The small farmers do not have the economic strength to retain the produce with them till the market prices are favourable. There has been a felt need in the country to provide the farming community with facilities for scientific storage so that wastage and produce deterioration are avoided and also to enable it to meet its credit requirement without being compelled to sell the produce at a time when the prices are low. A network of rural godowns will enable small farmers to enhance their holding capacity in order to sell their produce at remunerative prices and avoid distress sales. Accordingly, Gramin Bhandaran Yojna, a Capital Investment Subsidy Scheme for Construction / Renovation of Rural Godowns was introduced in 2001-2002 and extended upto 31.03.2007. The Scheme has now been approved for implementation during the years 2007–12, with modifications in its operational guidelines for new projects to be sanctioned after 26 /06 /2008. Accordingly, revised operational guidelines of the scheme are applicable for new projects sanctioned on or after 26 /06 /2008 to 31.03.2012.
- To create scientific storage capacity in the rural areas to meet the requirements of farmers for storing farm produce.
- To promote grading, standardization and quality control of agricultural produce to improve marketability.
- To prevent distress sale of produce by farmers immediately after harvest by promoting pledge financing and marketing credit.
- To introduce a national system of warehouse receipts in respect of agricultural commodities stored in such godowns.
Eligible Borrowers: Individuals, farmers, group of farmers/growers, Partnership/Proprietary firms, Non-Government Organizations (NGOs), SHGs, Companies, Corporations, Co-operatives, Local Bodies other than Municipal Corporations, Federations, Agricultural Produce Marketing Committees, Marketing Boards and Agro Processing Corporations in the entire country. Assistance for renovation of rural godowns will, however, be restricted to godowns constructed by Co-operatives only.
Location: Godowns can be constructed/ located in any area outside the limits of a Municipal Corporation area. Rural godowns located in Food Parks promoted by Ministry of Food Processing Industries are also eligible for subsidy.
Project Cost: Assistance under the scheme will be available on capital cost of construction of godowns including allied facilities like boundary wall, internal road, platform, internal drainage, weighing, grading, packaging and quality certification.
The ceilings relating to project cost calculation for subsidy computation are as under:
|Capital cost for Rural godowns upto 1000 tonnes capacity||Project cost as appraised by Bank or actual cost or `2,500/- per tonne of storage capacity, whichever is lower|
|Capital cost for Rural godowns exceeding 1000 tonnes capacity||Project cost as appraised by Bank or actual cost or `1,875/- per tonne of storage capacity, whichever is lower. However, for godowns exceeding 10,000 tonnes capacity, the subsidy would be restricted to that admissible for capacity of 10,000 tonnes only.|
The capacity of godown shall be calculated @ 0.4 M.T. per cu.mtr.
Subsidy: Back ended subsidy provided by Department of Agriculture and Co-operation through NABARD as under based on the capital cost of the project and is linked to Bank credit i.e. Projects financed by Banks/Co-operatives etc. only are eligible for subsidy:
|Rate of Subsidy||Eligibility||Max. Subsidy ceiling|
|33.33%||Projects in North-East, Hilly areas, Women farmers and their SHGs/Co-operatives and SC/ST entrepreneurs and their SHGs/Co-operatives||` 62.50 lacs|
|25%||All categories of farmers (other than women farmers), agriculture graduates, co-operatives and State and Central Warehousing Corporations||` 46.87 lacs|
|15%||Individuals, Companies, Corporations etc.||` 28.12 lacs|
- Normally subsidy is available only for godowns of capacity 100 tonnes (minimum) and a maximum capacity of 10,000 tonnes.
- If one applicant is making several godowns in different locations, each godown may be considered as a separate project and for each such godown the eligible subsidy may be given upto a capacity creation of 10,000 MT, even if the bank has sanctioned all such godowns through one common letter.
- If more than one godowns are located in the same premises, then, it may be examined as to whether such godowns are proposed to be built on the land located in different gatta/survey nos. whether they separately have all the required amenities and space. Only if they have such separate specifications, they may be considered as projects in different locations, for the purpose of subsidy. Otherwise, they may be considered as a single project only and overall subsidy for such project may be limited to 10,000 MT.
Release of subsidy: 50% of eligible subsidy is provided as Advance Subsidy by NABARD on submission of a project profile-cum-claim form immediately on sanction of loan by the Bank.
The remaining 50% of the subsidy would be disbursed by NABARD on completion of the project as per scientific standards put fort and envisaged in the project and obtention of a satisfactory report by a Joint Inspection Committee comprising officials from the Bank, NABARD and the Directorate of Marketing and Inspection in the State.
|Projects located in States/ areas other than NE States/ hilly areas, and projects not belonging to women farmers/ SC/ ST entrepreneurs & their self-help groups/ cooperatives||Projects located in NE States/ hilly areas**/ & projects belonging to Women Farmers***/ SC/ST entrepreneurs & their self help groups/ Co-operatives|
|Source of finance||Farmers, Agriculture Graduates, Cooperatives and State / Central Warehousing Corporations||Individuals, Companies and Corporations etc.|
|Owner’s minimum contribution*||25%||25%||20%|
|Subsidy from the Govt.||25%||15%||33.33%|
|Term loan from eligible Financing institutions (Minimum)||50%||50%||46.67%|
* Cost of land not exceeding 10% of the project cost can form part of the owner’s contribution.
Documentation: As applicable to ATLs
Security: Should be adequately secured by following Bank’s norms for obtaining both primary as well as collateral security, in order safeguard the interest of the Bank.
Interest: Pricing is done based on credit rating based on the CRA model (VERIFY)
Repayment: Repayment period normally be allowed upto 9 years including two years of grace period, depending upon cash flow of the unit/scheme. The repayment schedule will be drawn on the total loan amount (including subsidy). The subsidy amount will be adjusted after liquidation of bank loan (net of subsidy) but not before 5 years from the date of disbursement of first instalment of term loan.
Insurance: Insurance of assets purchased/created out of Bank’s financial assistance/fixed assets/stocks under pledge or hypothecation/property mortgaged to Bank is necessary to safeguard the interest of both the Bank and borrower.
- NABARD would release subsidy to the financing bank on submission of commissioning certificate. Subsidy admissible under the scheme will be kept in “Subsidy Reserve Fund Account”, Borrower-wise in the books. No interest shall be paid on this amount. Similarly, no interest will be charged in the loan account to the extent of subsidy.
- Bank’s usual norms for appraisal of the scheme, release of loan, inspection, supervision and follow-up etc. must be followed for ensuring proper end use of funds.
- NABARD check list to facilitate the compliance of the requirement of formalities/scrutiny/appraisal of proposal to NABARD in respect of the scheme is annexed to Cir. No.AGR/2000-01/11 Dt. 05.07.2000.