It is well known that the small
farmers do not have the economic strength to retain the produce with themselves 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 Yojana, a capital
investment subsidy scheme for construction / renovation of rural godowns was introduced in 2001-2002.
The main objectives of the scheme
include creation of scientific storage capacity with allied facilities in rural
areas to meet the requirements of farmers for storing farm produce, processed
farm produce and agricultural inputs; promotion of grading, standardization and
quality control of agricultural produce to improve their marketability;
prevention of distress sale immediately after harvest by providing the facility
of pledge financing and marketing credit; strengthen agricultural marketing
infrastructure in the country by paving the way for the introduction of a national
system of warehouse receipts in respect of agricultural commodities stored in
such godowns and to reverse the declining trend of
investment in agriculture sector by encouraging private and cooperative
sectors to invest in the creation of storage infrastructure in the country.
The project for construction of
rural godowns can be taken up by individuals,
farmers, groups of farmers/growers, firms, non-Government organizations (NGOs),
Self Help Groups(SHGs),
companies, corporations, co-operatives, federations and agricultural produce
marketing committees in the country.
Under the scheme, the entrepreneur
will be free to construct godown at any place, as per
his/her commercial judgment except that it should be outside the limits of
Municipal Corporation area. Rural godowns constructed
in the food parks promoted by the Ministry of Food Processing Industries shall
also be eligible under the scheme for assistance.
Capacity of a godown
shall be decided by an entrepreneur. However, Subsidy under the scheme shall be
restricted to a capacity of minimum 100 tonnes and
maximum 30,000 tonnes. Rural godowns
of smaller size upto 50 tonnes
capacity will also be eligible for subsidy under the scheme as a special case
based on viability analysis. In hilly areas, rural godowns
of smaller size upto 25 tonnes
capacity will also be eligible for subsidy.
for Scientific Storage
built under the scheme shall be structurally sound on account of engineering
considerations and functionally suitable to store the agricultural produce. The
entrepreneur may obtain a licence to operate the godown, if required by the State Government concerned,
under the State Warehousing Act or any other relevant laws. The rural godowns of 1,000 tonnes capacity
and more should get accreditation from Central Warehousing Cooperation (CWC).
Subsidy under the scheme is linked
to institutional credit and will be available to only such projects as are
financed by commercial banks, Regional Rural Banks, state cooperative banks (SCBs), State Co-operative Agricultural and Rural
Development Bank (SCARDBs), Agricultural Development
Finance Companies (ADFCs), North Eastern Development
Finance Corporation (NEDFI), Urban Cooperative Banks etc. Loan to the
entrepreneurs from banks for the construction of godowns
would carry an adequate long-term repayment period.
Assistance under the scheme shall be
available on capital cost of construction of godown
including the cost of allied facilities like boundary wall, internal road,
platform, internal drainage system, weighing, grading, packaging, quality
certification, warehousing facilities which are functionally required to
operate the godown.
The farmers keeping their produce in
the godown shall be eligible to avail pledge loan on
hypothecation of their produce. The terms and conditions governing pledge loans, rate of interest, period
of pledge, amount etc. will be as per the guidelines issued by RBI/NABARD and
as per normal banking practices followed by the financial institutions.
Rate of subsidy shall be:-
33.33% of the capital cost of
the project for SC/ST entrepreneurs and their cooperatives and in case of projects located in North -
Eastern States, hilly areas subject to a
maximum ceiling on subsidy of Rs.3.00 crores.
25% of the capital cost of the
project to all categories of farmers, agriculture graduates and cooperatives
subject to a maximum ceiling on subsidy of Rs.2.25 crores.
15% of the capital cost of the
project to all other categories of individuals, companies & corporations
etc., subject to a maximum ceiling on subsidy of Rs.1.35 crores.
25% of the capital cost of the
project for renovation of godowns of cooperatives
with assistance from NCDC.
Capital cost of the project for the purpose of subsidy under the
scheme shall be calculated as follows:
up to 1000 tonnes capacity - project cost as
appraised by financing bank or actual cost or Rs.3500/- per tonne
of storage capacity, whichever is lower;
exceeding 1000 tonnes capacity - project cost as
appraised by bank or actual cost or Rs.1500/- per tonne
of storage capacity, whichever is lower.
Subsidy shall be released through NABARD for projects
financed by commercial, cooperative banks and RRBs.
It will be kept in the Subsidy Reserve Fund Account of the financing bank and
shall be tax free.
*Joint Director, PIB, Chennai
With inputs from the
Ministry of Agriculture.