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PPP NODAL OFFICERS’ WORKSHOP
STATUS IN THE
DEPARTMENT OF AGRICULTURE & COOPERATION
MINISTRY OF AGRICULTURE
U.K.S. Chauhan
Joint Secretary (Agricultural Marketing) &Agricultural Marketing Adviser
20.09.2007
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Contents
• Salient Features - PPP Cell: Origins and Envisaged Role -Existing Means of Support to PPP Cell
• Potential Areas for Private/ PPP Ventures in Agriculture
• PPP in Extension Services
• PPP in Seed Sector
• Encouragement to PPP through Market Reforms - Provisions of
Model APMC Act
• Programmatic Initiatives based on Reforms – New Schemes,
Modern Terminal Markets, Agri-Marts etc.
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Salient Features
• Large investment required in service and marketing infrastructure inagriculture and allied sector
• Ministry of Agriculture has adopted various mechanisms to promotePPPs in key areas
• Private partners include corporate sector, NGOs, SHGs,
cooperatives and individuals
• Ministry’s support includes equity participation, venture capitalassistance, subsidy for capital investment, providing access to database etc.
• Private involvement includes investment in infrastructure, delivery of services, providing inputs etc.
• No project taken up by MoA under VGF Scheme of MoF.
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PPP Cell: Origins and Envisaged Role
• PPP Cell in the Department of Agriculture & Cooperation has beenset up in the National Institute of Agricultural Marketing (NIAM),Jaipur
• Mandate of PPP Cell is not clearly defined and needs to bereviewed
• Various Divisions of the Department consult NIAM in relevantmatters while formulating policies and projects
• PPP activities have been mainly promoted in the Department in –
– Agricultural Extension Services
– Production of seed
– Agricultural Marketing
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Existing Means of Support to PPP Cell
• Budgetary support exists under various Schemes of the Departmenthaving scope of PPP activities
• NIAM has not been provided with any staff or funds for managingPPP Cell
• NIAM has capability to generate its own resources for running thePPP Cell
• NIAM has a professionally qualified faculty headed by a JointSecretary level Director General
• Inter-Ministerial or Inter-Divisional coordination is managed by theAgricultural Marketing Division in DAC.
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Potential Areas for Private/ PPP Ventures
§ Primary Value Addition Centres/ Aggregation Centres for clusters of
4-6 villages
§ Mandi modernization in PPP mode
§ Outsourcing mandi operations for professional management
§ Cold chain for perishables all along the value chain
§ Manufacturers/ Processors/ Exporters/ Retail suppliers may
participate in contract farming/ buy-back arrangements
§ Food safety & Quality Control Testing, Grading & Certification
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Potential Areas for Private/ PPP Ventures
§ Modern Terminal Markets near urban centre with back-end
Collection Centres
§ Direct Markets / District Marts/ Agri-Marts/ Agri-Clinic & Agri-
Business Centres
§ Specialized Commodity markets
§ NHM clusters as green corridors
§ Bulk storage infrastructure with bulk handling
§ Perishable Cargo Centres for export
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Potential Areas for Private/ PPP Ventures
§ Dairy sector infrastructure
§ Livestock, meat, fish market infrastructure
§Modern slaughter houses/abattoirs
§ Food processing infrastructure
§ Private extension/ Marketing intelligence/ Farm Schools
§ Rural internet service centers for agri-marketing services/
e- trading
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PPP in Extension Services• Under Extension Reforms Scheme, non-governmental agencies are
involved through extension work plans prepared by ATMAs and approvedby IDWG at State level
• 10% allocation on recurring activities under the Scheme at District level isused through non-government sector
• Partnering is generally through ATMAs set up in the Districts (alreadyfunctioning in 326 Districts) – to be expanded to all Districts in near future)
• Non-governmental agencies include SHGs/ FOs, NGOs, corporates, agri-entrepreneurs, input suppliers etc.
• PPP activities involve conduct of frontline demonstration, field trials, farmschools, training programmes, exhibitions and fairs, technologydissemination etc.
• Farm schools are hosted by achiever farmers or others who are providedservice charges @ 10% of the total cost.
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PPP in Seed Sector
• New Scheme launched during X Plan to provide assistance for seed
production in private sector
• Credit-linked back-ended investment subsidy @ 25% is provided up toRs.10 lakh per unit on seed infrastructure development
• Private companies, individuals, SHGs and seed cooperatives are eligiblefor subsidy
• Seed infrastructure includes cleaning, grading, processing, treatment,packaging, storage and testing facilities
• 94 Private projects have been approved for a capacity of 1.83 lakh tonesof seed by 31st July, 2007
• Under National Food Security Mission for Wheat, Rice and Pulses,assistance cap is proposed to be increased to Rs. 25 lakhs
• Private sector is also proposed to be made eligible for seed distributionsubsidy at par with public sector agencies.
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Encouragement to PPP through Market Reforms
Provisions of Model APMC Act
§ PPP in management & extension activities/ Promotion of e-trading
§ Encouraging professional management in APMCs
§ Provisions for Contract Farming
§ Establishment of Private markets/ Farmer-consumer markets/Direct marketing
§ Setting up of State Marketing Extension Cells/ State AgriculturalProduce Standards Bureaus.
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Status of APMC Act AmendmentsReportedly no Amendment Needed –
• Tamil Nadu ?
Partially Amended –
• Haryana (Only Contract Farming) &
• NCT of Delhi (Only Direct Marketing)
Amendment Bills under activefinalization –
• Jharkhand, Uttarakhand, West Bengal,
NCT of Delhi & Puducherry
Remaining States –
• Haryana, J&K, Meghalaya & Mizoram
States/ UTs with no APMC Act –
• Bihar (repealed w.e.f. 01.09.2007),Kerala, Manipur and UTs of Andaman& Nicobar Islands, Dadra & NagarHaveli, Daman & Diu & Lakshadweep
States/ UTs having amended Acts –
1. Andhra Pradesh
2. Arunachal Pradesh
3. Assam
4. Chhattisgarh
5. Goa
6. Gujarat
7. Himachal Pradesh
8. Karnataka
9. Madhya Pradesh
10. Maharashtra
11. Nagaland
12. Orissa
13. Punjab/ UT of Chandigarh ?
14. Rajasthan
15. Sikkim
16. Tripura &
17. Uttar Pradesh ??
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PPP in Management Activities
Set up and promote public private partnership inmanagement of the Agricultural Markets
States which have adopted the suggested provision:
• H.P., Karnataka, Nagaland, Sikkim
States which have not adopted it:
• A.P., Arunachal Pradesh, Assam, Chhattisgarh, Gujarat,
M.P., Maharashtra, Orissa, Punjab, Rajasthan, T.N.,Tripura, Uttar Pradesh, UT of Chandigarh
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PPP in Market Extension Activities
To promote Public-Private Partnership in
Extension activities of Market Committee
States which have adopted the suggested provision:
• A.P., H.P., Karnataka, Nagaland, Sikkim
States which have not adopted it:
• Arunachal Pradesh, Assam, Chhattisgarh, Gujarat, M.P.,
Maharashtra, Orissa, Punjab/ UT of Chandigarh,Rajasthan, T.N., Tripura, Uttar Pradesh
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E-trading
To promote and encourage e-trading, market committee mayestablish regulatory system, create infrastructure and
undertake other activities and steps needed thereto
States which have adopted the suggested provision:
• Gujarat, H.P., Karnataka, Nagaland, Punjab, Sikkim, Uttar
Pradesh, UT of Chandigarh
States which have not adopted it:
• A.P., Arunachal Pradesh, Assam, Chhattisgarh, M.P.,Maharashtra, Orissa, Rajasthan, T.N., Tripura
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Private Market / Direct Marketing
Establishment of private market yard anddirect purchase from farmers
States which have adopted the suggested provision:
• A.P., Arunachal Pradesh, Assam, Gujarat, H.P.,
Karnataka, M.P.(can be done under the bye-laws),Maharashtra, Nagaland, Orissa (excluding for paddy/
rice), Punjab & UT of Chandigarh (not for direct
purchase), Rajasthan, Sikkim, Tripura, Uttar Pradesh
States which have not adopted it:
• Chhattisgarh, T.N.
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Consumer/ Farmer Market
Establishment of consumer/ Farmer market
States which have adopted the suggested provision:
• Arunachal Pradesh, Assam, Gujarat, H.P., Karnataka,
Maharashtra, M.P.(can be done under the bye-laws),Nagaland, Punjab (only enabling provision) Rajasthan,
Sikkim, Tripura, Uttar Pradesh, UT of Chandigarh (only
enabling provision)
States which have not adopted it:
• A.P. (?), Chhattisgarh, Orissa, T.N. (being set up under
Executive Orders)
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Programmatic Initiatives based on Reforms
• Reform-linked central assistance to encourage public/ private investment for
development of marketing infrastructure, common facilities for aggregation & valueaddition of produce and grading/ packaging/ quality certification facilities
• Scheme to set up modern terminal markets under NHM for perishable agriculturalproduce with suitable backward & forward linkages
•
World Bank assisted MACP (5-6 States) and ADB Study for Agri-businessDevelopment Project (2 States)
• Development of post-harvest/ cold chain infrastructure, CA storage facilities,refrigerated transportation by road/ rail, perishable cargo centres at air & sea portsunder NHM
• Expansion of scientific storage facilities in rural areas (Rural Godown Scheme)
• Marketing Information System (AGMARKNET) to facilitate market intelligenceservices and market led extension to encourage demand-driven quality production
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Reform-linked Scheme for
Development of Agricultural Marketing InfrastructureAgricultural Marketing Infrastructure Projects
§ Infrastructure for Collection, Grading, Packaging, Wholesaling, E-trading, MarketOriented Extension, Production Planning etc., including mobile infrastructure(excluding transportation facilities);
§ Infrastructure for Direct Marketing to Consumers/ Processing Units and forSupporting Contract Farming Arrangements between Processing/ Trading Unitsand Farm Producers
Rate of Subsidy
– 25 % of Capital cost of Project – 33.33 % for N-E States, hilly & tribal areas and SC/ST & their cooperatives
Maximum amount of subsidy
– Rs.50 lakh for each project. – Rs.60 lakh in case of NE States, hilly and tribal areas and SC/ST cooperatives – No cap on subsidy to State Agencies
Achievements:
• 2077 Projects sanctioned subsidy through NABARD & 62 through NCDC.
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Construction of Rural Godowns
Credit-Linked Assistance:
§ Launched w.e.f. 1.4.2001 for creation scientific storage facilities to reduce post-harvest losses, prevent distress sale, facilitate credit etc.
§ Subsidy linked to Institutional Credit and available to all Rural GodownProjects of above 50 MT Capacity.
§ For cooperatives subsidy available for renovation of godowns also.
Rate of subsidy:§ 25% of Capital Cost of Project with a ceiling of Rs.37.50 lakh
§ In NE States/ Hilly Areas and for SC/ST, Subsidy is @ 33.33% with a ceiling ofRs. 50.00 lakh
§ For Individuals other than farmers & Companies/ Corporations, subsidy is 15%with a ceiling of Rs. 22.50 lakh
§ Implemented by DMI and subsidy routed through NABARD/ NCDC (for
cooperatives)
Achievements:
§ 15263 Rural Godown projects sanctioned subsidy as on 31.7.07 including12333 by NABARD and 1271 (new) & 1659 (renovation) by NCDC
§ 186.51 lakh tonnes of capacity generated through these projects.
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Concept of Modern Terminal Market Concept of Modern Terminal Market
q Hub-and-Spoke Format: Terminal Market (the hub) to be linked to
number of Collection Centres (the spokes) which would beconveniently located at key production centres to allow easy access to
farmers & provide advisory services to them.
q To provide state-of-art facilities for grading, transportation, storage,
domestic marketing & export at both the hub and collection centres.
q To facilitate aggregation, value addition, integrated cold chain, direct
marketing, transparency in trading & improved price realisation by
farmers
q PE bidding for min. govt. equity support to be awarded work - up to
49% of government equity participation, including State’s contribution
q Mainly to cover perishable commodities (could handle non-perishables
up to 15% & non - F&V perishables also up to 15%).
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Collection Centre
Modern Terminal Market
Producers/ Farmers andtheir Associations
Infrastructure:Washing, grading, sorting, weighment,transport to TM
Services:Collection & Aggregation of produce,Settlement of payment, advisory on inputs,
prices, quality, multi-modal transport
Infrastructure:Packhouse,Quality TestingFacility,Palletisation
Services:Transport (incl.cool chain),Settlement of Payments,Banking, Marketinformation
Electronic Auction
Banking Institution
Storage:Cold Storage,Temperaturecontrolledwarehouse,RipeningChamber
Processor Exporter Wholesaler/ Trader/Retail chainoperator
Direct Selling
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Expected Outcome of MTMs
Farmer’s share is expected to increase to 50 to70% of the consumer price.
Varies from 30 to 50%for perishablesdepending on thelocation, season,demand and supplyetc.
Share of thefarmer in theconsumer price
16000 to 20000 farmers under each terminalmarket.
--Beneficiaryfarmers
Length of the chain of commission agents willsubstantially be reduced with an ideal situation ofeliminating the commission agents completely.
prevalentMultipleintermediaries
Farmer is provided with alternative option oftaking his produce to terminal markets.
prevalentMonopoly ofAPMC Markets
Minimum of 20 collection centers nearer to thefarmers field will be set up. The farmer will havealternative options to supply to the supply chains,processing, export of commodities etc.
poorBackward-forwardlinkages
Setting up of cold storage at each market rangingfrom 2000 to 15000 MT capacity
poorCool chaininfrastructure
Transparent auctions through electronic auctionsystemNon-existingTradetransparency
Expected outcomeBaseline statusParameter
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Key Expectations from the Private Enterprise
q Arrange land for TM & CCs – obtain necessary licences, clearances &
approvals
q Provide envisaged infrastructure at the TM and the CC in the ‘hub- and-
spoke format’
q Establish backward linkage with growers in the catchments area of the
TM through establishing the collection centers
q Progressively involve farmers and their organizations in the operation
and management of the collection centers
q Facilitate direct supply to processing units, retail chains and exporters, in
addition to auction facility via the collection centers and terminal market.
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Key Expectations from the Private Enterprise
q Provide advisory services to farmers on inputs, prices, quality, multi
modal transport and exports.
q Projects should be designed to handle the required minimum quantity of
peak throughput (MT/ day) and yearly handling capacity as prescribed.
q Private enterprise at liberty to
q Prepare own business model with regard to Size of market and
Scale of operation
q Set up additional facilities to provide complimentary services
(input supply, processing, consumer goods etc.)
q Collect user charges for the infrastructure and services provided
q PE shall recover market charges from the users and shall also be free to
fix the charges for non-market services but essential services shall be
provided free of charge to users unless otherwise specified.
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Expectations from the State Government
Regulatory clearances:
q Single license to operate in the entire State/ adjoining States
q Single point levy & collection of market fee
q Autonomy in commercial operations of TM
q Clearance of land use for the TM/ CCs
q Provision of Civic amenities (including drinking water, municipal
waste disposal, police security, post office etc )
q Statutory clearance from
• Local authority
• Town planning & Urban development
• Revenue department
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Expectations from the State Government
q Play a pro-active role:
Ø Appointment of a Nodal Officer SLEC of under SHM
• for selection of PE through open/transparent bidding process &
execution of OMDA
• to facilitate securing regulatory compliances
• to remove difficulties in operation of the project
Ø Approval of locations for the TM / CCs
Ø Provision of Government land on long term lease, subject to
availability and suitability
Ø Infrastructure support to TM / CCs
• road connectivity, power and water supply etc.• States free to participate in the equity of Project through-
– Direct funding
– Land / infrastructure support
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Role of the Central Government
q Support the project through participation in its equity capital
q Terms for financing:
q Up to 49% of project equity, including contribution from State
q NHM/ State will have the option to allocate its equity to farmers
organisations actively participating in the business of the project
q NHM to finally approve the bidder on recommendation of SLEC of
SHM
q Arrange awareness, panel of FIs & technical support to States
through NIAM
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Progress of Terminal Market Scheme in Various States/ UTs
Expected
soon
IL & FS
Infrastructure
Dev. Corp.
Ltd. Selected
Available (50
Acres)
PatnaBihar 4.
Jalandhar
IdentifiedMuktsar IdentifiedHoshiarpur
Optional for PE to
arrange land –
Last date for applications was
extended up to
05.09.07
1-7-07IdentifiedLudhianaPunjab3.
--do--10 Acres of land
is available
Indore
Pre-bid
Conference
arranged
25-5-07, 26-5-
07 & 11-6-07
Corrigendumissued on
16.07.07 &
04.08.07
Selected40 Acres of land
is available
BhopalM.P.2.
Four Agencies
short-listed – RFP
Notice issued
20.01.07Yes BankAvailable Near
Sector 39 (W);
42 Acres of Land
Chandigarh,UT of
Chandigarh
1.
Date ofpublishingNotice for
Technical &
Financial Bids(RFP)
Date ofpublishingNotice forEOI (RFQ)
Whether FIappointed for
hand-holding, give
name
Whether Govt.Land is
Available or PEto arrange land
IdentifiedLocations
StateSN
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Progress of Terminal Market Scheme in Various States/ UTs
Nagpur
Tirupati
Visakhapatnam
Expected
soon
Under processLand of APMCJaipur Rajasthan8.
Coimbatore
Madurai
Under
approval of the
Government
PE to arrange
land
ChennaiTamil Nadu7.
IdentifiedNashik
Expected
soon
Identified (100
acres)
MumbaiMaharashtra6.
Nodal Agency
changed from
AM to Horti.
Deptt. & back
IdentifiedHyderabadAndhra
Pradesh
5.
Date ofpublishingNotice for
Technical &Financial Bids
(RFP)
Date ofpublishingNotice forEOI (RFQ)
Whether FIappointed forhand-holding,
give name
WhetherGovt. Land isAvailable or
PE to arrangeland
IdentifiedLocations
StateSN
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Progress of Terminal Market Scheme in Various States/ UTs
Channapatna
Sambalpur
NIAM
engaged for
feasibility
study by Hort.Deptt
IdentifiedBerhampur
Proposed for
NDDB
100 acre land
available
Hassan
Hubli
Expected
soon
Bijapur Karnataka9.
Cuttack
Orissa10.
Date of
publishingNotice forTechnical &
Financial Bids(RFP)
Date of
publishingNotice forEOI (RFQ)
Whether FI
appointed forhand-holding, give
name
Whether Govt.
Land isAvailable or PEto arrange land
Identified
Locations
StateS
N
UP & Gujarat have also become recently eligible
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Agrimart - MACP Model (World Bank)
• Hub and spoke approach - Command area of hub and spoke would be
site specific
• At the hub –
– Post harvest activities including sorting, grading, packing etc
– Market facilitation – acting as an aggregator of goods for Mandi,
Processors, organized retailers, Terminal markets etc.
• Activities at the spoke –
– Agri Input retailing
– Equipment hiring – Crates, Machinery
– Market led extension services through ATMA – Financial services facilitation – credit, insurance etc.
• Management –
-- Agri-Marts would be initially operated by a local SME and as the
project matures they may be managed by producer organizations.
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Design of Agri-Mart
P roduce rG r oups
n Fa rm ers /P r o d u c e r sm ob i l ise d ing r o u p s
Agr i -Ma r t
n V a l u e - a d dse rv ices
n S a l e s a n dm arke t ings u p p o r t
n Produc t ion
and t ra in ingass is tance
Buye r s
n L o c a lm ark e t
n Dis t r ibu to rs
n P r o c e s s o r s
n Su pe rm arke ts
n E x p o r tm ark ets
P roduceVa lue -AddedP roduce
• Inputs
• Capac i t ydeve l opm en t
• Cred i t &I
M arketinform at ion
& M arketS i gna l s
Source: Presentation by World Bank on Agri-Mart
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Ø Crops Directorates (8) [Wheat, Jute,Cotton, Rice, Sugarcane, Millets,Pulses, Tobacco]
Ø Technology Mission on Horticulture
Ø Coconut Development Board
IFFCONetwork
AreaOffice
AreaOffice
Ø Automatic DataDownloading
Ø Data validation
Ø Database updation
Ø Trend Analysis
Ø Monitoring Reports
Ø Commodity profiles forproduction planning
Ø Data Warehouse & DataMining
Ø GIS based NationalAtlas
Kiosk
DMI Hqs.
AGMARKNEThttp://agmarknet.nic.in
AreaOffice
Farmers
>2800Markets
DMI StateOffices(27)
IFFCO
LocalNewspapers
NoticeBoard /ElectronicBoard
RegionalOffice
RegionalOffice
RegionalOffice
IFFCONetwork
CDB
CDBNetwork
Farmers
Call Centres
Agri-clinics
MobileOperators
farmers
State Mkts./Directorates
(50)
Regional Portals(8 alreadyapproved)
FarmingCommunity
Public Access
Mobile
user s
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Agency Expected Benefit
q Mobile Phone Operators Access to millions of subscribers/Kisan Call Centre
q IFFCO/ Co-operatives Access to farmersCommodity Exchanges
q Krishi Vigyan Kendras Market led extension to farmers
q IT Kiosks / Common Harnessing technology to reach ruralService Centres masses
q Doordarshan/ AIR Price dissemination
q Newspapers/ Periodicals Price dissemination
Agencies for Strategic Alliance in Agmarknet
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Thank you (For any further information please contact me at