Scheme for Creation of Infrastructure for Agro Processing Clusters (APC) — MoFPI Guidelines

The Scheme funds the creation of modern infrastructure that encourages entrepreneurs to set up food processing units on a cluster approach, in areas of horticulture and agriculture production identified through a mapping exercise. The purpose is to reduce loss of surplus produce, add value to horticultural and agricultural output, raise farmer incomes and create local employment.

The Three Stated Objectives

• •To create modern infrastructure for food processing closer to production areas.
• •To provide integrated and complete preservation infrastructure from farm gate to the consumer.
• •To create effective backward and forward linkages by linking groups of producers and farmers to food processors and markets through a well-equipped supply chain.

What a Cluster Must Contain

• •At least 5 food processing units with a minimum aggregate investment of ₹25 crore. These may be set up by the promoters and associates of the PIA, or by other entrepreneurs.
• •Units are to be set up simultaneous to the creation of core infrastructure — not after it.
• •Core infrastructure must match either the requirement of the units proposed, or the raw material available for processing in the area.
• •Permitted industries are those making food products fit for human and animal consumption, except alcoholic products. Preference goes to projects proposing preservation or processing of perishable food products.

Three Routes by Which a Cluster May Be Developed

• •Promoters willing to set up their own units in the cluster and allow other units in the area to use the common infrastructure; or
• •Promoters willing to develop common infrastructure for use by units set up by other entrepreneurs; or
• •Promoters willing to develop common infrastructure in an existing food processing cluster.

Eligible Entities

An Agro Processing Cluster project may be set up by an entity or organisation such as a Central or State PSU, Joint Venture, NGO, Cooperative, Self Help Group (SHG), Farmer Producer Organisation (FPO), Farmer Producer Company (FPC), public or private sector company, Limited Liability Partnership, partnership firm or proprietorship firm.

Proposals are treated as falling in the SC/ST category only where SC or ST promoters hold at least 51% stake in the entity.

Land — the Threshold Requirement

• •The extent of land depends on the PIA's business plan, but at least 10 acres must be arranged by the PIA, either by purchase or on lease of at least 50 years.
• •Vertical setting up of projects or units may be considered in cities where land availability is less. In urban areas, 5 acres in lieu of 10 acres may suffice, on similar lease terms.

Where Preference in Sanction Is Given

• •Clusters set up in agri-horti clusters identified by Central or State Governments — DAC&FW under MIDH, APEDA and the like (indicative list at Appendix-I).
• •Export-oriented agro-processing clusters aligned with the clusters identified by the Department of Commerce in the Agri-export Policy 2018 (Appendix-II).
• •Clusters set up by a State Government or its entities on PPP mode.
• •Clusters in the Fisheries Sector notified under the Pradhan Mantri Matsya Sampadha Yojana (Appendix-III).

What Counts as a Difficult Area

For this Scheme, Difficult Areas are the North-Eastern States including Sikkim, the States of Uttarakhand and Himachal Pradesh, the Union Territories of Jammu & Kashmir and Ladakh, State-notified ITDP (Integrated Tribal Development Projects) areas, and the Islands (UTs of Andaman & Nicobar and Lakshadweep).

Items Ineligible for Calculation of Grants-in-aid

Dovetailing with Other Schemes

The guidelines expressly permit a PIA to dovetail assistance available under other Central or State Government schemes to improve project viability, subject to one condition: no duplication of assistance for the same component or activity.

Fee and Performance Security

• •Non-refundable fee of ₹20,000, by Demand Draft. Reduced to ₹15,000 for SC/ST applications.
• •On selection, refundable bank guarantee as Performance Security for 5% of eligible grants-in-aid, valid up to 36 months, within 30 days of approval.
• •Ministry forfeits or encashes BG in the event of falsification, non-compliance, project cancellation, or non-completion.

Filing

All applications are filed online on the SAMPADA Portal (https://www.sampada-mofpi.gov.in). No physical application is accepted. Every page must be self-attested.

Documents Required

• •Detailed Project Report (DPR) with project profiles, means of finance, unit details, etc.
• •CA / Statutory Auditor certificate of net worth (per Appendix-IV).
• •CA / Statutory Auditor certificate in the Appendix-V format showing basic cost and GST separately.
• •Final term loan sanction letter and scheme-specific Detailed Appraisal Note.
• •Incorporation proof, PAN, TAN, SC/ST certificate as applicable.
• •Duly registered land documents (ownership or 50+ years lease).
• •OEM quotations for plant, machinery and equipment.
• •Breakup of basic cost and taxes shown separately.

1. 1EOI and online filing: Ministry invites proposals via Expression of Interest on the SAMPADA Portal.
2. 2Technical Committee scrutiny: Technical Committee (TC) checks eligibility. Eligible proposals are scored on Annexure-I criteria.
3. 3The qualifying bar: Proposal must score at least 60% on the Annexure-I sub-total (85 marks) — 45% for SC/ST.
4. 4Rejection and appeal: Rejected proposals are notified with reasons. Appeal to PAC is open within 30 days.
5. 5PAC consideration: Eligible proposals go to the Project Approval Committee. Promoters make a presentation before PAC.
6. 6Merit list and approval: Final merit list is based on combined TC and PAC marks. Approval letter sets out approved grant.
7. 7BG and Acceptance: Within 30 days, applicant submits Acceptance Letter (Annexure-II), notarised Affidavit (Annexure-III), and 5% BG to become Project Implementing Agency (PIA).

Scoring Grid Summary

Land Possession (max 35 marks): Complete title/possession/allotment + CLU = 25 marks; without CLU = 15 marks; Agreement to sale = 5 marks; Utility connections (water/power) = 10 marks. Setting up units (max 10 marks): Perishable raw material units = 2 marks per unit (max 10); Non-perishable raw material units = 1 mark per unit (max 5). Viability of Cluster (max 5 marks): In identified cluster = 5; within 50 km = 3; outside = 2. PIA Net Worth (max 15 marks): >2x equity = 15; 1.5x to 2x = 10; 1x to 2x (SC/ST) = 10. Promoter Qualification (max 5 marks): Degree in food tech/science = 5; Diploma = 3. DSCR (max 5 marks): DSCR >= 3.0 = 5; 2.5 to 3.0 = 3; 1.5 to 2.5 = 2. Special Strength (max 10 marks): Aspirational District = 5; Renewable energy >= 10% load = 5. Technical presentation before PAC (max 15 marks): Business model (10) + Implementation schedule (5).

Implementation Timeline

Completion and operationalisation is due 24 months from approval in General Areas, and 30 months in Difficult Areas. Condonation/extension up to 6 months at a time.

Instalment Schedule

Key Milestone Triggers

• •1st Instalment triggers: 100% equity and 50% term loan spent on land/project, 5% BG submitted, site inspection by PMA/Ministry, separate bank account opened.
• •2nd Instalment triggers: 1st instalment utilised, remaining 50% term loan spent, cumulative spend at least 60% of basic infrastructure and 40% of core facilities, at least 5 units have started civil construction.
• •3rd Instalment triggers: project completed, 2nd instalment utilised, all 5 units set up and commercial operations commenced, joint inspection by PMA/Ministry.

Delay and Recall Penalty

• •Delay beyond milestones without condonation attracts a 1% per month reduction in the eligible grants-in-aid.
• •If the PIA fails to execute the project or withdraws, MoFPI will recall the entire released grant with 10% interest per annum, and the 5% bank guarantee is encashed.