Dr. Diwakar Hegde, AGM
NABARD
Maharashtra Regional Office, Pune
Structure of the Session
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Brief Introduction
Horticulture Development Programmes
Credit Requirement and GLC
Feasible Projects
Technical Appraisal
Financial Appraisal
Commercial Appraisal
Entrepreneurial Appraisal
Issues
Schemes of NHB & NMPB
Horticulture
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POMOLOGY (Fruits)– Mango,Grapes etc.
OLERICULTURE(Vegetables) – Potato, Tomato
etc.
FLORICULTURE(Flowers) – Rose, Gerbera etc.
PLANTATION CROPS – Tea, Coffee, etc.,
MEDICINAL AND AROMATIC PLANTS – Tulsi, Aloe
vera, Lemongrass etc.
SPICES AND CONDIMENTS – Pepper, Chillies etc.
HORTICULTURE PROCESSING – Jams, Jellies,
Pickles, Juices etc.
OTHERS – Sericulture, Mushroom & Bee
Keeping
STATUS OF
HORTICULTURE
( Area – Million Ha , Production – Million T )
2007-08
Crops
Area
2008-09
Production
Area
2009-10
Production
Area
Production
Fruits
5.98
65.76
6.10
68.47
6.33
71.52
Vegetables
7.84
128.44
7.98
129.07
7.99
133.74
Spices
2.61
4.35
2.62
4.14
2.46
4.02
Plantation Crops
3.19
11.30
3.21
11.33
3.27
11.93
Flowers
0.16
0.86
0.16
0.98
0.18
1.02
Others
0.39
0.49
0.43
0.53
0.43
0.53
20.20
211.23
20.66
214.71
20.88
223.09
Total
CREDIT REQUIREMENT FOR
HORTICULTURE CROPS
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PRODUCTION
CREDIT
FOR
SEASONAL
AGRICULTURAL OPERATIONS :
Eg :
Vegetables, some flower crops, MACs
INVESTMENT CREDIT : Most fruit crops,
plantation crops, vegetables and floriculture
under polyhouse, MACs
WORKING CAPITAL REQUIREMENT :
For
Mushroom, Commercial Floriculture, fruit
and vegetable processing units etc.
GROUND LEVEL CREDIT
FLOW FOR HORTICULTURE
Crop
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
CAGR (last ten years)
CAGR (last five years)
GLC (Rs. in crore)
4481
5266
5910
6045
6407
6610
26.36 %
44.10 %
POSSIBLE PROJECTS
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Planting Material Supply – Commercial Nurseries and
Tissue Culture Units
Horticulture development projects –
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Predominantly for raising orchards, growing vegetable,flowers
etc. as a single crop/composite venture in few acres/ha with
minimum required infrastructure facilities
Large scale projects with comprehensive infrastructure
development
for
production,
irrigation,
packhouse,
transportation etc.
Large scale integrated projects for production and processing
Hi- Tech/ Green House Horticulture
Stand alone processing facilities
Small estates for growing plantation crops
Large estates with processing factories
Role of project appraisal
 To stop bad projects.
 To prevent good projects from being
destroyed
 To determine if components of project are
consistent
 To assess the sources and magnitude of the
risk
 To determine how to reduce risks and
efficiency share risks
APPRAISAL OF
HORTICULTURE PROJECTS
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Technical Appraisal – Technical Feasibility
Financial Appraisal – Financial Viability &
Bankability
Commercial Aspects - Marketability
Entrepreneurial Appraisal – Management of
the project
TECHNICAL APPRAISAL
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Suitability of the area
Agro climatic factors
Topography of the land
Protection from animals
plan, layout, spacing
package of practices
requirement of intercultural operations
(training, pruning etc.)
crops requiring support (grapes, betelvine,
citrus, vegetables etc.)
TECHNICAL APPRAISAL
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monocrop - inter crop
mixed crop - mixed farming
extension support
availability of inputs
estimation of yields
marketing
supply of power
FINANCIAL APPRAISAL
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PROJECT COST
 arrive at item wise cost & total cost
 cost for machinery supported by invoice, civil structures
supported by estimates
PHASING
 physical
 Financial
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FINANCIAL ANALYSIS
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NPW
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BCR
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IRR
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DSCR
FINANCIAL APPRAISAL
RATE OF INTEREST & SECURITY
 as per RBI guidelines
 REPAYMENT PERIOD
 gestation period /Economic life
 repayment based on cash flow
 realistic estimations of income
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COMMERCIAL
APPRAISAL
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Marketability of the produce/
product
Competing products
Marketing Arrangements/ tie
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Price Spread available
ENTREPRENEURIAL
APPRAISAL
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Background
Experience
Financial strength
Supporting Technical
Manpower
Issues
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Long Gestation Period
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Likelihood of inflated Costs.
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Cost of Planting Material
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Marketing Arrangements
NHB:
Development of Commercial Horticulture
through Production and Post Harvest
Management
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Back ended subsidy
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Production related components –
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General : 20% (max. limit of Rs 25 lakh/ project)
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NER/Hilly areas : 25 % (max. subsidy of Rs.33 lakh)
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For capital intensive and high value crops under protected cultivation and open
air cultivation of date palm, olive and saffron - 25 % (max. subsidy of Rs.50 lakh)
– 33 % (max. of Rs.60 lakh) for Scheduled and hilly areas)
Projects covering area above four hectares (above 10 acres) in case of open
cultivation, and more than 1000 sq. meter in case of protected cultivation
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PHM/Primary Processing related components).
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General : 40% (max. limit of Rs 50 lakh/ project)
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Hilly and scheduled areas : 55 % (max. subsidy of Rs.60 lakh)
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Eligible activities : Production of crops, seed, nursery, biotechnology, tissue
culture, bio-pesticides, processing, market yard, ancilliary industry, agri-clinics,
consultancy services, etc.
NMPB – National Mission on
Medicinal Plants
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Production and supply of planting
material – Small nurseries (1 ha –
60-70000 plants per year) – 50 %
subsidy with ceiling of Rs.2 lakhs
Setting up of value addition and
processing unit
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Subsidy of 25 % of the project cost
subject to a maximum of Rs.50 lakh
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NMPB – National Mission on
Medicinal Plants
Area expansion for select species
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Species in CITES list (16 sp.) – 75 %
subsidy
Critical species (32 sp.) – 50 % subsidy
Other species (45 sp.) – 20 % subsidy
Back ended credit linked subsidy
Min. bank loan for individuals – 20
%