Development of food processing industry in the country is accorded top priority by the Government of India as it is one of the most critical links in the agri value chain. Taking this agenda further, the Finance Ministry, in 2014, announced setting up of a Special Fund of Rs. 2,000 crore in NABARD for providing direct term loans at affordable rates of interest to Designated Food Parks (DFPs) and food processing units in the DFPs.
The objectives of the Fund are:
- To provide impetus to development of the food processing sector on a cluster basis in the country
- To reduce wastage of agricultural produce
- To create employment opportunities especially in rural areas.
Scope of Financing from the Fund
The Fund provides Term loans for:
- Development/establishment of all infrastructure required in the DFPs
- Augmentation/modernization/creation of additional infrastructure in the DFPs
- Setting up of individual food processing units or any other unit that is established for supporting the operations of the food processing units within the DFPs; and
- Modernization of existing processing units in the DFPs resulting in process technology upgradation, automation, increased efficiency, improvement in product quality, reduction in costs, etc.
The following entities are eligible from the Fund for term loan assistance from NABARD:
• State Governments
• Entities promoted by State Governments or Government of India
• Joint Ventures
• Special Purpose Vehicles (SPVs)
• Federations of Cooperatives
• Farmers’ Producer Organizations
• Entrepreneurs etc