#agro processing cluster scheme

Agro Processing Cluster - Industrial Subsidy

The Agro Processing Cluster scheme is introduced by the Ministry of Food Processing Industries (MoFPI). The scheme aims for development of modern infrastructure and to encourage entrepreneurs to set up food processing units based on a cluster approach. These clusters help in reducing the wastage of surplus agricultural and horticultural produce while promoting value addition. This, in turn, increases farmers' income and creates employment opportunities at the local level.

Few capital-intensive infrastructure facilities like machinery for sorting, grading, cleaning, etc., are commonly used by almost all food processing industries. There are also basic enabling infrastructure facilities such as water supply, power supply, effluent treatment, roads, and other common utilities that require substantial investment. The Agro Processing Cluster Scheme encourages entrepreneurs to develop these common and basic infrastructure facilities, making it more viable for food processing industries to establish operations with the required infrastructure already in place.

Pattern of Assistance

The assistance is provided as Grant-in-Aid towards the eligible capital cost as follows:

For General Areas: 35% of the eligible project cost.

For North-Eastern States and Difficult Areas: 50% of the eligible project cost.

Maximum Grant: ₹10 Crore per project.

Release of Grant

The grant is released in four installments:

First Installment (35%) – Released after incurring expenditure of 35% of the bank term loan and 35% of the promoter's contribution/equity.

Second Installment (40%) – Released after incurring expenditure of 75% of the bank term loan and 75% of the promoter's contribution/equity.

Third Installment (15%) – Released after incurring expenditure of 90% of the bank term loan and 90% of the promoter's contribution/equity.

Fourth & Final Installment (10%) – Released after completion of the project and submission of the requisite documents.

Eligible Components of the Scheme

Basic Enabling Infrastructure

Development of industrial plots

Boundary wall

Roads

Drainage

Water supply

Electricity supply including power backup

Effluent Treatment Plant (ETP)

Parking bay

Weighbridges

Common office space

Core Infrastructure

Food testing laboratory

Cleaning facilities

Grading facilities

Sorting facilities

Packing facilities

Steam generation boilers

Dry warehouse

Cold storage

Pre-cooling chambers

Ripening chambers

Individual Quick Freezing (IQF)

Specialized packaging

Other common processing facilities

Important to Remember

Project proposals must achieve a minimum cut-off score of 60 marks to be eligible for assessment under the scheme.

In case of non-adherence to the prescribed timelines, a penalty of 1% of the installment amount due will be imposed for every month's delay.

The Ministry will periodically review the progress of projects under the scheme.

Pre and post inspections may be conducted by the Ministry officials, PMA, and the State Government to assess the physical, financial, and operational progress whenever required.

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