Transcript Supports of statements - National Food Security Mission

Nafed would further its service and
commitment to the nation.
Mission: Farm Gate to Home Gate
Focus: Infrastructure
Farmers are at the receiving end both while procuring
inputs and selling produce
Need innovative business models to help farmers realise better returns
Even while the prices of agricultural commodities are ruling sky high, farmers
are not benefiting from it. Being small producers, they face several inherent
disadvantages which come in the way of realising better returns. Their share
of what the consumer is paying for a commodity, therefore, remains woefully
low.
Source: Business Standard, Jan 2010
Farmers suffer an urgency of selling their produce because of a
dire need of funds. Despite the MSP by the Government at this
time, they get paid less.
The procurement agencies also suffer losses in the process of encouraging
the MSP. A lose-lose situation for all : Government, agencies and farmers.
Prices rise, inevitably, before the period of new cropping.
Counter measures = import + price subsidy
Investment in creating infrastructure is critical
“In India, about 70% of the population is engaged in agriculture. Our food security must be built on
home-grown food, and import is not the answer since production cost in developed countries is rising. If
we invest in rural infrastructure and post-harvest technology, and look at production techniques and
ways to cope with climate changes, we will be in a position to feed ourselves and others as well.”
M.S. Swaminathan, architect of the Green Revolution. agriculture scientist and member of the Rajya
Sabha
The complete cycle
Period of new cropping
Farmer sells cheap
MSP from the Government. Losses
for the procurement agencies
Accompanying price rise
Counter with Import/Sales subsidy
Loss of Government money
A new business approach
The
strategy
A two pronged approach
Two pronged strategy
Farmer support
• Provide farmers the facility of
pledging crops to Nafed instead of
selling
• Basis actual need gap study,
implement priority allocation of
resources towards creating storage
facilties
• Reduce intermediaries in the cycle of
‘field to table’, thus ensuring just
pricing
• Standardisation of quality
benchmarks to reward superior
produce and ensure transparency
Institutional support
• Nafed to provide loans to farmers
• Apply Nafed benchmarks in
grading produce and publishing
the same
• Involvement in futures trading to
counter losses
• Offer futures traded pricing to
farmers (adjusting for related
charges)
Infrastructural
• Priority investment in creating
significant inventory of storage
capacities
• Investment in state-of-the-art
storage facilities
Brief of NCDC schemes for construction of godowns
and cold storages
A. Gramin Bhandaran Yojna
1.
Pattern of Assistance
Loan*
50%
Subsidy
25%
Own contribution
25%
Total
100%
* Loan for a period of 8 years @ 10%
2. In case of cooperatives in North East & Hilly Areas and SC/ST
Cooperatives, following pattern will apply
Loan*
46.67%
Subsidy
33.33%
Own contribution
20%
Total
100%
Brief of NCDC schemes for construction of godowns
and cold storages
A. Gramin Bhandaran Yojna (contd)
3.
4.
5.
Godowns constructed outside Municipal Corporation limit will be
eligible for subsidy
Normative cost for the purpose of subsidy is as follows
Size of Godown
Normative Cost
Upto 1000 MT
Rs. 2500 per MT
Above 1000 MT Godown
Rs. 1875 per MT
Repair/Renovation of godowns
Normative cost as appraised by NCDC or actual cost or Rs. 625/- per
tonne of storage capacity, whichever is lower. Pattern of assistance
as above
Brief of NCDC schemes for construction of godowns
and cold storages
A. Gramin Bhandaran Yojna (contd)
6.
Security
i.
ii.
iii.
1.5 times NCDC assistance
Land for the godown may be mortgaged to NCDC
In case of leasehold land, remaining period of lease should not be less than 30
years.
Brief of NCDC schemes for construction of godowns
and cold storages/contd
B. Central Sector scheme for under developed/ least developed
states
Under developed
states
Least developed
states
Loan
50%
70%
Subsidy
20%
25%
Own contribution
30%
5%
TOTAL
100%
100%
* Cooperatively Under-developed States
* Cooperatively Least-developed States
Andhra Pradesh, Chhattisgarh, Goa, Himachal
Pradesh, Madhya Pradesh, Orissa, Rajasthan,
Uttar Pradesh, Uttarakhand, West Bengal,
Union Territories of A&N Islands, Lakshadweep
Arunachal Pradesh, Assam, Bihar, Jharkhand,
Jammu & Kashmir, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Tripura
Brief of NCDC schemes for construction of godowns
and cold storages/contd
C. Cold Storage
Loan
Capital Investment subsidy (NHB)
50%
40% *
Own contribution
10%
TOTAL
100%
* being revised from 25% to 40%
Subsidy is restricted to Rs. 6,000/- per MT. it is back ended subsidy i.e., it
will be provided as interest free loan which will be converted into
subsidy after repayment of loan.
Details of land, constructed area, etc. of the Cold
Storages / Godowns / Warehouses of the Federation
S.No.
Location
Total area of
the plot
Cold Storages/ Godowns Constructed
Particulars
Area in
sq.mtr
Volume in
MTS
a) Old Cold Storage
1206.02
2500
b) New cold storage
1529.30
4000
c) Godowns
2360.40
3300
TOTAL
5095.72
9800
North Zone
1
Lawrence Road, Delhi
13347.52 sq.
mtrs.
Details of land, constructed area, etc. of the Cold
Storages / Godowns / Warehouses of the Federation
S.No.
Location
Total area of
the plot
Cold Storages/ Godowns Constructed
Particulars
Area in
sq.mtr
Volume in
MTS
a) Godowns
1984.73
3100
b) Staff quarters
c) Panel room & Guard
room
114.97
130.61
TOTAL
2230.31
North Zone
2
Bakshi-ka-Talab,
Lucknow
3
Sriganganagar
4
Maujgarh
12933.87 sq.
mtr.
10051.25 sq.
mtr.
7871.65
sq.mtr
2 Godowns of 5000 MTS
each
3 Halls for Kinnow
processing
4787.29
525.55
10000
Details of land, constructed area, etc. of the Cold
Storages / Godowns / Warehouses of the Federation
S.No.
Location
Total area of
the plot
Cold Storages/ Godowns Constructed
Particulars
Area in
sq.mtr
Volume in
MTS
Godown
808.45
1800
Bio-fertilizer unit
748.43
TOTAL
1556.88
9700 sq. mtr.
Production hall, Admin.
Block
1230
1400
8.25 acres/
33387.75
sq.mtr
Vanaspathi filling godown,
Cake godown, Raw
material godown
3286.8
4300
North Zone
5
6
Bharatpur
Bhiwadi
23723.43 sq.
mtr.
South Zone
7
Raichur, Karnatala
Details of land, constructed area, etc. of the Cold
Storages / Godowns / Warehouses of the Federation
S.No.
Location
Total area of
the plot
Cold Storages/ Godowns Constructed
Particulars
Area in
sq.mtr
Volume in
MTS
2 Godowns
839.68
660
South Zone
8 a)
b)
0.2731
hectares/2731
Gandhinagar, Kochi
sq.mtr
16.160
cents/648.80
Matancherry, Kochi
sq.mtr
70
TOTAL
839.68
730
9
Madhavaram,
Chennai
Spices, Pulses, Onion and
12172 sq. mtrs.
packing godowns
3891.45
5500
10
Nagapattinam
4676.30 sq. mtr
780.67
500
3 Onion sheds
Details of land, constructed area, etc. of the Cold
Storages / Godowns / Warehouses of the Federation
S.No.
Location
Total area of
the plot
Cold Storages/ Godowns Constructed
Particulars
Area in
sq.mtr
Volume in
MTS
West Zone
11
Vashi, Navi Mumbai
a)
Plot A
6000 sq.mtrs.
General and Mill godown
2950
4000
b)
Plot B
6000 sq.mts
I) Bond godown
1500
2500
II) Cold storage
2981
3000
TOTAL
7431
9500
5235
10000
2419.5
4000
12
Dewas, M.P.
13
Ganjbasoda, M.P.
2 Godowns of 5000 MTS
15390 sq.mtrs.
each
20109.55
sq.mtrs.
1 Godown
Details of land, constructed area, etc. of the Cold
Storages / Godowns / Warehouses of the Federation
S.No.
Total area of
the plot
Location
Cold Storages/ Godowns Constructed
Particulars
Area in
sq.mtr
Volume in
MTS
2 Tier onion storage ,
Other infrastructure
5221.19
1600
1 Godown
278.81
150
Model Onion storage,
Permanent shed
3513.01
1050
West Zone
14
Lasalgaon, Nasik
15
Pune
16
Pimpalgaon
9.20
Hectare/92000
sq.mtr
5000
sq.ft./464.68
sq.mtr
5.20
hectares/52000
sq.mtr
Pre-cooling cold storage
17
Morbi
20000 sq.mtr.
GRAND TOTAL
TOTAL
2 Godowns of 1600 MTS
each
70
3513.01
1120
1858.21
3200
66700
Business sense to infrastructure
Warehouse constructed
• Total area in square meters
• Total area in MTS
• Revenue @ Rs. 100/- per MTS per month
• Annual revenue
48907
66700
66, 70, 000
8,00,40,000 (A)
• Value of stocks that can be stored
@ Rs. 40,000/- pmt
• Revenue for pledging @ 4%
2,66,80,80,000
266 crores
10, 64,00,000 (B)
At present level . A + B = 18,64,40,000 (C)
•
•
•
•
Total Area available = 3,43,207.80 sq. meters
Constructed on = 48907.09 sq.meters
Constructed area (% of total area) = 14.25%
Without buying land and using 50% of land area =
343207 /2 = 1,71,603
• Less existing utilisation = 1,22,696 (17160348907.09)
• Total Land area available for expansion of storage =
1,22,696
• Total Land area available for expansion of
storage = 1,22,696
• (MTS Storage = Area x 1.5)MTS that can be
added = 1,84,044
• Potential revenue = Rs. 51,53,23,200/- (@ Rs.
2800 *pmt) or 51.53 crores
• Add existing = 18.65 crores
• TOTAL revenue = 70.18 crores
* (C)186440000/66700 = 2795 or 2800
• Capital cost needed
– 184044 x 2200 pmt = 40,48,96,800 or 40.50 crores
– 66700 x 625 = 4.16 crores
• Total cost outlay = Rs. 44.66 crores
– Loan = 22.33 crores
– Subsidy = 11.16 crores
– Own contribution = 11.17 crores
Underlying assumptions
• Land use can be extended to 50% of the total available land
• 1.5 MTS can be stored in 1 square metre constructed area
• The situation of Most Investment by Nafed has been considered.
– Exemption for North-east and hilly area, SC-ST-Cooperatives has not been
accounted for
• Cold storage facilities have not been taken into account even though cold
storage is more remunerative
• Need for Cold Storage can also be analysed and arrived at but need to take
into consideration all the Due Diligence reports
• Availability of around Rs. 300 crores for pledge financing
• Already existing tie-ups with NCDEX. NSEL and MCX etc would be used up
for the successful implementation of the project
Thank you
Rajan Dhawan
Adviser (Commerce & International Trade)
[email protected]