Peri-Urban Vegetable Cluster Scheme (Part B) - Guidelines & Application

To address price volatility in urban markets and improve direct connections between vegetable growers and city consumers, the Ministry of Agriculture & Farmers Welfare introduced Part B of the Cluster Development Programme: Peri-Urban Vegetable Clusters.

Supported by a Rs. 2,000 Crore central budget allocation over 5 years, this initiative develops integrated vegetable supply chains within 50 to 100 km of major urban consumption centers.

Part B Scheme at a Glance

Definition and Eligibility of a Cluster

• Location: The cluster and all proposed infrastructure must be located within 50-100 km of the identified urban centre. The indicative radius is up to 50 km for population below 10 lakhs, up to 80 km for population of 10-15 lakhs, and up to 100 km for population above 15 lakhs.
• Mandated Crops: Primary crops are Tomato, Onion, and Potato. Other essential crops include Cabbage, Cauliflower, Okra, Brinjal, Capsicum, Cucumber, Gourd, Coriander, Lemon, Ginger, Green Chilli, Garlic, and similar vegetables.
• Optional Crops: Select at least 10 crops such as Squash, Jackfruit, Beans, Drumstick, Beetroot, Turnip, Zucchini, Carrots, Radish, Cucurbits, Green Peas, Amaranthus, Fenugreek, and Spinach.
• Boundary Requirement: The cluster must be within the boundaries of a State or Union Territory, with exceptions such as Delhi/NCR, Chandigarh, and Puducherry.
• Minimum Offtake: At least 50% of the total annual offtake of produce supplied to cities under the project must be produced by farmers within the identified cluster boundaries.

Eligibility of an Implementing Agency

Eligible Components for Subsidy under the CDP Scheme

Pattern of Assistance under the Cluster Development Program Scheme

• Assistance is decided on a case-to-case basis.
• Assistance is provided for two components: Implementing Agency component and Farmer Component.
• Assistance to Farmer Component: Minimum 40% of total assistance. 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 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.

Step-by-Step Execution Workflow

1. City & Cluster Selection: Identify target urban market and define farm boundary radius of 50-100 km.
2. FPO Integration & Offtake MoUs: Secure agreements with local vegetable farmers ensuring minimum 50% direct sourcing.
3. Concept Note & Technical Review: Submit via CDP SURAKSHA Portal and clear appraisal scoring with minimum 30/50.
4. Detailed Project Report (DPR) Filing: Submit DPR featuring bank loan appraisal and engineering BOQs, with minimum score of 60/100.
5. Milestone Execution & SURAKSHA Vouchers: Deploy capital, disburse farmer benefits via e-RUPI, and manage TRA account tranches.

Frequently Asked Questions (FAQs)

• What is the main objective of the Peri-Urban Vegetable Cluster Scheme?

  The primary goal is to stabilize retail vegetable prices in major cities while increasing farmers' share of the consumer rupee through short, direct supply chains.

• What distance restrictions apply under Part B?

  Facilities and farms must fall within a 50 to 100 km radius of targeted urban centers, depending on city population.

• Which crops must be included in a Peri-Urban Cluster?

  Projects must include Tomato, Onion, and Potato, along with essential vegetables such as Cabbage, Brinjal, Capsicum, Okra, and a selection of at least 10 optional vegetable crops.

• Are hydroponic and aeroponic farms eligible for subsidies?

  Yes, modern cultivation setups including hydroponics, aeroponics, vertical farming, and polyhouses are eligible for capital support under the production vertical.

• What percentage of produce must come from the cluster?

  At least 50% of the total annual produce sold through the project must be sourced directly from registered farmers within the cluster boundary.

• What is the subsidy support for farmer inputs?

  Farmer components are co-funded via the CDP SURAKSHA portal, covering 100% of cost norms in the first season and 50% in the second season.

• How are funds disbursed under Part B?

  Farmer assistance is disbursed directly to vendors via digital vouchers such as e-RUPI or DBT. IA infrastructure grants are disbursed in 3 tranches of 30%, 40%, and 30% through a bank TRA account.

• What city retail infrastructure can be funded?

  Eligible infrastructure includes city distribution hubs, temperature-controlled sorting and packaging centers, reefer delivery vans, retail kiosks, and mobile refrigerated carts.

• Who evaluates and verifies the project field operations?

  The State Horticulture Mission (SHM), along with NHB regional officers, conducts physical ground inspections and validates project milestones.

• What is the minimum required score for project approval?

  Proposals must score at least 30/50 on the Stage 1 Concept Note check and at least 60/100 on the Stage 2 Business Plan evaluation.

• Can existing retail aggregators apply under this scheme?

  Yes, private agribusinesses, retail aggregators, FPOs, and cooperatives can apply as Implementing Agencies if they meet net worth and bank loan criteria.

• How does Unique Group help with Peri-Urban applications?

  Unique Group handles all phase requirements, including baseline survey mapping, crop matrix planning, bank appraisal synthesis, and SURAKSHA platform compliance.

Build Your Urban Supply Chain with Unique Group

Establishing a successful peri-urban vegetable supply chain requires balancing farm production with precise city distribution logistics. Unique Group offers comprehensive consulting support to streamline your NHB CDP Part B application. Get in touch with our expert subsidy team today.