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Dr. Diwakar Hegde, AGM NABARD Maharashtra Regional Office, Pune.

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Presentation on theme: "Dr. Diwakar Hegde, AGM NABARD Maharashtra Regional Office, Pune."— Presentation transcript:

1 Dr. Diwakar Hegde, AGM NABARD Maharashtra Regional Office, Pune

2 Structure of the Session  Brief Introduction  Horticulture Development Programmes  Credit Requirement and GLC  Feasible Projects  Technical Appraisal  Financial Appraisal  Commercial Appraisal  Entrepreneurial Appraisal  Issues  Schemes of NHB & NMPB

3 Horticulture  POMOLOGY (Fruits)– Mango,Grapes etc.  OLERICULTURE(Vegetables) – Potato, Tomato etc.  FLORICULTURE(Flowers) – Rose, Gerbera etc.  PLANTATION CROPS – Tea, Coffee, etc.,  MEDICINAL AND AROMATIC PLANTS – Tulsi, Aloe vera, Lemongrass etc.  SPICES AND CONDIMENTS – Pepper, Chillies etc.  HORTICULTURE PROCESSING – Jams, Jellies, Pickles, Juices etc.  OTHERS – Sericulture, Mushroom & Bee Keeping

4 STATUS OF HORTICULTURE Crops AreaProductionAreaProductionAreaProduction Fruits Vegetables Spices Plantation Crops Flowers Others Total ( Area – Million Ha, Production – Million T )

5 CREDIT REQUIREMENT FOR HORTICULTURE CROPS  PRODUCTION CREDIT FOR SEASONAL AGRICULTURAL OPERATIONS : Eg : Vegetables, some flower crops, MACs  INVESTMENT CREDIT : Most fruit crops, plantation crops, vegetables and floriculture under polyhouse, MACs  WORKING CAPITAL REQUIREMENT : For Mushroom, Commercial Floriculture, fruit and vegetable processing units etc.

6 GROUND LEVEL CREDIT FLOW FOR HORTICULTURE CropGLC (Rs. in crore) CAGR (last ten years)26.36 % CAGR (last five years)44.10 %

7 POSSIBLE PROJECTS  Planting Material Supply – Commercial Nurseries and Tissue Culture Units  Horticulture development projects –  Predominantly for raising orchards, growing vegetable,flowers etc. as a single crop/composite venture in few acres/ha with minimum required infrastructure facilities  Large scale projects with comprehensive infrastructure development for production, irrigation, packhouse, transportation etc.  Large scale integrated projects for production and processing  Hi-Tech/ Green House Horticulture  Stand alone processing facilities  Small estates for growing plantation crops  Large estates with processing factories  Mixed / Integrated Farming systems

8 Role of project appraisal  To stop bad projects.  To prevent good projects from being destroyed  To determine if components of project are consistent  To assess the sources and magnitude of the risk  To determine how to reduce risks and efficiency share risks

9 APPRAISAL OF HORTICULTURE PROJECTS  Technical Appraisal – Technical Feasibility  Financial Appraisal – Financial Viability & Bankability  Commercial Aspects - Marketability  Entrepreneurial Appraisal – Management of the project

10 TECHNICAL APPRAISAL  Suitability of the area  Agro climatic factors  Topography of the land  Protection from animals  plan, layout, spacing  package of practices  requirement of intercultural operations (training, pruning etc.)  crops requiring support (grapes, betelvine, citrus, vegetables etc.)

11 TECHNICAL APPRAISAL monocrop - inter crop  mixed crop - mixed farming  extension support  availability of inputs  estimation of yields  marketing  supply of power

12 FINANCIAL APPRAISAL  PROJECT COST  arrive at item wise cost & total cost  cost for machinery supported by invoice, civil structures supported by estimates  PHASING  physical  Financial ➔ FINANCIAL ANALYSIS ● NPW ● BCR ● IRR ● DSCR ● RATIO ANALYSIS ● RISK AND SWOT ANALYSIS

13 FINANCIAL APPRAISAL  RATE OF INTEREST & SECURITY  as per RBI guidelines  REPAYMENT PERIOD  gestation period /Economic life  repayment based on cash flow  realistic estimations of income

14 COMMERCIAL APPRAISAL  Marketability of the produce/ product  Competing products  Marketing Arrangements/ tie ups  Price Spread available

15 ENTREPRENEURIAL APPRAISAL  Background  Experience  Financial strength  Supporting Technical Manpower

16 Issues Long Gestation Period Likelihood of inflated Costs. Cost of Planting Material Marketing Arrangements

17 NHB: Development of Commercial Horticulture through Production and Post Harvest Management  Back ended subsidy  Production related components –  General : 20% (max. limit of Rs 25 lakh/ project)  NER/Hilly areas : 25 % (max. subsidy of Rs.33 lakh)  For capital intensive and high value crops under protected cultivation and open air cultivation of date palm, olive and saffron - 25 % (max. subsidy of Rs.50 lakh) – 33 % (max. of Rs.60 lakh) for Scheduled and hilly areas)  Projects covering area above four hectares (above 10 acres) in case of open cultivation, and more than 1000 sq. meter in case of protected cultivation  PHM/Primary Processing related components).  General : 40% (max. limit of Rs 50 lakh/ project)  Hilly and scheduled areas : 55 % (max. subsidy of Rs.60 lakh)  Eligible activities : Production of crops, seed, nursery, biotechnology, tissue culture, bio-pesticides, processing, market yard, ancilliary industry, agri-clinics, consultancy services, etc.

18  Production and supply of planting material – Small nurseries (1 ha – plants per year) – 50 % subsidy with ceiling of Rs.2 lakhs  Setting up of value addition and processing unit Subsidy of 25 % of the project cost subject to a maximum of Rs.50 lakh NMPB – National Mission on Medicinal Plants

19  Area expansion for select species  Species in CITES list (16 sp.) – 75 % subsidy  Critical species (32 sp.) – 50 % subsidy  Other species (45 sp.) – 20 % subsidy  Back ended credit linked subsidy  Min. bank loan for individuals – 20 % NMPB – National Mission on Medicinal Plants

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