Krishak-Sarathi

Menu

  • Home
  • Farmers Club Prog.
    • Overview
    • Objective
    • NABARD Assistance
  • Watershed Dev. Prog.
    • Introduction
    • Watershed Development Projects through Co-funding arrangement with Corporates
    • Web-based monitoring of watershed projects
    • Impact Evaluation of Watershed Projects- Major findings
    • New initiatives
  • Tribal Dev. Prog.
    • Introduction
    • Brief guidelines on TDF
    • Implementing partners
    • Steps in project implementation
    • Project Duration
    • Project Size
    • Funding Support
    • Present Status
    • Impact of the programme
  • FPO
    • Background
    • Status of FPOs
    • Credit Requirement of FPOs
    • Initiatives by NABARD
    • New Central Sector Scheme on FPOs
    • Issues & challenges faced by FPOs
  • UPNRM
    • Introduction
    • Portfolio of activities to be supported under the NRM
    • Information & Knowledge Management
    • Channel partners
    • Status of the programme so far
    • Impact of the programme
  • FSPF
    • Introduction
    • Objectives
    • Guiding Principles
    • Eligible Activities
    • Eligible Institutions
    • Duration of the Projects

FPO

FPO

  • Producers Organization Development Fund (PODF)
  • Promotion of farmer Producer Organizations under Produce Fund
Inner Banner
  1. Home
  2. FPO
  3. Producers Organization Development Fund (PODF)

Producers Organization Development Fund (PODF)

Introduction

Indian farming is characterized by a large number of marginal and small holders ( almost 85 per cent) who are exposed to multiple risks and vulnerability. The fragmented and dispersed nature of farm holding poses major problems for on-farm productivity and the resultant farm incomes, especially in the rain fed areas. The immediate recourse for the marginal and small farmers to tide over the state of vulnerability and deprivation is to scale up the operations and have improved access to technologies, credit and market through formation of Producer Collectives/ Organizations. Govt. of India has considered farm aggregations and collectivization of farm produce through organizing Producer Organizations as a means to boost the agricultural growth during the 12th plan period. NABARD has been extending financial assistance to Producer Organizations by creating “Producers Organization Development Fund (PODF) out of its surplus in the year 2011.

Salient features of NABARD Support scheme under PODF

Eligible Activities & Quantum of Grant support.

The need based grant support up to a maximum of 20% of loan amount in the case of POs and 10% in the case of PACS/PCARDBs, linked to availment of loan from the Subsidiaries of NABARD / banks will be considered for sanction, provided the activity considered for support, forms part of the project and its needs are clearly evaluated and justified in the loan sanction memorandum.

The following broad activities will be eligible for grant support out of PODF

Support to Producer Organization.

Training/ Capacity Building


Various types of capacity building initiatives are:

  • Skill development in order to enable the members produce goods, both in farm and/ or off farm sector,
  • Business planning
  • Technological extension through classroom training,
  • Exposure visits, agricultural university tie ups, expert meetings, etc.
  • Tie-up with agribusiness incubators/ professional agencies for business facilitation/incubation services
  • ) Any other capacity building initiative which directly benefits the P.O.

Grant support for specific activities not involving loan component, such as special studies, stakeholders’ Meet/conference, Round Table, building the specialized capacities of existing POs, ICT interventions for improving marketing/ operational efficiency and such other critical interventions necessary for building sustainable POs.

Market Linkage Support

  • Support for setting up of marketing infrastructure facilities for sale of produce.
  • Support could even be on the lines of rural haat and rural mart if the situation so desires or it could be structured differently based on the need.
  • NABARD will explore tie ups with buyers for Producers Organization's produce.
  • NABARD shall help form partnerships between Producers Organizations and local or large companies /retail chains, etc.
  • Through existing schemes of various Ministries, Govt. Departments, Missions, etc., NABARD will promote creation of necessary infrastructure, wherever possible.

Support for other purposes

DPR Preparation

Support for preparation of DPR in case the project is to be sanctioned by the subsidiaries of NABARD. The grant amount would be within the overall cap of 20% of loan amount (max Rs. 1.0 lakh or 0.50% of project cost).


Administrative Cost to PO

The POs which directly avail credit facility from the lending institutions and without having support of any Promoting agency (or Promoting agency is not a corporate), may be given a maximum of 5% of the loan amount within the overall cap of 20%, as grant towards administrative costs. This facility is available to POs which are less than 5 years old. In case, PO is more than 5 years old, the amount would be restricted to a maximum of 2.5% of the loan amount, within the overall cap of 20%. Other conditions are:

  • 20% of the grant amount under administrative support will be given as advance. An amount of 60% would be released in 3 equal half-yearly installments and the balance 20% will be given at the end of repayment period and paid on satisfactory repayment.
  • Support towards administrative cost will be extended only if it is found that the PO is facing viability problem by having the administrative cost for the initial phase capitalized/ made a part of working capital.
  • The need for grant support should be clearly justified in the sanction memorandum by the lending agency with proper financial analysis.
  • Grant towards administrative cost would be released directly to the PO and in such case, separate incentive to promoting agency would not be available.

Incentive for the Promoting Agency

Need-based incentive can be given to the Promoting agency (other than corporates), purely on a case to case basis as per the following guidelines:

  • A maximum of 5% of loan amount (for PO less than 5 years old) and a maximum of 2.5% (for PO more than 5 years old) within the overall cap of 20%, can be given as incentive to the Promoting agency. This support would be extended only if it is found that the PO is not able to compensate the Promoting agency for its efforts by having the administrative cost for the initial phase capitalized/ made a part of working capital.
  • 10% of the incentive will be given as advance and 20% at the end of repayment period and paid on satisfactory repayment. Balance 70% would be given in equal instalments linked with each installment of loan repayment.
  • The need for grant support should be clearly justified in the sanction memorandum by the lending agency with proper financial analysis.
  • Wherever this facility is given to the promoting agency, grant support towards administrative costs, would not be available.

Credit Guarantee Facility

Contribution towards creation of risk fund / credit guarantee fund by NABARD for facilitating collateral free lending to POs by the Commercial banks, RRBs, Co-operative banks and the subsidiaries of NABARD. For this, separate guidelines will be framed by NABARD.


Any other promotional support

Any other promotional / developmental activities which is felt necessary for enabling a Producer Organization function in a better and profitable manner subject to specific approval of DMD / Chairman.


Grant Support to PACS/ PCARDBs as MSC:

With a view to facilitating PACS / PCARDBs to became a Multi Service Centre and extend a range of pre and post-harvest agro related services for the benefit of the farmer members, need based grant support not exceeding 10% of the loan amount, will be available to PACS/ PCARDBs which are availing credit facility from NABARD. However, the grant amount will not be utilized towards the capital cost of the project.

The following activities can be supported under the grant component:

  • Knowledge dissemination center – cost of one PC (need based).
  • Initial administrative cost to start new business activities i.e. reimbursing 50% of the salary of the additional staff engaged for the initial period up to 12 months.
  • Activity specific training to farmers, if required. In case the loan is sanctioned to SCB/CCB, the concerned bank can factor Project Management Expenses up to 2% from the grant component within overall limit (10% of the loan amount).
  • Other need based trainings to the farmers for adopting best Management Practices, technology transfer, crop diversification, etc., may be supported from the existing funds like FSPF or under other developmental/ promotional programmes.

Institutions Eligible for Grant Assistance

Producer Companies/ Producers Organizations including PACS/PCARDB as MSC. Subsidiaries of NABARD, promoting/ facilitating agencies, agribusiness incubators and other professional organizations providing capacity building/ handholding support to POs/ PACS/PCARDBs.

Any other institution/ organization as approved by NABARD, whose objectives/ activities are in conformity with the overall objectives of PODF.


Progress so far

The cumulative sanctions of grant assistance to the Producer organizations amounted to Rs. 13.59 crore and disbursements to the tune of Rs.4.37 crore as on 28 February 2018, benefiting a total of 221 POs in the country. Similarly, 2592 PACS have been assisted under NABARD scheme with cumulative sanctions of grant assistance to the tune of Rs. 32.01 crore and Rs. 6.88 crore has been disbursed up to the same period.

© 2017 All Right Reserved, NABARD.