A focus crop is the dominant horticultural crop identified within the cluster, such as mango, apple, or banana. Secondary crops are integrated into the cluster to ensure cold storage and processing infrastructure are utilized year-round.
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Multi-Commodity High Value Cluster Scheme (Part A) - Comprehensive Guide
Under Part A of the National Horticulture Board (NHB) Cluster Development Programme, the Government of India supports large-scale Multi-Commodity High Value Clusters. The scheme focuses on primary focus crops such as mango, banana, apple, citrus, and spices while incorporating secondary crops to maximize cold chain utilization, reduce post-harvest losses, and establish direct international export links.
Part A Scheme at a Glance
- Minimum Cluster Farm Gate Value: Rs. 100 Crores.
- Geographical Limit: Maximum 3 adjoining contiguous districts.
- Implementing Agency Subsidy: Up to 25% of Farm Gate Value (FGV).
- Farmer Component: Minimum 40% of total project allocation.
- Execution Period: 36 months.
Definition & Key Eligibility Criteria for Part A Clusters
- Definition: A Multi-Commodity High Value Cluster represents an existing or induced geographical concentration of targeted horticulture crops.
- Focus Crop Identification: Clear selection of 1 main focus crop with ancillary crops for round-the-year utility.
- Farm Gate Value Threshold: Minimum annual Farm Gate Value (FGV) must equal or exceed Rs. 100 Crores.
- Geographic Boundary: Entire cluster must fall within 1 single State or Union Territory.
- Contiguity Requirement: Cluster lands must be contiguous, covering a maximum of 3 adjoining districts.
Pattern of Assistance
- Assistance is provided for two components: Implementing Agency component and Farmer Component.
- Assistance to Implementing Agency component: Maximum up to 25% of Farm Gate Value (FGV) of the focus crop. Assistance is credit linked and disbursed in three installments.
- Assistance to Farmer Component: This component is provided in addition to assistance provided to IA. Assistance is given upfront and provided for two seasons, with 100% support in Year 1 and 50% support in Year 2. Assistance is provided directly to vendors through the CDP portal.
- Assistance is subject to official cost norms.
- Additional 5% subsidy will be provided to the IA if the project is completed within agreed timelines. This is over and above the upper limit.
- 10% of project cost will be provided to IA for implementing innovative components, within the upper limit of the subsidy.
Understanding the Farm Gate Value (FGV) & Subsidy Formula
The maximum financial assistance for an Implementing Agency (IA) under Part A is capped at 25% of the calculated Farm Gate Value (FGV) of the focus crop.
Farm Gate Value (FGV) = Proposed Acreage (A) x Average Yield (B) x Modal Market Price (C)
Practical Calculation Example: Mango Cluster
Implementing Agency Component
| Parameter | Operational Value |
|---|---|
| Proposed Focus Crop Area (A) | 2,500 Acres |
| Average Crop Productivity (B) | 15 MT / Acre |
| Total Expected Annual Production (C = A x B) | 37,500 MT |
| Farm Gate Modal Price (D) | Rs. 30/kg (Rs. 30,000 / MT) |
| Calculated Farm Gate Value (FGV) (C x D) | Rs. 112.50 Crores |
| Max Financial Assistance for IA (25% of FGV) | Rs. 28.13 Crores |
Note: Farmer interventions such as planting material, micro-irrigation, and precision equipment are funded separately according to official cost norms and added on top of the IA assistance limit.
Farmer Component
| Particulars | Value |
|---|---|
| Planting Material | Rs. 8 Cr |
| Micro Irrigation | Rs. 12 Cr |
| Farm Mechanization | Rs. 10 Cr |
| GAP / IPM / INM | Rs. 4 Cr |
| Precision Farming | Rs. 6 Cr |
| Total | Rs. 40 Cr |
Total Expected Value
| Particulars | Value |
|---|---|
| IA Component | Rs. 28.13 Cr |
| Farmer Component | As per norms |
| Total | Rs. 28.13 Cr + Farmer Component |
Pre-Production and Production
Farmer Components
- Cost of quality planting material.
- Farm machinery.
- Cost of micro irrigation.
- Inputs for Integrated Nutrient Management (INM) and Integrated Pest Management (IPM).
- Adoption of Good Agricultural Practices (GAP).
- Innovative technologies such as fruit netting, fruit bagging, cable or zip-line fruit evacuation systems, portable weather stations, and precision agriculture technologies.
Implementing Agency Components
- Formation and promotion of FPOs.
- Capacity-building of farmers and FPOs.
- Awareness campaigns and exposure visits.
- Hi-tech nurseries, tissue culture labs, and quality control labs.
- Adoption and dissemination of GAP, crop-care practices, MRL, INM, and IPM practices.
- Micro-irrigation, farm mechanisation, precision farming, high-density plantation, drones, and advanced farm machinery.
- Real-time market intelligence, IT and digital innovations, IoT infrastructure, traceability blockchains, remote sensing, weather stations, and farm management software.
- Development and dissemination of IEC material.
- Technical assistance from national and international organisations, universities, and other institutes.
Post-Harvest Management & Value Addition
- Aggregation infrastructure such as collection centers.
- Establishment, expansion, or modernisation of cluster-level infrastructure such as integrated pack-houses, ripening chambers, pre-cooling units, cold rooms, reefer vans, primary and secondary processing units, and value addition.
- Cold storage infrastructure including multi-temperature and controlled atmosphere cold storages and related utilities.
- Infrastructure for packaging and innovative packaging such as modified atmosphere packaging, nitrogen flushing, and innovative packaging material.
- Ancillary facilities required for post-harvest handling of produce.
- Training on post-harvest handling practices.
Logistics, Marketing, and Branding
- Transport, cold chain, and logistics infrastructure from farm gate to domestic markets and export exit points.
- Storage and material handling infrastructure for alternative multi-modal transport.
- Market linkages in identified domestic and export markets.
- E-commerce platforms and digital marketing for efficient market outreach.
- Digital Public Infrastructure customization for traceability, blockchain, and IoT solutions.
- Marketing campaigns, trade fairs, buyer-seller meets, and product sampling in target markets.
- Market intelligence with inputs on real-time market needs.
- Approach road or internal road assistance of up to Rs. 1.5 Cr per project.
Ineligible Components
- Cost of land.
- Site development such as excavation and filling.
- Chemical inputs for production, including pesticides, fertilizers, and other agrochemicals.
- Administrative office building, guest house, compound wall, canteen, and restaurants.
- Fuel, consumables, spares, and stores.
- Second hand, old, reconditioned, and refurbished plant and machinery.
- Applicable taxes, insurance, margin money, service charges, carriage, and freight charges.
- Stationery items and operational costs including rentals, salaries, and maintenance cost.
Mandatory Criteria for Implementing Agencies
- Implementation Agencies will be responsible for execution of the project.
- IA should be a legal entity including FPOs, cooperatives, societies, partnership firms, and companies.
- Net worth: At least equal to IA cost component.
- Equity Contribution: At least 20% of IA cost component.
- Relevant Experience: Experience in agriculture and horticulture should be verifiable.
- Turnover: Applicant entity should have annual turnover at least equal to total cost of project.
- Term Loan: At least 20% of IA cost component.
- Farmer Component: At least 40% of total project cost.
- Applicant and all shareholders should have clean financial records with no defaults on debt obligations in the last 3 years, and none should be classified as NPA by any lender.
Evaluation Benchmark Scores
Proposals undergo a two-stage evaluation process.
Stage 1: Concept Note Evaluation
- Responsiveness Check: Mandatory compliance with net worth, debt, and turnover rules.
- Technical Score: Minimum 30 out of 50 points required to pass.
Stage 2: Business Case / DPR Evaluation
- Total Score Matrix: 100 points, including Applicant Profile: 30, DPR: 60, and Presentation: 10.
- Benchmark Rule: Minimum 60/100 overall score and more than 50% in each sub-category.
Competitive Selection Policy: If multiple qualified applicants apply within the same cluster geography for the same focus crop, the contract is awarded to the applicant requesting the lowest IA grant amount per Rs. 100 Crores of FGV.
Frequently Asked Questions (FAQs)
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What qualifies as a "Focus Crop" under Part A?
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What is the maximum project limit for Part A High Value Clusters?
While there is no fixed maximum capital ceiling, the IA grant assistance is capped at 25% of the calculated annual Farm Gate Value (FGV).
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Are civil works eligible for subsidy under Part A?
Yes, but expenditure on civil construction must not exceed 30% of the total project cost. Non-technical civil works like guest houses or administrative offices are strictly ineligible.
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What happens if our project finishes ahead of schedule?
An additional 5% subsidy incentive, over and above the approved upper limit, is awarded to IAs that complete all project components within approved timelines.
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Can a private limited company apply as an Implementing Agency?
Yes, legal entities including Private Limited Companies, FPOs, Cooperatives, Registered Societies, and Partnership Firms are eligible.
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Is a bank term loan mandatory for applying?
Yes, applicants must secure a formal bank loan sanction covering at least 20% of the IA cost component from an RBI-approved scheduled commercial bank.
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How are farmer benefits delivered under this vertical?
Farmer benefits such as micro-irrigation, saplings, and netting are delivered through the CDP SURAKSHA Portal using direct-to-vendor payment vouchers, covering 100% of input costs in Year 1 and 50% in Year 2.
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What is the minimum required score for DPR approval?
The Detailed Project Report (DPR) must score at least 60 out of 100 points overall and achieve at least 50% in each evaluation sub-category.
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What infrastructure components are covered under Logistics & Marketing?
Eligible infrastructure includes multi-temperature reefer vans, aggregation collection centers, packaging hubs, e-commerce integration, and approach roads up to Rs. 1.5 Cr per project.
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Can a cluster cross state borders?
No, the cluster territory must be located entirely within a single State or Union Territory.
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What is the penalty if an IA account turns into an NPA during execution?
If an IA account is classified as a Non-Performing Asset (NPA) during implementation, the NHB reserves the right to close the project immediately and recall disbursed funds with interest.
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How does Unique Group assist with Part A CDP applications?
Unique Group manages the entire application lifecycle from conducting gap assessments and calculating FGV to structuring bank loan appraisals and managing filings through project commissioning.
Scale Your Agribusiness with Unique Group
Securing funding under Part A of the NHB Cluster Development Scheme requires precise alignment with complex policy guidelines. Unique Group serves as a strategic consulting partner, guiding agribusinesses through feasibility studies, detailed project reports (DPRs), and financial closure. Contact our specialized NHB consultancy team today.
