyond what is sufficient to provide a complete, accurate, and reliable presentation.
For ease of review, the proposals must follow the outline in Annexure I and II of this EOI. Each
response should be clearly numbered and address the full question listed. Each page of the
proposal must be sequentially numbered.

For any further details, undersigned may be contacted.

(Sunil Pawer)
Managing Director
Ph:020 – 24528100/200
Email: projectadb@msamb.com

Date: 18 July 2020

Place: Maharashtra State Agricultural Marketing Board

R-7, Market Yard, Gultekadi, Pune 411 037
Maharashtra, India.
1. Background

1.1. Introduction
In line with the MAGNET project’s objective to address the challenges faced by Farmer
Producer Organizations (FPOs) and even many other value chain operators (like
processors, exporters, start-ups and Ag-tech organizations) in accessing credit, a
Financial Intermediation Loan (FIL) facility of up to 80 Mn USD is proposed in the
project, to be operated under MAGNET project. It is envisaged that the proposed FIL
will be extended to participating financial institutions to further on-lend to targeted and
eligible sub-projects. It is also envisaged that since such FIL to participating FIs shall
be extended at a considerably lower rate, the FIs shall be able to on-lend at market
competitive rate to sub-projects. Two types of loans, largely Term Loan and Working
Capital Loan, shall be extended to eligible sub-projects from FIs. It is envisaged that
the term loan at competitive rates will lead to incentivizing FPOs and other value chain
operators in infusing their equity and the obtained debt to set up suitable projects
eligible under MAGNET. Similarly, working capital assistance shall enable the sub-
projects to optimally utilize their capacities and shall assist in meeting their operational
obligations more efficiently. The project also encourages offering of composite loans
as well as specially crafted/designed loans to suit the end beneficiaries. For more
details about MAGNET project and FIL component, applicants may kindly go through
enclosed Project’s Concept Paper Note as well as through ADB’s Operations Manual
for Financial Intermediation Loans by visiting the link as mentioned below:
https://www.adb.org/sites/default/files/institutional-document/31483/om-d6.pdf

1.2. Targeted and Eligible Sectors and Eligible Sub-projects for FIL
a. Eligible Sectors: Projects that facilitate value addition, preservation, marketing of one
or group of the following horticulture crops: Banana, Custard Apple, Green and Red
Chili, Guava, Okra, Orange, Pomegranate, Sapota, Strawberry and Sweet Lime
b. Eligible Organizations: Legally constituted Farmer Producer Organizations (FPOs),
Processors, Exporters, Agri Start-ups and Ag-Tech organizations
c. Capital Investments to be supported: Post-harvest processing facilities, Agri-Logistics
and other relevant capital investments as deemed fit for financing
d. Working Capital requirements to be supported: Inputs trading business, commercial
horticulture activities, Processing, Trade, including for exports, other productive and
operational purposes as deemed fit for financing.

Note: The program is limited to support sub-projects within the State of Maharashtra only.

2. Role of eligible Participating Financial Intermediaries (PFIs)

Under the proposed FIL facility, the project shall provide funds to eligible participating
financial intermediaries for on-lending, at the financial intermediary’s credit risk, to final
borrowers (sub-borrowers) for eligible subprojects. A “sub-project” is the sub-
borrower’s investment or economic activity, for which a sub-loan is provided. “Sub-
borrowers” are entities to which part of the proceeds under an FIL are on-lent by the
borrower or financial intermediary. Financial intermediaries’ on-lending rates for sub-
borrowers should be market-based and as per agreed upper and lower limit.

3. Evaluation: Proposals will be reviewed by MSAMB for completeness and scored and
ranked by an Evaluation Committee. The committee will evaluate proposals
qualitatively based on submissions in this EOI. All Applicants of Accepted Applications
 (shortlisted candidates) will receive a notification about the result of the Assessment
process.

4. Confidentiality: While evaluating the EOIs, MSAMB and the Evaluation Committee
respects the confidentiality of all and any sensitive information received from financial
intermediaries.

5. Due diligence: Accepted Applications will be subject to a due diligence process and
will be carried out in accordance with the ADB’s internal rules and procedures. The
aim of the due diligence is to evaluate and confirm the content of the Application as
well undertake a complete financial and institutional due diligence. This will also
comprise the assessment of the overall financial standing, operational performance,
and other criteria to accept/reject the applicant as a PFI.
6. Qualification Criteria for the EOI*

Sr. Parameter/Benchmark Banks NBFCs

No.
1 Minimum experience in
financing
agriculture/horticulture
value chain financing.
Experience of financing
FPOs will be an additional
advantage
2 Outreach in Maharashtra
3 Human resources
4 Capital adequacy
5 Credit history
6 Audit and Inspection
7 Regulatory/supervisory
compliances
(PSBs and PVBs)
3 years 2 years
Should have rural/ semi- Should have
urban presence in all the requisite
districts of Maharashtra infrastructure and
systems &
procedures in place
to service
rural/semi-urban
clientele in all the
districts of
Maharashtra
Should have adequate number of qualified
personnel to appraise the horticulture value-
chain projects.
Should adhere to the CRAR norms prescribed
by the RBI (or any other regulator) at all the
times
No defaults towards repayments of credit taken
from other financial institutions
There should not be any major adverse
observations on the functioning of the
institution in the Inspection Report of the RBI
(or any other regulator) and in the Statutory
Auditor’s report.
The institution should be adhering to all the
regulatory/supervisory requirements, as
envisaged under the law, at all the times

* Relevant supporting documents, certificates or undertakings as may be relevant

should be provided
 Annexure I: EOI Response Format

Remarks
(Kindly only share your remarks. No
supporting documents to your responses
A General Information need to be enclosed at this stage)
1 Type of FI
2 Name of Organization
3 Registration with RBI
4 Founded on (date)
5 Key People
6 Details of Head Quarters
7 Products/Services Offered
If Listed on any exchange
8 (provide details)
9 Revenue
10 Operating Income
11 Total Assets
12 Number of Employees
13 Website
14 Brief Profile
External Rating of debt
instruments
15 (CARE/CRISIL/Other)

Agriculture and Allied

Business Lending (Kindly
B share details of)
1 Gross Bank Credit
2 Total Priority Sector
3 Agriculture & Allied Activities
Micro & Small Enterprises
4 (Manufacturing and Services)
5 Export Credit
6 Brief Profile - Financial Inclusion

FPO Lending
(Kindly share details for country
wide operations and that
C Maharashtra State Separately)
1 Activities Supported
2 Gross Credit extended to FPOs
3 Number of FPOs
4 Products Offered
Details of any special FPO
5 products offered
Average Loan Size- Term
6 Loan/Long Term Credit
 Average Loan Size- Working
7 Capital/Short Term Credit
Rate of interest offered (Range
8 and Average)
Tenures offered (Range and
9 Average)
Moratorium offered for capital
investments (Range and
10 Average)
Flexibility/Incentives offered in
terms w.r.t. flexible tenures,
11 lower processing fee, etc.
Number of FPOs that have
collateral free credit (applications
under any credit guarantee
13 schemes)
Average Turnaround Time in
approving/rejecting loan
14 applications
Details of NPAs
15 (Number/Percentage)
16 Key challenges faced

Lending to Agri/Food
Processors, Exporters, Start-
ups and Ag-Tech Cos.
(Kindly share details for country
wide operations and that
D Maharashtra State Separately)
1 Activities Supported
2 Gross Credit extended
Number of
companies/units/entrepreneurs
3 supported
4 Products Offered
Products Offered to Exporters/to
5 facilitate exports
Details of any special products
6 offered
Average Loan Size- Term
7 Loan/Long Term Credit
Average Loan Size- Working
8 Capital/Short Term Credit
Rate of interest offered (Range
9 and Average)
Tenures offered (Range and
10 Average)
Moratorium offered for capital
investments (Range and
11 Average)
Flexibility/Incentives offered in
terms w.r.t. flexible tenures,
12 lower processing fee, etc.
 Average Turnaround Time in
approving/rejecting loan
13 applications
Details of NPAs
14 (Number/Percentage)
15 Key challenges faced

E Network in Maharashtra
1 Total no. of branches
2 No. of rural branches
3 No. of semi-urban branches
Do the regional offices have
enough autonomy to take
4 lending decisions?

F Digital Services
Details of Digital Services
1 offered to borrowers
Other Technology aspects useful
2 to borrowers

G Awards and recognitions

In last 5 years - w.r.t. Agricultural
Banking/Priority Sector
1 Lending/SME Lending/other
2 Rural/Social Development

Experience of similar projects

H (if any)
Does the FI have experience in
implementing projects of any
other donors, co-financiers, or
1 development partners?
If Yes, kindly share details in
terms of fund handled,
2 beneficiaries, impact, etc.?
Environment and Social
I Management Systems
Does the FI has any
environmental and Social
1 Management System policies?
If yes kindly share the details of
2 the same.
 Annexure II: List of Documents
List of Documents (along with EOI Response-Annexure I) to be submitted for pre-
screening:
1. Covering Letter and proposal: The covering letter transmitting the proposal must be
executed by a responsible authorized official of the FI. Interested FIs are informed
herewith that this EOI is the initial pre-screening process for the project’s implementing
body to understand which FIs could be best potential PFIs for the implementation of
FIL facility. Interested FIs are expected to be creative in their proposals, addressing
and suggesting the best manner in which the current challenge of inadequate credit
access to FPOs in the eligible sectors can be addressed through their participation in
the FIL program of MAGNET. The proposal may also suggest ways in which FI would
extend suitable sub-loan products under FIL to private players like processors,
exporters, start-ups and Ag-tech organizations that will enable a rapid and positive
paradigm shift in value addition, trade, exports, improvement in quality, etc. Focus
could also be given on several other relevant impacts and outcomes like increased
sustainability and profitability in activities undertaken by sub-borrowers like commercial
horticulture, value addition, preservation and better marketing initiatives.
Since the FIL facility of up to 80 USD is proposed in the project, FIs are requested to
suggest their demand for FIL fund. The covering letter should also include contact
details, designation, phone and email of the key contact/coordinator for this EOI.
2. Success Stories: FIs are encouraged to share 1-3 success stories (each of not more
than one page) of their funded FPOs operating in any of the identified eligible sectors
or in any other horticulture crops. FIs may also share 1-2 success stories (each of not
more than one page) of processors/exporters/start-ups/Ag-tech organizations handling
horticulture crops.
3. Brochures/Other literature: FIs are encouraged to share their brochures/other
literature (if any) with reference to Financial Inclusion initiatives undertaken to provide
greater credit access to farmers, FPOs and other similar borrowers. Such
brochure/literature should ideally not exceed 4-5 pages, and thus only most relevant
parts of the document can be shared.
4. Loan Terms: We are interested in understanding the FI’s willingness to consider
different interest rates, moratoriums, etc. for different size loans in targeted sectors.
We are also interested in understanding other loan terms the FI can offer in terms of
flexible repayment, processing fee, etc.
In this context, FIs to share appropriate response (in not more than 2 pages) to the
case study (considering the sub-borrower qualifies/complies with eligibility criteria of
MAGNET as well as that of your bank) below:
a. If the ADB’s FIL loan is provided to FI at a rate of ‘X%’, what is the rate at which
FI can on-lend to sub-borrowers? FI may kindly define range based on loan
size, borrower credit, security and other criteria.
b. What could be FIs offerings for eligible sub-projects w.r.t. tenures, moratorium,
etc. FI may kindly provide the upper and lower limits, as well as the rationale
behind same. For the purpose of appropriate response FI may take
assumptions with regards to size of investment, nature of technology,
implementation/gestation periods, etc. (and similarly for working capital loans).

5. Additional Statements and Materials: Please feel free to add additional statements,
ideas, and materials that demonstrate the FI’s understanding of the FIL goals and how
the FI could implement as a participating FI.
Note: Kindly do not share any other documents apart from those explicitly mentioned in
this EOI.
*****
Project Concept Paper

Project Number: 53264-001

December 2019

Proposed Loan
India: Maharashtra Agribusiness Network Project
 CURRENCY EQUIVALENTS
(as of 6 November 2019)

Currency unit – Indian rupee(₹)

₹1.00 = $0.014135
$1.00 = ₹70.745

ABBREVIATIONS

ADB – Asian Development Bank

FIL – financial intermediation loan
FPO – farmer producer organization
MSAMB – Maharashtra State Agriculture Marketing Board
TA – technical assistance

NOTES

(i) The fiscal year (FY) of the Government of India and its agencies ends on
31 March. “FY” before calendar years denotes the years in which the fiscal
year starts and ends, e.g., FY2016/17 starts on 1 April 2016 and ends on
31 March 2017.
(ii) In this report, "$" refers to United States dollars.
 Vice-President Shixin Chen, Operations 1
Director General Hun Kim, South Asia Department (SARD)
Director Mio Oka, Environment, Natural Resources and Agriculture Division,
SARD

Team leaders Masahiro Nishimura, Senior Rural Development Specialist, SARD

Michiko Katagami, Principal Natural Resources and Agriculture
Specialist, Sustainable Development and Climate Change
Department (SDCC)
Team members Mikael Anderson, Financial Management Specialist, SARD
Brando M. Angeles, Associate Environment Officer, SARD
Tushna Dora, Investment Specialist, Private Sector Operations
Department
Cynthia Pancracia Y. Ceniza, Senior Operations Assistant, SARD
Arup Kumar Chatterjee, Principal Finance Sector Specialist, SDCC
Rajilyn N. Dacumos, Operations Assistant, SARD
Dharmesh Mahendra Dawda, Procurement Specialist,
Procurement, Portfolio and Financial Management Department
Navendu Karan, Senior Public Management Economist, SARD
Sunae Kim, Natural Resources and Agriculture Specialist, SARD
Kang Hang Leung, Senior Finance Specialist, East Asia
Department
Raghavendra R. Naduvinamani, Project Analyst, SARD
Rebekah Ramsay, Social Development Specialist, SARD
Krishan Singh Rautela, Associate Project Officer (Infrastructure),
SARD
Vankina Sri Rekha, Principal Counsel, Office of General Counsel
Peer reviewer Takeshi Ueda, Principal Natural Resources and Agriculture
Economist, Southeast Asia Department

In preparing any country program or strategy, financing any project, or by making any designation
of or reference to a particular territory or geographic area in this document, the Asian
Development Bank does not intend to make any judgments as to the legal or other status of any
territory or area.
 CONTENTS

Page

PROJECT AT A GLANCE
PROBLEM TREE
I. THE PROJECT 1
A. Rationale 1
B. Proposed Solutions 3
C. Proposed Financing Plans and Modality 4
D. Implementation Arrangements 4
II. ATTACHED TECHNICAL ASSISTANCE 5
III. PROJECT PREPARATION AND READINESS 5
IV. DELIBERATIVE AND DECISION-MAKING ITEMS 5
A. Risk Categorization 5
B. Project Procurement Classification 5
C. Scope of Due Diligence 6
D. Processing Schedule and Sector Group’s Participation 6
E. Key Processing Issues and Mitigation Measures 6

APPENDIXES
1. Design and Monitoring Framework 7
2. Project Procurement Classification 10
3. Technical Assistance Facility Utilization Update 11
4. Initial Poverty and Social Analysis 14
PROJECT AT A GLANCE
 PROBLEM TREE

Rural people are not Farmers are not

Effects prosperous empowered and unhappy

Horticultural production in
Core Problem Maharashtra is below its potential and
unprofitable

Causes

Farmer producer Farmer producer

organizations are not organizations and value Agriculture value chain is
applying appropriate chain operators have incomplete and captured
technologies and best insufficient access to
practices financial resources

Farmer producer Farmer producer

organizations have organizations and value The value chain is
insufficient capacities to chain operators have dominated by middlemen
adopt appropriate insufficient collaterals and
technologies poor balance sheet

Government policies are Middlemen do not invest

insufficient to guide the
farmer producer
organizations to
implement best practices
Financial institutions do in infrastructure and rely
not take risks to provide
on conventional value
financing to farmers chain

Women are insufficiently Farmers do not have Existing value chain

involved in decision- sufficient incentives to facilities are energy
making against their invest and add more inefficient and prone to
share of the workforce value to their products disasters
 I. THE PROJECT

A. Rationale

1. Maharashtra economy. Maharashtra is the second largest state in India in terms of

population and ranks third by geographical area. The state is also the leading contributor to the
national gross domestic product accounting for 14.4% in FY2017/18 and demonstrated rapid
economic growth averaging 10.0% per year between FY2013/14 and FY2018/19 driven by
industrial and service sector outputs. However, the state is also ranked among the highest in the
income and development inequality as economic development is concentrated around major
cities and rural poverty is still prevailing. The average income per capita in the poorest district is
merely 25.6% of Mumbai, the district with the highest income.1 The poverty rate is 24.2% and gets
as high as 40% in poor districts, and 23 out of 36 districts have higher poverty rates than the
national average of 18%. About 53% of the state’s population depend on agriculture for their
livelihood and subsistence. About 80% of the farmers are marginal farmers with small
landholdings. 2 Increasing the income of marginal farmers impacts significantly on poverty
reduction of rural Maharashtra.

2. Horticulture subsector. India is the second largest producer of fruits and vegetables in
the world. The growth of horticulture crops production in India has outpaced the food grains
production since FY2012/13. Maharashtra is one of the largest producers of fruits and vegetables
in India.3 The demand for fruits and vegetables is expected to increase by 4%–7% annually during
2015–2025 driven by the increasing and diversifying demand from the urban population within
and outside Maharashtra.4 The area under fruit crops increased by 341% from FY1990/91 to
FY2017/18. This is the result of the national and state government’s various programs and
initiatives to promote horticulture development since the 1990s.5 The state government supported
horticultural production to improve the productivity of mainly rainfed cultivation land.6 Agricultural
productivity of fruits and vegetables, in terms of values per gross crop area, is almost 50% higher
than food grains.7 Also, horticulture production in Maharashtra is often accompanied by food
processing, which provides year-round employment opportunities, especially for women.

3. Fresh fruits and vegetables are highly perishable. Almost 40% of fruits and vegetables are
lost or wasted in different stages of the agriculture value chains, of which 60% of waste in India
happens between the farm and the end-consumer (footnote 4). The losses can be reduced by
proper post-harvest practices and agriculture value chain facility especially warehousing and cold
chain facilities.8 In particular, cold chain development is challenging due to high initial investment

1 State Government of Maharashtra, Directorate of Economics and Statistics. 2019. Economic Survey of Maharashtra
2018–2019. Mumbai.
2 Marginal farmers are defined as the farmers with the landholding size of less than or equal to 2 hectares. Some
documents call them marginal and small-holding farmers. The numbers are from footnote 1.
3 The state accounts for 11% of fruit and 5% of vegetable production.
4 McKinsey & Company. 2017. Harvesting Golden Opportunities in India Agriculture: from Food Security to Farmers’
Income Security by 2025. New York.
5 Such programs and initiatives include: Government of Maharashtra. 1996. State Agriculture Policy. Mumbai;
Government of India. National Horticulture Mission. 2004. New Delhi; Government of India, Ministry of Agriculture &
Farmer Welfare. 2014. Mission for Integrated Development of Horticulture. New Delhi; and Government of
Maharashtra. 2015. Maharashtra Agriculture Policy 2015. Mumbai.
6 Irrigation covers only 17.0% in Maharashtra (source: footnote 1).
7 In terms of value, while the share of food grain areas was 60%, its contribution to agricultural state domestic product
was only 25.5%. In contract, fruits and vegetables which accounted for only 5.6% of gross cropped area, accounted
for as much as 24.0% of agricultural state domestic product.
8 Cold chain maintains temperature of fruits and vegetables in a specific range required to keep them fresh, edible,
and safe for a longer period than in normal ambient conditions.
2

requirements for refrigerator units and land, lack of supporting infrastructure for power supply and
transport, and inadequate capacity in handling of perishable produce. Enhancing networks of
farmer producer organizations (FPOs) with storage and cold chain facilities can significantly
increase their business opportunities and contribute to food safety and security.

4. Farmers producer organizations. Despite ample opportunities for Maharashtra’s

horticulture growth that contributes to poverty reduction of farmers, they face challenges related
to the agricultural sector’s structural issues. While 80% of agriculture in rural Maharashtra is
operated by marginal farmers, they still largely practice subsistence farming and do not grow
produce to sell in the markets due to fragmented land ownership structure. Most do not have
direct access to emerging, lucrative, and high-value markets and rely on traditional marketing
channels, which often involve multiple layers of traders and preharvest contracts and offer no
price incentives or bargaining power to the farmers. The government included an ambitious target
of forming 10,000 new FPOs in the next 5 years in its FY2019/20 budget to help marginal farmers
to aggregate their products and increase their marketing power in the value chain. ADB assisted
in establishing and building capacity of 18 FPOs with 5,300 members through a grant project,
which also led to successful emergence of other FPOs.9 By the end of 2017, Maharashtra’s state
government was able to support the registration of 85 FPOs with more than 88,000 members and
operated several subsidy schemes for distribution of horticulture crops and plants, support price
of selected commodities, transportation charges, and value chain facility construction. However,
such movement is not expanded into many parts of rural Maharashtra. FPOs’ technical and
financial capacities in farming, post-harvest handling, and marketing of horticultural produce are
still limited, and a majority of the FPOs are dominated by men on decision making.

5. Government strategies. In 2017, the Government of India launched a strategy for

doubling farmers’ income by supporting agribusiness development as a vehicle to increase
farming incomes and integrate marginal farmers into an efficient food supply system. 10 The
Ministry of Agriculture and Farmers Welfare issued guidelines that laid out the central
government’s support schemes in agribusiness models, production and post-harvest
infrastructure, innovation and agri-enterprise development, income diversification, and promotion
of FPOs. The State Government of Maharashtra announced the Vision 2030 as a long-term plan
of the state.11 Vision 2030 recognized agriculture as the backbone of the state and the most
important component of the vision. The state aims to achieve an average growth rate for the
agriculture sector of above 5% per year through increasing productivity of crops by providing
quality inputs, investing in post-harvest technology for value-addition, promoting FPOs,
establishing value chain through public-private partnerships, extending credit lines, and promoting
direct marketing and alternative markets.

6. Lessons learned and ADB’s value-addition. The project will build on lessons learned
from previous ADB’s agriculture operations in Maharashtra.12 Major lessons from these projects
were (i) importance of planning infrastructure investment based on clear needs and priorities of
agribusiness investors by identifying the infrastructure gaps and focus crops; (ii) flexibility in
public–private partnerships (PPP) arrangements based on private players’ interests and business
needs which may change dynamically; (iii) needs to combine capacity building and infrastructure

9 ADB. 2010. Improving Small Farmers’ Access to Market in Bihar and Maharashtra (Grant 9147-IND). Manila.
10 Government of India. 2017. Doubling Farmers’ Income—Rationale, Strategy, Prospects and Action Plan. New Delhi.
11 State Government of Maharashtra, Planning Department. 2017. Vision 2030. Mumbai.
12 ADB. 2010. Multitranche Financing Facility for Agribusiness Infrastructure Development Investment Program (MFF

0045-IND). Manila; and ADB. 2010. Improving Small Farmers’ Access to Market in Bihar and Maharashtra (Grant
9147-IND). Manila.
 3

support for sustainable growth of FPOs; and (iv) effectiveness of working capital provision to
FPOs.13 These lessons will be considered in finalizing the project design. The project design will
also integrate the results of ADB’s pre-feasibility study, which identified local demand for
equipment and infrastructure for horticultural crops.14 The project will also ensure synergies of
outcomes with the ongoing ADB support on rural connectivity, which will enhance vital links
between farms and markets in Maharashtra.15

7. Alignment with government and ADB strategies. The project is aligned with (i) the state
government’s Vision 2030; (ii) ADB’s Strategy 2030 operational priorities on promoting rural
development and food security and accelerating progress in gender equality; and (iii) ADB’s
country partnership strategy.16 The project is included in the country operations business plan,
2020–2022 for India.17

B. Proposed Solutions

8. The project targets to support FPOs by improving a network of post-harvest marketing

and value chains focusing on the horticulture crops identified in the pre-feasibility study.18 The
project design reflects the lessons learned from the previous projects and comprises separate
components for public sector infrastructure development and private sector investment support.
ADB will add value through an integrated approach addressing capacity development, financial
support, and infrastructure development as follows.19
(i) Output 1: Capacity enhanced for value chain integration of FPOs. The project
will support institutionalization of scattered marginal farmers in rural areas and
preparation of sound business plans. The project will conduct capacity building and
agri-business advisory services to deliver (a) policy advice on post-harvest
handling and food processing; (b) crop-specific guidelines on harvest quality, post-
harvest handling, and relevant certification; (c) introduction of best practices to
enhance productivity, quality, and safety to meet the market/export requirements;
(d) support on FPOs’ business plan improvement and organizational/financial
management capacity enhancement particularly for FPOs led by women; (e)
training on the latest agriculture technologies on cultivation and agribusiness
marketing; and (f) leadership training and buyer-seller meets to enhance links and
supply arrangement between committed buyers and FPOs.
(ii) Output 2: Financial support provided for FPOs and value chain operators to
improve post-harvest practices. The project will provide financial support
needed for implementation of business plans of FPOs and value chain operators,
including post-harvest and processing facilities, working capital, and other financial

13 ADB. 2017. Completion Report: India, Agribusiness Infrastructure Development Investment Program (Tranche 2).
Manila.
14 ADB. 2015. Building Sustainable Food and Nutrition Security in Asia and the Pacific (Phase 1). Manila (TA 9054-

REG); and Deloitte Touche Tohmatsu India LLP. 2018. Final Report: Mapping Study on Agribusiness Industry &
Value Chain Players in the State Of Maharashtra. New Delhi.
15 ADB. 2019. Maharashtra Rural Connectivity Improvement Project. Manila (Loan 3805-IND).
16 ADB. 2018. Strategy 2030. Manila; and ADB. 2017. Country Partnership Strategy: India, 2018–2022—Accelerating

Inclusive Economic Transformation. Manila. The pillar 2 of the country partnership strategy highlighted inclusive
provision of infrastructure network and services to increase rural income.
17 ADB. 2019. Country Operations Business Plan: India, 2020–2022. Manila.
18 Identified target horticulture crops included: banana, custard apple, green and red chili, guava, okra, orange,

pomegranate, sapota, strawberry, and sweet lime.

19 Use of High-Level Technology Fund will be sought during the project preparation stage.
4

needs. The financial support will be provided through a financial intermediation

loan (FIL) and a matching grant.
(iii) Output 3: Agriculture value chain improved and operational for the target
horticulture crops. The enhancement of value chain for fruits and vegetables will
improve food safety and security and decrease food losses and wastes. The
project will (a) rehabilitate existing facilities of the Maharashtra State Agricultural
Marketing Board (MSAMB)20 to match the current demand while enhancing climate
and disaster resilience and reducing greenhouse gas emissions; (b) develop new
MSAMB facilities to address gaps in the whole value chains including pre-cooling,
cold storage, transport, distribution, and marketing; and (c) develop hub facilities
at major transport nodes through partnerships with operation partners. They will
(a) provide environmentally sustainable, all users/women friendly, high-technology,
and cost-effective (low and high cost) value chain technologies fit to the state
context; (b) utilize existing facilities with due consideration on sustainable
operation; (c) apply information technology for warehouse and supply chain
management; and (d) maximize value for money through proper operation
arrangements with private sector partners including FPOs.

9. These outputs will result in the following outcome: Maharashtra’s horticultural production
values and FPOs’ profits increased. 21 The project will be aligned with the following impacts:
achieve average agriculture sector growth rate of 5 per cent, promote agriculture produce export,
and establish fair, competitive and accessible agriculture markets (footnote 11).

C. Proposed Financing Plans and Modality

10. The government requested a loan of $100.0 million from ADB’s ordinary capital resources
to finance the project. ADB will provide loans with a mix of project loan and FIL modalities. The
government will provide $42.9 million as counterpart funding to cover tax and duties, financing
charges, and recurrent costs such as government staff salary and related operational costs. The
indicative financing plan is in Table 1. Climate mitigation is estimated to cost $2 million, and
climate adaptation is estimated to cost $10 million. ADB will finance a higher share of the
mitigation and adaptation costs. These estimates are indicative and will be updated during the
project preparation.

Table 1: Indicative Financing Plan

Amount Share of Total
Source ($ million) (%)
Asian Development Bank
Ordinary capital resources (regular loan) 100.0 70.0
Government 42.9 30.0
Total 142.9 100.0
Source: Asian Development Bank estimates.

D. Implementation Arrangements

Table 2: Indicative Implementation Arrangements

Aspects Arrangements
Indicative implementation period September 2020–August 2026

20 The MSAMB provide value chain facilities to farmers and value chain operators, and the facilities typically comprise
packhouse, pre-cooling, and cold storage spaces.
21 The design and monitoring framework is in Appendix 1.
 5

Aspects Arrangements
Indicative completion date 31 August 2026
Management
(i) Executing agency The State of Maharashtra acting through the Department of
Marketing
(ii) Key implementing agency Maharashtra State Agricultural Marketing Board
Sources: Asian Development Bank and the Maharashtra State Agricultural Marketing Board.

II. ATTACHED TECHNICAL ASSISTANCE

11. An attached transaction technical assistance (TA) will provide policy advisory and capacity
development in the field of post-harvest marketing and value chain to the State Government of
Maharashtra. The TA is estimated to cost $1.3 million, of which $1.0 million will be financed on a
grant basis by ADB’s Technical Assistance Special Fund (TASF 6). The government will provide
counterpart support in the form of office accommodation, support facilities, counterpart staff,
reports, and other logistical support through in-kind contributions. ADB will engage individual
consultants and an international consulting firm through the 90:10 quality- and cost-based
selection.

III. PROJECT PREPARATION AND READINESS

12. An existing transaction TA facility will provide technical inputs for project design and due
diligence assessments.22 Advance contracting and retroactive financing are envisaged for civil
works and consulting services. At least 30% of the bidding documents for civil works for MSAMB
facility improvement and development will be prepared, and a consulting firm will be selected
before the loan negotiations. Procurement will be undertaken following the ADB Procurement
Policy (2017, as amended from time to time) and the Procurement Regulations for ADB Borrowers
(2017, as amended from time to time).

IV. DELIBERATIVE AND DECISION-MAKING ITEMS

A. Risk Categorization

13. The project is classified as complex based on ADB's previous experience in the agriculture
sector in Maharashtra. A recent agribusiness infrastructure development project under a multi-
tranche financing facility was rated unsuccessful overall with the ratings of less than relevant,
ineffective, inefficient, and unlikely sustainable (footnote 13). Staff from the Rural Development
and Food Security (Agriculture) Thematic Group was requested to join the project team for
technical inputs. The project is categorized B for environment as the adverse environmental
impacts from output 3 are manageable and can be mitigated. Involuntary resettlement and
indigenous people categorization is C. The FIL component will not have any category A safeguard
impacts.

B. Project Procurement Classification

14. The project procurement is classified as A due to dispersed geographic locations of project
areas. Staff from Procurement, Portfolio and Financial Management Department was requested
to join the project team for technical inputs.

22 ADB. 2019. Technical Assistance to India for Strengthening Capacity to Design and Implement Water and Rural
Infrastructure Facility. Manila (TA 9738-IND, $2,000,000, approved on 30 May 2019).
6

C. Scope of Due Diligence

Table 3: Scope of Due Diligence

Due Diligence Outputs To be undertaken by
Development coordination Staff
Economic analysis Staff, TA
Financial management assessment, financial evaluation, financial Staff, TA
and integrity due diligence of FIs, and financial analysis
Gender analysis, collection of baseline data and gender action plan Staff, TA, MSAMB
Safeguard screening and categorization results Staff
Initial poverty and social analysis Staff
Project administration manual Staff, TA, MSAMB
Risk assessment and management plan Staff
Safeguard documents on environment, involuntary resettlement, Staff, TA, MSAMB
and/or indigenous peoplesa
Sector assessment Staff, TA
Summary poverty reduction and social strategy Staff, TA
Climate risk and vulnerability assessment Staff, TA
FI = financial intermediary, MSAMB = Maharashtra State Agricultural Marketing Board, TA = technical assistance.
a They will include initial environmental examination, resettlement plan, indigenous peoples plan, and environmental

and social management system arrangement as appropriate.

Source: Asian Development Bank.

D. Processing Schedule and Sector Group’s Participation

Table 4: Processing Schedule by Milestone

Milestones Expected Completion Date
1. Concept paper approval November 2019
2. Mobilization of technical assistance consultants December 2019
3. Advertisement for consulting service and some civil works procurement March 2020
4. Fact-finding mission June 2020
5. Contract awards for consulting service and at least 30% of civil works July 2020
6. Loan negotiations August 2020
7. Loan approval September 2020
8. Loan effectiveness November 2020
Source: Asian Development Bank.

E. Key Processing Issues and Mitigation Measures

Table 5: Issues, Approaches, and Mitigation Measures

Key Processing Issues
1. The lessons from the previous projects are not
fully reflected in the project design.
2. Institutional capacities of the implementing
agency is weak due to lack of successful
implementation of the Asian Development
Bank projects.
3. Financial supports are not fully utilized due to
overlapping support from the government,
other development agencies, or financial
institutions.
Proposed Approaches and/or Mitigation Measures
The project design during the transaction technical
assistance implementation will fully incorporate
mitigating measures.
Qualified staff and consultants will be engaged, and
effective training on project implementation will be
provided.
The financial intermediation loan, matching grant, and
other financial support will be carefully designed
based on demand and supply information of other
offers.
 Appendix 1 7

PRELIMINARY DESIGN AND MONITORING FRAMEWORK

Impacts the Project is Aligned with

Achieve average agriculture sector growth rate of 5 per cent, promote agriculture produce export, and
establish fair, competitive and accessible agriculture markets (Vision 2030)a
Performance Data Sources and
Indicators with Reporting
Results Chain Targets and Baselines Mechanisms Risks
Outcome By 2027:
Maharashtra’s a. Gross state value a., c. Economic Survey Sluggish price levels for
horticultural production added by horticulture in of Maharashtra horticulture products in
values and FPOs’ profit Maharashtra increased the domestic and
increased by XX% (FY2018/19 regional markets due to
baseline: $xxx million) unexpected economic
situations
b. Annual profits of b. MSAMB data or
FPOs increased by sample survey.
XX% (FY2018/19
baseline: $xxxx per
organization)

c. Farmers’ net incomes

increased by XX%
(FY2018/19 baseline:
$xxxx)

Outputs By 2026:
1. Capacity enhanced 1a. At least xx members 1a–d. Quarterly report of Financial supports are
for value chain of the FPOs (at least the implementation not fully utilized due to
integration of FPOs xx% are female) support consultant overlapping support
reporting increased from the government,
knowledge on other development
horticulture post-harvest agencies, or financial
and marketing skills institutions
(2019 baseline: 0, NA)
(RFI A)

1b.At least xx FPOs (at

least xx% are female-
headed) prepared or
updated business plans
(2019 baseline: 0, NA)
(RFI B and C)

1c. New guidelines on

post-harvest handling
and food safety
prepared (2019
baseline: NA)
(RFI D)
8

2. Financial support 2a. Financial support 2a–b. Quarterly report of

provided for FPOs and provided to at least xx the implementation
value chain operators to FPOs and value chain support consultant
improve post-harvest operators (at least 10%
practices are female-headed)
(2019 baseline: 0, NA)
(RFI C, E, and F)

2b. FPOs availed

financial support to
establish or improve xxx
rural post-harvest
infrastructure assets
(2019 baseline: 0) (RFI
G)

3. Agriculture value 3a. xxx MSAMB 3a–d. Quarterly report of

chain improved and facilities rehabilitated or the implementation
operational for the developed to be support consultant
target horticulture crops climate/disaster resilient
and mitigate
greenhouse gas
emissions (2019
baseline: 0) (RFI G, H, I,
and J)

3b. xxx logistics hub

infrastructure developed
to be climate/disaster
resilient and mitigate
greenhouse gas
emissions (2019
baseline: 0) (RFI G, I, J,
and K)

3c. Horticultural food

losses reduced to xx%
in participating FPOs
(2019 baseline: xx%)

3d. xxx female farmers

benefit from the
improved facilities (2019
baseline: 0) (RFI L)
 9

Key Activities with Milestones

1. Capacity enhanced for value chain integration of FPOs.

1.1 Develop crop-specific guidelines on harvest quality, post-harvest handling, and relevant food safety
and quality standards (Q1 2021)
1.2 Introduce best practices to FPOs on productivity, quality, and food safety to meet the market/export
requirements (Q3 2020–QX 20XX)
1.3 Provide business advisories, analytical inputs, and market intelligence to FPOs for preparation of their
business plans (Q4 2020–QX 20XX)
1.4 Conduct training on application of the latest agriculture technologies (QX 20XX–QX 20XX)
1.5 Conduct leadership trainings for FPOs (QX 20XX–QX 20XX)
1.6 Organize buyer-seller meets and arrange FPOs’ participation in international exhibitions to enhance
links between buyers and FPOs (QX 20XX–QX 20XX)

2. Financial support provided for FPOs and value chain operators to improve post-harvest
practices.
2.1 Prepare and adopt environmental and social management system acceptable to both financial
intermediaries and ADB (QX 20XX)
2.2 Provide financial support to FPOs and value chain operators through FIL (QX 20XX–QX 20XX)
2.3 Provide financial support to FPOs and value chain operators through a matching grant (QX 20XX–QX
20XX)

3. Agriculture value chain improved and operational for the target horticulture crops
3.1 Rehabilitate excising MSAMB facilities (Q4 2020–QX 20XX)
3.2 Develop new MSAMB facilities including value chain hubs (QX 20XX–QX 20XX)

Project Management Activities

Recruit implementation support consultants (Q2 2020)
Award civil works contracts (Q2 2020–2021)
Disburse financial intermediation loans and matching grants (Q4 2020–Qx 20xx)

Inputs
ADB: $100.0 million (regular OCR loan), $1.0 million (technical assistance grant)
Government: $42.9 million
Assumptions for Partner Financing
Not Applicable
ADB = Asian Development Bank, FIL = financial intermediation loan, FPO = farmer producer organization. FY = fiscal
year, MSAMB = Maharashtra State Agriculture Marketing Board, NA = not applicable, OCR=Ordinary Capital
Resources, RFI = results framework indicator, Q = quarter.
Contribution to the ADB Results Framework:
RFI A: Agribusiness integrating farmers in efficient value chains. Expected: xxxx.
RFI B: Modern knowledge-intensive corporate farming models introduced. Expected: xxxx.
RFI C: Women-owned or -led SME loan accounts opened or women-owned or -led SME end borrowers reached.
Expected: xxxx.
RFI D: Measures supported in implementation to improve capacity of public organizations to promote the private sector
and finance sector. Expected: 1.
RFI E: New financial products and services made available to the poor and vulnerable. Expected: xxxx.
RFI F: Financial preparedness instruments provided. Expected: xxxx.
RFI G: Rural infrastructure assets established or improved. Expected xxxx.
RFI H: Storages, agri-logistics, and modern retail assets established or improved. Expected: xxxx.
RFI I: New and existing infrastructure assets made climate and disaster resilient. Expected: xxxx.
RFI J: Infrastructure assets established or improved. Expected: xxxx.
RFI K: Rural economic hubs supported. Expected: xxxx.
RFI L: Women and girls benefiting from new or improved infrastructure. Expected: xxxx.
a State Government of Maharashtra, Planning Department. 2017. Vision 2030. Mumbai.

Source: Asian Development Bank.

10 Appendix 2

PROJECT PROCUREMENT CLASSIFICATION

Characteristic Assessor’s Rating:

Is the procurement environment risk for this project assessed as ☐Yes ☒No
“High” based on the country and sector/agency procurement risk
assessment?
Are multiple (typically more than three) and/or diverse executing ☐Yes ☒No ☐Unknown
and/or implementing agencies envisaged during project
implementation? Do these agencies lack prior experience in ADB
project implementation?
Are multiple contract packages and/or complex and high-value ☐Yes ☒No ☐Unknown
contracts expected (compared to recent donor-funded projects in
the country)?
Does the project plan to use innovative contracts (e.g., public– ☒Yes ☐No ☐Unknown
private partnership; performance-based; design and build; design, Design–build–operate contract is
build, and operate; etc.)? planned for “hub” infrastructures.
Are contracts distributed in more than three geographical ☒Yes ☐No ☐Unknown
locations? Exact locations will be identified
during the project preparation.
Are there significant ongoing contractual and/or procurement ☐Yes ☒No ☐Unknown
issues under ADB- (or other donor-) funded projects? Have
instances of noncompliance been declared in respect of the
executing and/or implementing agencies?
Does the government or its executing or implementing agencies ☒Yes ☐No ☐Unknown
have prolonged procurement lead times, experience
implementation delays, or otherwise consistently fail to meet
procurement time frames?
Do executing or implementing agencies lack capacity to manage ☒Yes ☐No ☐Unknown
new and ongoing procurement? Have executing or implementing The implementing agency’s
agencies requested ADB for procurement support under previous capacity needs enhancement due
projects? to insufficient past experience and
the limited number of staff.
Does the relevant market in the country have characteristics that ☐Yes ☒No ☐Unknown
may materially limit reasonable competition and/or potentially
expose the executing or implementing agency to any prohibited
practices (e.g., fraud, corruption, collusion, etc.)?
Where electronic government procurement is mandated,a do ☐Yes ☒No ☐Unknown
executing agencies face any challenges in its effective
implementation (e.g., poor connectivity, technical, capacity of
executing agencies and bidders, security, assessment and third-
party audit compliance, policy/legal framework, underuse)?
Regional department’s overall recommendation (Masahiro Nishimura, Senior Rural
Development Specialist, SAER)
Overall project categorization recommended ☒ Category A
☐ Category B
The Maharashtra State Agriculture Marketing Board implemented ADB projects before, but a recent project
completion report for Loan 2837-IND noted the procurement was not successful (partially due to the
project design, where private sector participation was required). Careful procurement risk assessment
and planning will be required for smooth implementation of the project.
Procurement, Portfolio, and Financial Management Department’s recommendation (Dharmesh
Mahendra Dawda, Procurement Specialist, PFP1)
I confirm the project procurement classification to be CAT A. We shall review the classification if there
is any change in the information during the course of project preparation.
Source: Asian Development Bank.
 Appendix 3 11

TECHNICAL ASSISTANCE FACILITY UTILIZATION UPDATE

1. The technical assistance (TA) facility for India: Strengthening Capacity to Design and
Implement Water and Rural Infrastructure Facility was approved on 30 May 2019 in an amount of
$2 million. As of 12 November 2019, contract awards totaled $374,450 and disbursements totaled
$106,354.

2. The TA facility will deliver the following outputs specifically for the ensuing Maharashtra
Agribusiness Network Project.

3. Output 1: Well-designed agriculture, rural development and water resource project

proposals and project readiness achieved. Technical expertise will be provided to support
preparation of selected investment projects for potential ADB financing. This will include
necessary due diligence involving assessments of: (i) technical suitability; (ii) economic and
financial sustainability; (iii) capacity and institutional issues; (iv) environmental and social
safeguards and gender; and (v) identification of measures to strengthen project implementation
consultants and technical inputs for loan processing.

4. Output 2: Project Implementation and management capacity of executing agency

improved. Technical expertise and capacity building will be provided to selected executing
agencies in India to enhance water and rural investment sustainability. Support will be provided
through consultants to ongoing or ensuing water and rural investment and programs within the
core TA facility priority areas. The focus will be enhancing procurement, construction and contract
management, fiduciary requirements and safeguard processes, gender mainstreaming, and
monitoring capacity. The TA facility will utilize the same consultants across multiples projects to
allow knowledge transfer of best practices. Support will also include workshops and on-the-job-
training to enhance the capacity of state line departments.

5. Resources under the technical assistance facility. The updated consultants’ input
allocation from the TA facility is presented in Table A3.2. It is confirmed that (i) the TA facility has
adequate resources, and (ii) the existing terms of reference for consultants are sufficient to
undertake the activities required to deliver the outputs for the ensuing Maharashtra Agribusiness
Network Project.
 12 Appendix 3

Table A3.2: Updated Consultants’ Input Allocation from the Technical Assistance Facility
(person-month)
Item Total Ensuing projects Ongoing or planned projects
person-
A B C D E F G H I J K
months
Indicative risk category complex complex complex complex complex complex complex complex complex complex Low

A. International
Water resources specialist 4.10 0.80 1.50 0.80 1.00
Irrigation modernization 3.00 0.50 1.00 0.50 1.00
specialist
Irrigation institutions 2.60 0.80 1.00 0.80
specialist
Water governance specialist 1.60 0.80 0.80
River basin management 1.30 0.50 0.80
specialist
River specialist 2.00 1.00 1.00

Agricultural specialist 3.80 1.00 0.80 3.50 0.50

Procurement specialist 3.50 0.50 0.50 0.50 1.00

Economist 3.70 0.50 0.80 1.00 0.80 0.80

Financial Management 2.00 0.50 1.50 0.50 1.00
specialist
Environmental safeguard 2.70 0.50 0.50 1.00 1.00 0.70
specialist
Social development 3.50 0.50 0.50 1.00 1.00 1.00 0.50
specialist
Gender specialist 1.00 0.50 0.50
Hydrologist/climate change 1.00 0.50 0.50
specialist
Coastal Management 1.50 1.50
Specialist
Coastal Morphologist / 1.00 1.00
Beach Management
Specialist
Communication Specialist 2.50 0.50 0.50 0.50 0.50 0.50

Unallocated 3.70 0.50 0.60 0.80 1.00 0.80

Subtotal A. 44.50 5.30 8.70 3.80 3.60 8.00 2.50 1.80 5.30 1.50 5.40 3.30

B. National
Water resources specialist 4.50 1.50 2.50 0.50
 Appendix 3 13

Item Total Ensuing projects Ongoing or planned projects

person-
A B C D E F G H I J K
months
Indicative risk category complex complex complex complex complex complex complex complex complex complex Low
Irrigation modernization 7.00 1.50 2.00 1.00 2.50
specialist
Water governance specialist 1.50 1.50

Agricultural specialist 6.00 1.50 2.50 7.00

Procurement specialist 8.00 2.50 1.00 2.00 1.00 1.00 1.00

Economist 6.50 1.50 1.00 1.00 3.00 2.00

Financial Management 6.50 1.00 1.00 0.50 0.50 5.00 2.00
specialist
Environmental safeguard 3.00 1.00 1.00 4.00 1.00
specialist
Social development 8.50 1.50 1.00 1.00 1.00 2.00 1.00 2.00
specialist
Gender specialist 1.00 0.50 0.50

Project Coordinator 18.00 1.50 3.00 1.50 1.50 1.50 1.50 1.50 1.50 1.50 1.50
Institutional Capacity 0.50 0.50
Assessment Specialist
Coastal Processes and 1.50 1.50
Hydrodynamics Specialist
Geotechnical 0.50 0.50
Communication Specialist 2.80 0.50 0.50 1.00 0.80 2.00
Unallocated 4.80 2.00 0.30 1.00 1.50

Subtotal B. 80.60 13.50 17.50 4.50 9.60 25.00 3.00 2.50 8.00 2.50 8.00 3.00

Total (A + B) 125.10 18.80 26.20 8.30 13.20 33.00 5.50 4.30 13.30 4.00 13.40 6.30

(A) Himachal Pradesh Subtropical Horticulture and Irrigation Value-Addition Project

(B) Capacity Development for Irrigation Management including Upper Bhadra Project and Lower Suktel Irrigation Project;
(C) Assam Flood and River Bank Erosion Protection Project (follow on loan 2020);
(D) Maharashtra Sustainable Coastal Protection and Management;
(E) Preparation of Maharashtra Agribusiness Network Project;
(F) Assam Integrated Flood and River Erosion Risk Management and Investment Program;
(G) Madhya Pradesh Irrigation Efficiency Investment Project;
(H) Climate adaptation in Vennar Subbasin in Cauvery Delta Project;
(I) Ara Canal Water Productivity Improvement Project (formerly Bihar Irrigation Project);
(J) Karnataka Integrated and Sustainable Water Resources Management Investment Program; and
(K) Maharashtra Rural Connectivity Improvement Project.
Source: Asian Development Bank.
14 Appendix 4

INITIAL POVERTY AND SOCIAL ANALYSIS

I. POVERTY IMPACT AND SOCIAL DIMENSIONS

A. Links to the National Poverty Reduction Strategy and Country Partnership Strategy
The proposed Maharashtra Agribusiness Network Project will support development of inclusive and cost and
resource-efficient horticultural agribusiness and value chains that will help increase farm income of 200,000 farmers
and minimize food loss. The project is anticipated to (i) connect to multiple modern and efficient agribusiness value
chains via FPOs; (ii) connect to improved horticultural harvest and post-harvest system for distribution of high quality
produce and food loss reduction, supported by the adoption of best practices and technologies as well as improved
facilities and infrastructure; and (iii) provide credit and financial services, market information, relevant knowledge
and technology, risk management tools and other essential agribusiness services.

The project aligns with the State Government of Maharashtra’s Vision 2030a and ADB’s India Country Partnership
Strategy (2018–2022).b These overarching policy frameworks emphasize the pivotal role of rural infrastructure in
poverty reduction and social development. From a sector policy perspective, India’s agriculture policy highlights the
need to develop farm and value chain facilities for post-harvest management, storage, transport, marketing and
export so that farmers will get due price for their produce. The project aligns with the Sustainable Development
Goals 1, 2, 5, 8, 9, 10, 12, and 13 and will contribute to poverty reduction, inclusive growth, and social development.
B. Poverty Targeting:
General intervention Individual or household (TI-H) Geographic (TI-G) Non-income MDGs (TI-M1, M2,
etc.)
Maharashtra is the second largest state in India in terms of population and geographical area. The total population
is 1.21 billion, with a sex ratio of 1,000 males to 952 females.c Approximately 20 million poor are living below the
national poverty line of less than $1.90 per day.d While Maharashtra is India's leading industrial state, most people
(53%) directly or indirectly depend on agriculture for their livelihood and subsistence. The project aims to enhance
farm income, increase farm and non-farm jobs, and reduce food loss along the horticulture system in Maharashtra.
The project outcome will be: Maharashtra’s horticultural production values and FPOs’ profits increased. The project
will include gender-sensitive and participatory consultation approach to ensure that the interests and needs of poor
and marginal farmers are reflected in the project implementation and outputs.
C. Poverty and Social Analysis
1. Key issues and potential beneficiaries.
The expected project beneficiaries are marginal farmers (smallholding of less than 2 hectares), rural population,
agribusiness industries and end consumers. These beneficiary groups depend upon the agriculture value chain,
which lacks in efficiency. For farmers and other agribusiness beneficiaries to fully benefit from the growing demand
for safe and high-quality food, fragmented farmers and markets need to be connected as efficient and sustainable
agriculture value chain. The slow growth in the agriculture sector has widened the rural–urban divide and contributed
to severe distress in rural areas.e Maharashtra’s rural communities suffer similar challenges to other Indian states:
(i) high levels of indebtedness, underemployment, vulnerability to minor and major shocks (market fluctuations,
extreme weather events); (ii) lack of access to health, education, communications and information; (iii) discrimination
and marginalization by caste, or vulnerability; and (iv) limited opportunities for livelihoods improvement.
Some of the general issues that confront marginal farmers are: (i) imperfect markets for inputs/product leading to
smaller value realizations; (ii) absence of access to credit markets or imperfect credit markets leading to suboptimal
investment decisions or input applications; (iii) poor human resource base; (iv) smaller access to suitable extension
services restricting suitable decisions regarding cultivation practices and technological know-how; (v) poorer access
to “public goods” such as public irrigation, command area development, and electricity grids; and (vi) greater
negative externalities from poor quality land and water management. f Consumption expenditure of marginal farmers
exceeds their estimated income by a substantial margin and presumably the deficits have to be plugged by
borrowing or other means.g
2. Impact channels and expected systemic changes.
The project will have an overall impact on poverty reduction. It will directly benefit the poor and vulnerable members
of the farming community by providing an efficient post-harvest marketing and agriculture value chain. The project
will engage marginal farmers through FPOs and bring benefits with the growing food demand and additional profits
by increasing crop values and reducing food losses. Access to financing would enable improvements in the farmer
income and livelihood of rural population by generating various direct marketing opportunities for many marginal
farmers. Vulnerable groups, particularly women, scheduled castes, and the poor will be targeted through the
project’s gender action plan.
3. Focus of (and resources allocated in) the transaction TA or due diligence.
An environment and social safeguard assessment will be conducted under the existing transaction technical
assistance facility.h Gender and social inclusion assessments will also be carried out to explore opportunities to
 Appendix 4 15

mainstream gender and social development aspects. All relevant surveys will ensure that gender and social
parameters are effectively integrated.
II. GENDER AND DEVELOPMENT
1. What are the key gender issues in the sector and/or subsector that are likely to be relevant to this project or
program?
Key issues observed in agriculture sector are (i) women’s contributions are critical to the well-being of rural
households; (ii) room for large productivity increases by empowering women farmers; (iii) shift from the farm to the
non-farm sector has been slower among women than men, and rewards for women’s labor remain lower in both
sectors; (iv) women want opportunities for employment and self-employment; (v) women’s nonfarm self-employment
and enterprises tend to be less remunerative than those of men; and (vi) low ownership by women of productive
assets, particularly land, has major implications for women’s productivity, incomes, and well-being.i Women
comprise over 42% of the agricultural labor force in the country, signifying increasing feminization of agriculture, and
yet they own less than 2% of its farm land, and India is one of the 15 countries in the world, prevalence of patriarchal
tradition that prevents women from enjoying equal ownership rights to property.j
Women play significant roles in production and post-harvest processing that are often key determinants of the size
and quality of the final commodities produced.k Women in Maharashtra require ongoing support to increase their
participation, representation, voice, and influence in decision-making that affects their lives and the lives of their
family and community.
2. Does the proposed project or program have the potential to contribute to the promotion of gender equity and/or
empowerment of women by providing women’s access to and use of opportunities, services, resources, assets,
and participation in decision making? Yes No

Women will be important stakeholder in the project and will be provided opportunities to actively engage in project
preparations and implementation. Gender design features such as promotion of female-headed FPOs and women
friendly infrastructure design will be included within a gender action plan and feature in the project’s design and
monitoring framework.
3. Could the proposed project have an adverse impact on women and/or girls or widen gender inequality?
Yes No
The project is not expected to have an adverse impact for women and/or girls; who will be actively engaged in the
project design and implementation.
4. Indicate the intended gender mainstreaming category:
GEN (gender equity) EGM (effective gender mainstreaming)
SGE (some gender elements) NGE (no gender elements)

III. PARTICIPATION AND EMPOWERMENT

1. Who are the main stakeholders of the project, including beneficiaries and negatively affected people? Identify
how they will participate in the project design.
Farmers, rural men and women, local authorities, civil society, value chain operators, and the government will be
the main stakeholders. During the due diligence, all project stakeholders will be consulted and provided information
and opportunities to influence the project design according to their needs and interests.
2. How can the project contribute (in a systemic way) to engaging and empowering stakeholders and beneficiaries,
particularly, the poor, vulnerable, and excluded groups? What issues in the project design require participation of
the poor and excluded?
The project will adopt a gender-sensitive and participatory approach to community consultations. Farmers and rural
people, particularly women, are primary focus in the project, who may lack voice and confidence to contribute to
decision-making, social mobilizers/consultants will organize separate meetings with these groups and build their
confidence to influence collective decision-making processes. Representatives from marginalized and
disadvantaged groups will be represented in all aspects of project planning and implementation.
3. What are the key, active, and relevant civil society organizations (CSOs) in the project area? What is the level
of civil society organization participation in the project design?
Information generation and sharing (M) Consultation (M) Collaboration (L) Partnership (L)
CSOs operating within the project areas will be invited to public consultations and can assist with information sharing
about the project. Potential CSO’s will be identified during the due diligence.
4. Are there issues during project design for which participation of the poor and excluded is important? What are
they and how should they be addressed? Yes No
IV. SOCIAL SAFEGUARDS
A. Involuntary Resettlement Category A B C FI
16 Appendix 4

1. Does the project have the potential to involve involuntary land acquisition resulting in physical and economic
displacement? Yes No
No physical or economic displacement will occur for the project loan component. The project is therefore categorized
as C for Involuntary Resettlement.
For the FIL component, social due diligence will be carried out on the financial intermediaries and an environmental
and social management system arrangement will be prepared.
2. What action plan is required to address involuntary resettlement as part of the transaction TA or due diligence
process?
Resettlement plan Resettlement framework Social impact matrix
Environmental and social management system arrangement None
B. Indigenous Peoples Category A B C FI
1. Does the proposed project have the potential to directly or indirectly affect the dignity, human rights, livelihood
systems, or culture of indigenous peoples? Yes No
The project is not anticipated to negatively impact IP populations however IP farmers who voluntarily elect to join
and participate in agribusiness activities may benefit. This benefit would be derived from improved knowledge and
skills, agricultural production and income. The project preparations phase will assess the extent to which IPs are
present in the project area and able to participate. The categorization will be reevaluated following completion of
the TRTA.
2. Does it affect the territories or natural and cultural resources indigenous peoples own, use, occupy, or claim, as
their ancestral domain? Yes No
3. Will the project require broad community support of affected indigenous communities? Yes No
The project will not generate any new impacts to indigenous people.

4. What action plan is required to address risks to indigenous peoples as part of the transaction TA or due
diligence process?
Indigenous peoples plan Indigenous peoples planning framework Social impact matrix
Environmental and social management system arrangement None
V. OTHER SOCIAL ISSUES AND RISKS
1. What other social issues and risks should be considered in the project design?
Creating decent jobs and employment (M) Adhering to core labor standards (M) Labor retrenchment
Spread of communicable diseases, including HIV/AIDS Increase in human trafficking Affordability
Increase in unplanned migration Increase in vulnerability to natural disasters Creating political
instability
Creating internal social conflicts Others, please specify: The main social risk associated with the project is
the exclusion of marginalized groups, such as women farmers, who may be unfamiliar with web-based
information sharing and/or excluded from project participation opportunities.
2. How are these additional social issues and risks going to be addressed in the project design?
The project will address the risk of social exclusion through the stakeholder communication and gender action
plan preparation during the F-TRTA implementation.
VI. TRANSACTION TA OR DUE DILIGENCE RESOURCE REQUIREMENT
1. Do the terms of reference for the transaction TA (or other due diligence) contain key information needed to be
gathered during transaction TA or due diligence process to better analyze (i) poverty and social impact, (ii) gender
impact, (iii) participation dimensions, (iv) social safeguards, and (v) other social risks. Are the relevant specialists
identified?
Yes No
Adequate resources will be allocated from the F-TRTA to engage social experts to undertake social safeguard due
diligence and planning, gender analysis, and poverty and social assessment.
2. What resources (e.g., consultants, survey budget, and workshop) are allocated for conducting poverty, social,
and/or gender analysis, and participation plan during the transaction TA or due diligence?
Budget for consultants will be allocated from the F-TRTA for survey, workshop, and consultations.
FIL = financial intermediation loan, F-TRTA = transaction technical assistance facility.
a State Government of Maharashtra, Planning Department. 2017. Vision 2030. Mumbai.
b ADB. 2017. Country Partnership Strategy: India, 2018–2022—Accelerating Inclusive Economic Transformation.

Manila.
c Government of India. 2011. Census of India. Delhi.
d World Bank. 2017. Maharashtra: Poverty, Growth & Inequality. Washington, D.C.

http://documents.worldbank.org/curated/en/806671504171811149/pdf/119254-BRI-P157572-Maharashtra-
Poverty.pdf
 Appendix 4 17

e Government of Maharashtra, Directorate of Economics and Statistics Economic. 2018. Survey of Maharashtra 2017–
2018. Mumbai.
f Indira Gandhi Institute of Development Research. 2012. Small Farmers in India: Challenges and Opportunities.
Mumbai.
http://www.igidr.ac.in/pdf/publication/WP-2012-014.pdf
g National Commission for Enterprises in the Unorganised Sector. 2008. A Special Program for Marginal and Small
Farmers. New Delhi. http://dcmsme.gov.in/Special_Programme_for_Marginal_and_Small_Farmers.pdf
h ADB. 2019. Technical Assistance to India for Strengthening Capacity to Design and Implement Water and Rural
Infrastructure Facility. Manila (TA 9738-IND, $2,000,000, approved on 30 May 2019).
i ADB. 2013. India: Gender Equality Diagnostic of Selected Sectors. Manila.
j National Council of Applied Economic Research. 2018. Gender Gap in Land Ownership. New Delhi.
http://www.ncaer.org/news_details.php?nID=252
k International Finance Corporation. 2016. Investing in Women along Agribusiness Value Chains. Washington, D.C.
https://www.ifc.org/wps/wcm/connect/02c5b53e-420f-4bf4-82bb-
6f488ff75810/Women+in+Agri+VC_Report_FINAL.pdf?MOD=AJPERES&CVID=m0JfSbv