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Maharashtra Agribusiness Network Project

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Matching Grant Under Output 2 Component of The MAGNET Project

The Government of Maharashtra in association with the Asian Development Bank (ADB) is co-financing Maharashtra Agribusiness Network Project (MAGNET) to upscale the development of horticulture sector and agribusiness in Maharashtra. The project core objectives are to increase farmers’ income, support value addition, reduce post-harvest losses, increase farm productivity and mainstream opportunities for rural women lower caste to alleviate rural poverty. The project aims to focus on 15 targeted horticulture value chains which includes, Banana, Pomegranate, Orange, Sweet Orange, Custard Apple, Guava, Sapota, Strawberry, Okra, Chilly (Green & Red), Flowers, Mango, Lemon, Cashew Nut and Snake Gourd.

As part of Output 2 of the project, the MAGNET society will provide matching grants to Farmer Producer Organizations (FPOs) and Value Chain Operators (VCOs) (hereafter referred to as “beneficiary organization”) to finance eligible subprojects up to 60% of the approved eligible project cost to improve post harvest practices. The remaining amount will be made available by beneficiary in the form of beneficiary contribution based on cost sharing percentages as agreed in the matching grant agreement.

A) Guidelines for matching grant along with eligibility criteria

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1. Eligible Crops:

Primary Condition for Application - Subprojects that facilitate value addition, post-harvest management, preservation and marketing of one or group of the following horticulture crops:

Sr. No. Horticulture Crops
1. Banana
2. Pomegranate
3. Orange
4. Sweet Orange
5. Custard Apple
6. Guava
7. Sapota
8. Strawberry
9. Okra
10. Chilly (Green & Red)
11. Flowers
12. Mango
13. Lemon
14. Cashew Nut
15. Snake Gourd

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2. Eligible Organizations:

  1. Farmer Producer Organizations (FPOs) is farmers organizations registered under Company Act, State Co-op Societies Act, Farmer Groups promoted by ATMA / Cluster Level Federations (CLFs) promoted by MSRLM / Community Managed Resources Centers (CMRCs) promoted by MAVIM also including FPO Federations / Associations)
  2. Value Chain Operators (Non FPO Entities) which may include aggregators / processors / exporters / mid and large size retail organizations / Ag-tech or Fin-tech organizations working actively with producers and their collectives of any horticultural commodities.

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3. Eligibility Criteria Of Farmer Producer Organization

  1. Legally registered FPOs- Farmer Producer Companies, Farmer Cooperative Societies, and other Producer Organizations (Legal Entities) also including FPO Federations / Associations. If FPO is not a legal entity then at the time of application, it should apply for legal registration and should be legally registered at the time of grant agreement.
  2. FPO should be a legally registered entity, with audited books of Accounts (audited by a Chartered Accountant) for at least 1 year.
  3. FPO should not have been declared as Non-Performing Asset (NPA) by Bank / FI due to past loan default.
  4. FPO should not have any significant adverse audit observations in its previous annual audits.
  5. Minimum shareholding of FPO should be 250 producers. However, for Associations / Federations minimum shareholding of 10 institutional members with an aggregate shareholder base of minimum 2000 producers.
    Exception: For Community Managed Resource Centers (CMRCs) and Women-owned or Women-led FPO Federations, minimum shareholding should be 10 institutional members or 10 Self Help Groups with an aggregate shareholder base of minimum 2,000 members.
  6. At least 60% of applicant FPO’s shareholders should be involved in production of one or more of the targeted crops and collectively have considerable production within their catchment zone. This should be backed by crop-wise data in the catchment area indicating source of data.
    Exception: CMRCs and Women-owned or Women-led FPOs should work in the crop clusters identified in the MAGNET project and / or are involved in the production and marketing of the targeted crops.
  7. FPO should have turnover of more than Rs. 5.00 Lakh in at least one audited financial statement in last three years.
    For legally constituted FPO Federations / Associations - Aggregate / Collective Turnover of minimum Rs. 25.00 Lakh in at least one audited financial statement in last three years.
    Exception: For CMRCs and Women-owned or Women-led FPO Federations aggregate / collective turnover of minimum Rs. 5.00 Lakh in at least one audited financial statement in the last three years.
  8. Applicant should have own equity of minimum 20% of the project cost.
    Exception: For CMRCs and Women-owned or Women-led FPO / FPO Federations should have own equity of minimum 5 % of the project cost.

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4. Eligibility Criteria of Value Chain Operators

  1. Eligible applicant can be Public Ltd. Company / Pvt. Ltd. Company / Limited Liability Partnership / Corporate Entity / Proprietorship Firm / Partnership Firm.
  2. Applicant should be a legally registered entity, with audited books of accounts (audited by a Chartered Accountant) for at least 3 years.
  3. Only Applicants having at least 3 years of experience in Aggregation and Storage / Processing / Marketing and / or Exports of listed crops and / or other horticulture crops will be eligible. However, preference will be given to those VCOs who have been engaged with targeted horticultural crops of the project.
    Exception: Central / State Government recognized Agri Start-ups or Ag-tech companies having demonstrated at least 1 year experience in Aggregation and Storage / Processing / Marketing and / or Exports of any horticulture commodities may be considered.
  4. Applicant should have established backward linkages with primary producers / FPOs which are involved in production and / or primary processing of listed crops and / or other horticulture crops will be eligible. However, preference will be given to those VCOs who have been engaged with targeted horticultural crops of the project.
  5. Applicant should not have been declared as Non-Performing Asset (NPA) by Bank / FI due to past loan default.
  6. Applicant should not have any significant adverse audit observations.
  7. Applicant should have turnover of more than Rs. 50.00 Lakh in at least one audited financial statement in last three years.
    Exception: Central / State Government recognized Agri Start-ups or Ag-tech companies should have turnover of more than Rs. 10.00 Lakh in audited financial statement of last year.
  8. Applicant should have own equity of minimum 20% of the project cost.
  9. Net worth of the applicant should not be less than 1.5 times of grant sought in their proposed project. Net worth of the applicant available on the date of submission of Detailed Project Report will be considered.

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5. List Of Eligible Components:

(List is only illustrative and not exhaustive and any other components not explicitly mentioned under list of eligible components may or may not be approved by MAGNET Society. Final decision in this regard will be that of MAGNET Society only)

Sr. No. Eligible Components

a.

Technical Civil works (to house Core Plant & Machinery and other equipment)

b.

Pack-house

c.

Cold Storage Unit(s)

d.

Integrated Pack-house (with mechanized sorting & grading line / packing line / waxing line / washing and drying line / staging cold rooms, etc.)

e.

Ripening Chamber(s)

f.

Controlled Atmosphere (AC) storage

g.

Frozen Storage / Deep freezers

h.

IQF line, Tunnel Freezer, Spiral Freezer, Blast Freezer, Plate Freezer

i.

Vacuum Freeze Drying

j.

Processing Infrastructure –

  • Sorting, grading, washing, peeling, cutting, sizing;
  • Blanching, crushing, extraction, pulping, juicing;
  • Deseeding, color sorting, pulverization, extrusion, freeze drying / dehydration, frying, etc.
  • Packaging facilities like canning, aseptic packaging, vacuum packaging, bottling, edible packaging, labeling, any other specialized packaging etc.

k.

Pre-Cooling Unit(s)

l.

In-house product testing laboratory

m.

Any other modern technology for temperature-controlled storage, processing, value addition and preservation infrastructure as may be approved by MAGNET Society.

n.

Reefer transport

o.

Retail refrigerated carts; temperature controlled solar powered retail carts.

p.

Controlled temperature / Ventilated trucks with or without raking;

q.

Crates, rakes etc;

r.

Mobile pre-coolers

s.

Appropriate storage facility cum Distribution Center at market level.

t.

Retail outlets with facilities such as frozen storage / deep freezers / refrigerated display cabinets / cold room / chillers, etc.

u.

Creation of e-market.

x.

Preliminary and Pre-operative Expenses

  • Stamp duty and registration fee for registered land lease deed for subproject
  • Cost of detailed project report and estimates etc. prepared for the proposed subproject.
  • Managerial support for the prescribed subproject completion period.
  • Expenditure incurred for MAGNET Project related meetings of the Director / Manager in connection with the subproject development.

y.

Utilities, Material Handling Equipment, Accessories and other eligible components (required as supporting infrastructure to main facility). These will not be eligible as standalone component or for upgrading of any existing facilities.

  • Electrification
  • Essential Power Back-up
  • Renewable / alternate energy technologies (solar, biomass, wind etc.) for the project.
  • Material handling equipment’s and systems like fixed racking system in Cold / AC storage, forklifts, reach trucks, bins, pallets, dock levelers, etc.
  • Supporting equipment like ETP, Waste Disposal system, Boiler, CIP unit, Water Treatment Plant, Fire-fighting systems etc.
  • Toilets, Septic tank and drainage
  • Any other accessories / equipments as may be approved by MAGNET Society

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6. List Of Ineligible Components:

Following components are ineligible (List is only illustrative and not exhaustive and any other components not explicitly mentioned under list of eligible components may or may not be approved by MAGNET Society. Final decision in this regard will be that of MAGNET Society only)

  1. Non-technical civil works like
    1. Administrative Office,
    2. Approach Road / Internal Roads
    3. Compound wall
    4. Cost of land
    5. Site development
    6. Canteen
    7. Labour rest room
    8. Quarters for workers
    9. Security guard room
  2. Margin money, working capital and contingencies
  3. Secondhand / old machineries
  4. Reconditioned and refurbished plant & machinery.
  5. AC ducting
  6. Fuel, Consumables, Spares and Stores
  7. Non-Temperature Controlled Transport vehicles
  8. Stationery items
  9. All types of service charges, carriage and freight charges, etc.
  10. Flycatchers, handwasher, laundry etc.

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7. List Of Ineligible Subprojects As Per Adb’s Safeguard Policy Statement

  1. Subprojects that are on the ADB’s Prohibited Investment Activities List (PIAL) per Safeguard Policy Statement 2009. The exclusion list supports the proper execution of the Environmental and Social Risk Assessment Procedure. The MAGNET Society will not provide financial assistance, invest in, lend to, or engage in harmful activities to the environment, harmful or dangerous to people or communities. In particular, the following activities will not be supported:
    1. Any activity classified category “A” and / or “B” for
      1. involuntary resettlement, and “A” for
      2. indigenous peoples in accordance with ADB’s safeguard policy statement.
    2. Any activity classified environment category A, and environment category B if classified receptor sensitive e.g. fall under Exclusion list provided in this ESMS.
    3. Production or activities involving harmful or exploitative forms of forced labor or child labor.
    4. Production or trade in any product or activity deemed illegal under the Indian laws or regulations or international conventions and agreements, or subject to international phase outs or bans, such as
      1. pharmaceuticals, pesticides, and herbicides,
      2. ozone-depleting substances,
      3. polychlorinated biphenyls and other hazardous chemicals,
      4. wild life or wild life products regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora, and
      5. trans boundary trade in waste or waste products.
    5. Production of or trade in weapons and munitions, including paramilitary materials.
    6. Production of or trade in alcoholic beverages, excluding beer and wine.
    7. Production of or trade in tobacco.
    8. Loans associated with individual gambling, casinos and equivalent enterprises.
    9. Production of or trade in radioactive materials, including nuclear reactors and components thereof.
    10. Production of, trade in or use of unbonded asbestos fibers.
    11. Commercial logging operations or the purchase of logging equipment for use in primary tropical moist forests or old-growth forests.
    12. Marine and coastal fishing practices, such as large-scale pelagic drift net fishing and fine mesh net fishing, harmful to vulnerable and protected species in large numbers and damaging to marine biodiversity and habitats.
    13. Mining activities.
    14. Activities involving genetically modified organisms.
  2. Subprojects that involve involuntary resettlement as defined under ADB SPS, including physical or economic displacement due to involuntary land acquisition or involuntary restriction on land use.
  3. Subprojects that have adverse impacts on indigenous people (Scheduled Tribes)
  4. Subprojects located in any eco-sensitive zone and or within 500 mts from any national heritage zone / structure.
  5. Activities that do not comply with ADBs safeguard policy.
  6. Subprojects classified as Environment Category ‘A’ and Environment Category ‘B’ in accordance with ADB’s safeguard policy statement, using Environmental Checklist.

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8. Eligible Project Cost

The eligible project cost will be calculated considering the following:

  1. The cost of technical civil, plant & machinery including GST.
  2. The cost of utilities, material handling equipment, accessories and other eligible components etc. as mentioned above in the list of eligible components will be considered under eligible project cost subject to maximum limit of 25% of the total project cost.
  3. Preliminary and Pre-operative Expenses –
    The Preliminary and Pre-operative Expenses will be eligible up to 5 percent of the eligible project cost subject to a maximum limit of Rs. 20 lakhs.
    Following components shall be considered under Preliminary and Pre-operative Expenses.The Project Implementation Support Consultant will appraise and evaluate the components of the Preliminary and Pre-operative Expenses or any other required components and submit its appraisal to the Technical Committee which will recommend it to the Sanctioning Committee.
    1. Stamp duty and registration fee for registered land lease for subproject.
    2. Cost of detailed project report and estimates etc. prepared for the proposed subproject.
    3. Managerial support for the prescribed subproject completion period.
    4. Expenditure incurred for MAGNET Project related meetings of the Director / Manager in connection with the subproject development.
  4. Cost of Goods and Services Tax on eligible components.
    However, for grant calculation purpose, the cost norms as determined by MAGNET Society shall be applied while calculating the eligible project cost and grants for all proposals.
    The eligible project cost needs to be supported with estimates of civil work and quotations of plant & machineries.

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9. Pattern of Assistance

The financial assistance available under the project is in the form of Matching Grant. The maximum admissible grant for each approved project will be upto 60% of the eligible project cost, subject to maximum of Rs. 6.00 Crore per project. The disbursement of the matching grants proceeds to the sanctioned beneficiary organization will take place in three installments (mentioned below) and in accordance with the disbursement schedule and will be subject to meeting the necessary conditions.

Payment / Tranche (Phase) Percentage of approved matching grant
First 25%
Second 40%
Third 35%
Total 100%

Detailed disbursement schedule and compliances will be as elaborated in the matching grant agreement.

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10. Project Proposal Selection Criteria:

  1. Only integrated value chain development projects (As determined by Technical Committee / Sanctioning Committee on case-to-case basis.) will be eligible. Stand-alone facilities / component will not be considered for assistance under this scheme.
  2. Proposal should be technically sound and financially viable as well as have satisfactory environmental and social safeguards.
  3. Must adhere to MAGNET’s Environmental and Social Safeguards.
  4. Only Greenfield projects will be eligible.
  5. Projects that do not involve storage / processing / value addition / marketing of at least one of the MAGNET listed crops, will not be eligible.
  6. Minimum 50% applicant’s capacities should be utilized for processing / facilitating services for listed crops produced in project’s catchment zone and / or within the State of Maharashtra. DPR / Proposal of applicants should clearly state the catchment area of the project, production capacity, crop-wise available raw material in the catchment area indicating source of data.
  7. Projects proposing to set up their infrastructure outside Maharashtra will not be considered.
  8. Land title in the name of the applicant or land lease, duly registered with the competent authority for not less than the period of 15 years.
  9. Preference will be given to the projects having Change in Land Use (CLU) permission from the competent authority.
  10. Projects shall confirm to the national and local industrial development plans and shall not include projects that are restricted or prohibited.
  11. All compliances / permissions / documentation / clearances / NOCs / Certificates etc. as required by the concerned departments / authorities of the government against industrial norms, registration of companies (ROC), FSSAI Act, etc.
  12. Submission of all documents which will include among other documents-DPR, Estimates / Quotations, Drawings and Building Plan Sanction, Undertakings etc.

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11. Specific conditions:

  1. Grant will be extended only for projects duly approved by MAGNET Society.
  2. Final selection for assistance to any entity will be based on meeting of eligibility criteria and final discretion of MAGNET Society for approval.
  3. Only projects appraised by Technical Consultant (appointed by MAGNET Society) and approved by MAGNET Society will be given grant sanction.
  4. MAGNET Society may use their sole discretion to reject any project / any specific component that is eligible under specific grant schemes of other institutions like NHB, MOFPI, RKVY, SMART, POCRA, etc. The idea here is to complement the existing schemes and not to compete with them. For e.g. Some stakeholders may be eligible for grant scheme of NHB for stand-alone cold storages. Such SMEs shall not be considered for the same component under MAGNET, unless otherwise allowed by MAGNET Society.
  5. Applicant can avail assistance under this scheme in conjunction with other schemes being implemented by Central Ministries / Departments or State Government. However, no assistance will be provided or the projects that have already been approved / availed Capital Grant Assistance on same components from any other Central Govt. / State Govt. Agencies / Departments.
  6. Not more than one application from the same applicant / company will be entertained. An application will be considered as second proposal if there are cross holdings of the promoter(s) / partner(s) between two applicants / entities.
  7. All equipment / plant & machinery of the project should be new. Reconditioned / refurbished equipment / plant & machinery will not be eligible for grant.
  8. Expansion / upgrading of the existing facility / ies will not be entertained.
  9. The grant will be restricted only to the plant & machinery and technical civil work created after the date of issue of administrative approval order.
  10. During implementation, project promoters will not be allowed to drop / remove / reduce capacity of any item approved for grant. If circumstances may still require such action on behalf of promoter, revised project will be considered / rejected for grant approval only after appraisal by Technical Consultant and approval of MAGNET Society.

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B. Process Flow from application of proposal to signing grant agreement.

Invitation for Matching Grant Applications: In order to invite applications for matching grant (Up to 60% of eligible project cost) under Output 2 component of the MAGNET Project, a two stage system of application is being proposed by MAGNET Society which will include the following:

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a) Stage 1: Expression of Interest (EOI) to screen and shortlist eligible applicants:

As a first step, it is proposed to invite Expression of Interest (EoI) from potential applicant organizations. This will be through publication of advertisement of EoI in the State level newspaper (Both English and Marathi) and on MAGNET and MSAMB website along with prescribed application form. The potential applicants will need to download the prescribed form from MSAMB website after registration. They may also collect the form from concerned Project Implementation Unit, MAGNET Project / Divisional Office, MSAMB. The beneficiary will submit filled application form along with necessary documents in hard copy at the office of respective Project Implementation Unit (PIU). (Copy of application form attached as Appendix I & II). Once application is received, it will undergo 2 levels of assessment by MAGNET Society.

After receipt of the application, respective PIU will scrutinize the applications for eligibility on the basis of eligibility criteria. If an applicant does not meet one or more of these criteria, the same will not be considered for further assessment.

All eligible applications will then be scrutinized for scoring on assessment parameters by the PIU. It will be ensured that equitable distribution among MAGNET focused crops and their targeted districts and inclusion of women led / owned beneficiaries is taken care of. A cumulative score will be arrived at for each applicant at the end of this stage.

Based on the cumulative scores of the applicants received from all 8 PIUs, PMU shall prepare the merit list of the beneficiaries. While preparing the merit list of the proposals receiving equal marks, the applicant having the highest turnover in a financial year (any of the last three years) as per the audit report has been given priority.

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b) Stage 2 - Submission of Detailed Project Report (DPR):

The shortlisted applicants will be invited for submission of Detailed Project Report (DPR) through official communication from MAGNET. The applicant will need to furnish the same as per predefined template along with necessary documents as per document checklist.

The DPR and supporting documents are to be submitted in soft copy format either by (i) email to mg@magnetadb.com or (ii) in pen drive sent to PMU office, PUNE vide Registered/Speed Post.

The DPRs received by PMU will then be technically and financially appraised and evaluated by PISC. For each DPR, eligible project cost and corresponding Matching Grant amount will be apprised and determined by PISC and accordingly PISC will recommend it to Technical Committee of PMU. The proposals will then be placed for review in front of the Technical Committee for technical sanction and subsequently the Governing Council cum Sanctioning Committee for final sanction.

The Project Director, MAGNET will then issue administrative approval order to the projects sanctioned by the Sanctioning Committee cum Governing Council. MAGNET Society will enter into grant agreement with beneficiaries of the sanctioned subprojects. Subsequently, Matching Grant will be released as per terms and conditions of the grant agreement. Monitoring and evaluation of the subproject will be done as per the guidelines of grant agreement and implementation guidelines with the help of PISC.

Process Flow for Stage 1 and Stage 2

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