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 2007-082008-092009-10 AreaProductionAreaProductionAreaProduction Fruits5.9865.76 6.10 68.47 6.33 71.52 Vegetables7.84 128.447.98129.077.99133.74 Spices2.614.352.624.142.464.02 Plantation Crops3.19 11.303.2111.333.2711.93 Flowers0.160.860.160.980.181.02 Others0.390.490.430.530.430.53 Total20.20211.2320.66214.7120.88223.09 ( 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) 2005-064481 2006-075266 2007-085910 2008-096045 2009-106407 2010-116610 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 – 60-70000 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