Nabard

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Nabard

Model Bankable Projects Plantation / Horticulture Mango Cultivation Mango (Mangifera indica) is the leading fruit crop of India and considered to be the king of fruits. Besides delicious taste, excellent flavour and attractive fragrance, it is rich in vitamin A&C. The tree is hardy in nature and requires comparatively low maintenance costs. Mango occupies 22% of the total under fruits comprising of 1.2 million hectares, with a total production of 11 million tonnes. Uttar Pradesh and Andhra Pradesh are having the largest area under mango each with around 25% of the total area followed by Bihar, Karnataka, Kerala and Tamil Nadu. Mango fruit is utilised at all stages of its development both in its immature and mature state. Raw fruits are used for making chutney, pickles and juices. The ripe fruits besides being used for desert are also utilised for preparing several products like squashes, syrups, nectars, jams and jellies. The mango kernel also contains 8-10 percent good quality fat which can be used for soap and also as a substitute for cola in confectionery. Fresh mangoes and mango pulp are the important items of agri-exports from India. India's main export destinations for mango are UAE, Kuwait and other Middle East countries with a limited quantity being shipped to European market. Although, India is the largest mango producing country, accounting about 60% of world production, the export of fresh fruit is limited to Alphonso and Dashehari varieties. India's share in the world mango market is about 15 percent. Mango accounts for 40 percent of the total fruit exports from the country. There is good scope for increasing the area and productivity of mango in the country. Climate : Mango can be grown under both tropical and sub-tropical climate from sea level to 1400 m altitude, provided there is no high humidity, rain or frost during the flowering period. Places with good rainfall and dry summer are ideal for mango cultivation. It is better to avoid areas with winds and cyclones which may cause flower and fruit shedding and breaking of branches. Soil : Mango comes up on a wide range of soils from alluvial to laterite provided they are deep (minimum 6') and well drained. It prefers slightly acidic soils (pH 5.5 to 7.5) Varieties : go to top Though there are nearly 1000 varieties of mango in India, only following varieties are grown in different states : Alphonso, Bangalora, Banganpalli, Bombai, Bombay Green, Dashehari, Fazli, Fernandin, Himsagar, Kesar, Kishen Bhog,Langra, Mankhurd, Mulgoa, Neelam, Samarbehist, Chausa, Suvarnarekha, Vanaraj and Zardalu.

Recently some mango hybrids have been released for cultivation by different institutes / universities. A brief introduction to such varieties is presented below : Mallika - It is a cross between Neelam and Dashehari. Fruits are medium sized cadmium coloured with good quality, reported to be a regular bearer. Amrapali - It is a cross between Dashehari and Neelam. It is a dwarf vigorous type with regular and late bearing variety. It yields on an average 16 t/ha and about 1600 plants can be accommodated in one hectare. Mangeera : It is a cross between Rumani and Neelam. It is a semi vigorous type with a regular bearing habit. Fruits are medium sized with light yellow coloured skin, firm and fibreless flesh and sweet to taste. Ratna : It is a cross between Neelam and Alphonso. It is a regular bearer and free from spongy tissue. Fruits are medium sized with excellent quality. Flesh is firm and fibreless, deep orange in colour with high TSS (19-21 Brix). Arka Aruna : It is a hybrid between Banganapalli and Alphonso with regular bearing habit and dwarf in stature. About 400 plants can be accommodated per hectare. Fruits are large sized (500-700 gm) with attractive skin colour. Pulp is fibreless, sweet to taste (20-22 Brix). Pulp percentage is 73 and the fruits are free from spongy tissue. Arka Puneet : It is a regular and prolific bearing hybrid of the cross between Alphonso and the Banganapalli. Fruits are medium sized (220-250 gm) with attractive skin colour, having red blush. Pulp is free from fibre, pulp percentage being 70 percent. Fruits are sweet to taste (20-22 Brix) with good keeping quality and free from spongy tissue. It is a good variety for processing also. Arka Anmol : It is a semi-vigorous plant type from the cross between Alphonso and Janardhan Pasand. It is also a regular bearing and free from spongy tissues. Fruits ripen to uniform yellow colour. Keeping quality of the fruit is very good and it is suitable for export. It has got excellent sugar and acid blend and fruits weigh on an average about 300 g Pulp is orange in colour. Propagation : Farmers should always get vegetatively propagated, true to type plants from recognised nurseries. Inarching, veneer grafting, side grafting and epicotyl grafting are the popular methods of propagation in mango. Planting : Land should be prepared by deep ploughing followed by harrowing and levelling with a gentle slope for good drainage. Spacing varies from 10 m x 10 m, in the dry zones where growth is less, to 12 m x 12 m, in heavy rainfall areas and rich soils where abundant vegetative growth occurs. New dwarf hybrids like Amrapali can be planted at closer spacing. Pits are filled with original soil mixed with 20-25 kg well rotten FYM, 2.5 kg single super phosphate and 1 kg muriate of potash. One year old healthy, straight growing grafts from reliable sources can be planted at the centre of pits along with the ball of the earth intact during rainy season in such a way that the roots are not expanded and the graft union is above the ground level. Plants should be irrigated immediately after planting. In the initial one or two years, it is advisable to provide some shade to the young plants and also stake to make them grow straight. Training and pruning : About one meter from the base on the main trunk should be kept free from

branching and the main stem can be allowed thereafter spaced at 20-25 cm apart in such a way that they grow in different directions. Branches which cross over/rub each other may be removed at pencil thickness. Fertiliser Application : In general, 170 gm urea, 110 gm single super phosphate and 115 gm muriate of potash per plant per year of the age from first to tenth year and thereafter 1.7 kg, 1.1 kg, and 1.15 kg respectively of these fertilisers per plant per year can be applied in two equal split doses (June-July and October). Foliar spray of 3% urea is recommended before flowering in sandy areas. Irrigation : Young plants are watered frequently for proper estalbishment. In case of grown up trees, irrigation at 10 to 15 days interval from fruit set to maturity is beneficial for improving yield. However, irrigation is not recommended for 2-3 months prior to flowering as it is likely to promote vegetative growth at the expense of flowering. Inter cropping : Inter crops such as vegetables, legumes, short duration and dwarf fruit crops like papaya, guava, peach, plum, etc. depending on the agro-climatic factors of the region can be grown. The water and nutrient requirements of the inter crops must be met separately. Plant Protection : Mango is prone to damages by a large number of pests, diseases and disorders. The recommended control measures for most important and common among them are briefed below : Mango hopper : Two sprays (at panicles emergency and at pea size of fruits) of carbaryl (0.15%), monocrotophos (0.04%) or phosphamidan (0.05). Mealy bug : Ploughing inter spaces in November and dusting 2% methyl parathion @200 g per tree near the trunk and fixing 20 cm wide 400 gauge polythene strips around the trunk with grease applied on the lower edge in January as prophylactic measures and two sprays of monocrotophos (0.04%) at 15 days interval as control are needed. Powdery mildew : Two to three sprays of wettable sulphur (0.2%) or Kerathane (0.1%) at 10-15 days interval. Anthracrose : Two sprays of Baristin (0.1%) at fortnight interval. Malformation : One spray of 200 ppm NAA in October followed by deblossoming at bud burst stage in December - January. Fruit drop : Regular irrigation during fruit development, timely and effective control of pests and diseases and spraying 20 ppm NAA at pea size of fruits. Harvesting and yield : Graft plants start bearing at the age of 3 - 4 years (10-20 fruits) to give optimum crop from 10-15th year which continues to increase upto the age of 40 years under good management.

Post Harvest Management : Storage : Shelf life of mangoes being short (2 to 3 weeks) they are cooled as soon as possible to storage temperatue of 13 degree Celcius. A few varieties can withstand storage temperature of 10 degree Celcius. Steps involved in post harvest handling include preparation, grading, washing, drying, waxing, packing, pre-cooling, palletisation and transportation. Packaging : Mangoes are generally packed in corrugated fibre board boxes 40 cm x 30 cm x 20cm in size. Fruits are packed in single layer 8 to 20 fruits per carton. The boxes should have sufficient number of air holes (about 8% of the surface area) to allow good ventillation. Financial institutions have also formulated mango financing schemes in potential areas for expansion of area under mango. Individual mango development schemes with farm infrastructure facilities like well, pumpset, fencing and drip irrigation system etc. have also been considered. Farm model for financing one hectare mango orchard is furnished in the Annexure I. Unit Cost : The unit cost varies from state to state. The cost presented here is indicative only. The enterpreneurs and the bankers are requested to consult our Regional Offices for the latest information in this regard. The unit cost estimated for this model scheme is Rs.34400/- per ha capitalised upto the fifth year. The break-up deatails are given in Annexure I. Financial Analysis : Results of financial analysis are indicated below : go to top NPW at 15% DF : Rs.59058 (+) BCR at 15% DF : 2.34 IRR : 25.59% Detailed analysis is presented in Annexure II. Margin Money : The margin money assumed in this model scheme is 5% of the total financial outlay. Interest Rate : Interest rate may be decided by the banks as per the guidelines of RBI. Security : Banks may charge such security as permissible under RBI guidelines. Repayment : The bank loan with interest is repayable within 14 years with 7 years grace period as shown in Annexure-III. Annexure - I Cost and Income from Mango Cultivation (Rs. per ha) Spacing : 10m x 10m Plant population : 100 Estimated cost: Sr. Particulars Year Total

No. 1 2 3 4 5 6 7 8 9 Planting material Manures & Fertilisers Plant protection Sprayer & implements Fencing Irrigation Labour Intercropping Miscellaneous Total Projected income:

1 2200 3000 1100 1500 2500 1800 3200 1500 600 17400

2 -1100 600 --500 1200 -500 3900

3 -1100 600 --500 1200 -500 3900

4 -1400 700 --500 1500 -500 4600

5 -1400 700 --500 1500 -500 4600 2200 8000 3700 1500 2500 3800 8600 1500 2600 34400

Annexure III Repayment Schedule (Mango Cultivation) Total Financial Outlay(Rs) 34400 Margin money @ 5% of TFO((Rs.) 1720 Bank Loan(Rs.) 32680 (Amount in Rs.)

Repayment period is 14 years including 7 years grace period

Agricultural Engineering COLD STORAGE FOR PLANTATION AND HORTICULTURE PRODUCE 1. Introduction India is the largest producer of fruits and second largest producer of vegetables in the world. In spite of that per capita availability of fruits and vegetables is quite low because of post harvest losses which account for about 25% to 30% of production. Besides, quality of a sizable quantity of produce also deteriorates by the time it reaches the consumer. This is mainly because of perishable nature of the produce which requires a cold chain arrangement to maintain the quality and extend the shelf-life if consumption is not meant immediately after harvest. In the absence of a cold storage and related cold chain facilities, the farmers are being forced to sell their produce immediately after harvest which results in glut situations and low price realization. Sometime farmers do not even get their harvesting and transportation costs what to talk of the cost of production or profit. As a result, our production is not getting stabilized and the farmers after burning fingers in one crop switch over to another crop in the subsequent year and the vicious cycle continues. Our farmers continue to remain poor even though they take risk of cultivating high value fruits and vegetable crops year after year. A cold storage facility accessible to them will go a long way in removing the risk of distress sale to ensure better returns. This document endeavors to provide information on various broad technical and financial aspects of a cold storage unit to enable the financing banks and entrepreneurs in formulation and implementation such projects. Investment Credit

This is a long-term refinance facility, it is intended for Investment in agriculture and allied activities
Technical Services Department

2. Status of Cold storage and its potential in India The estimated annual production of fruits and vegetables in the country is about 130 million tonnes. This accounts for 18% of our agricultural output. Due to diverse agro climatic conditions and better availability of package of practices, the production is gradually rising. Although, there is a vast scope for increasing the production, the lack of cold storage and cold chain facilities are becoming major bottlenecks in tapping the potential. The cold storage facilities now available are mostly for a single commodity like potato, orange, apple, grapes, pomegranates, flowers, etc. which results in poor capacity utilization. Present availability of cold storage capacity is only 103.5 lakh tonnes, out of which units having about 8 lakh tonnes capacity are non functional. Although 90% of these units are made to store only potato even then it does not meet the requirement of the single crop, the production of which is about 300 lakh tonnes. Out of 3443 cold storage units setup till 1988, 2012 units were for potato, 447 units were for multipurpose use, 198 units were for fruits and vegetables and the remaining were for products like meat, fish, milk, etc. The details of the commodity wise distribution of cold storage capacity is given in Table 1. Table 1 : Commodity wise distribution of cold storage capacity Commodity Potato Multipurpose Fruits & Vegetables Meat Fish Meat & Fish Milk & Dairy Products Others Units 2,012 447 198 23 360 30 272 101 Capacity (lakh tonnes) 92.82 7.63 1.07 0.09 0.73 0.15 0.68 0.36

This division is the service provider on technical issues

Of the above 3443 cold storage units, 2975 are in private sector, 303 are in cooperative sector and the rest are in public sector. According to the information collected by the expert committee on cold storage and storage, requirement of cold storage in the next five years may be in excess of 12 lakh tonnes. The working group of the planning commission for IX plan had assessed new cold storage capacity for fruits, vegetables and multi commodity as 15 lakh tonnes; 13 lakh tonnes in private sector, 1.5 lakh tonnes in cooperative sector and the rest 0.5 lakh tonnes in public sector. Thus, there remains a vast potential to be tapped. 3. Storage of foods and Storage Conditions Foods and many other commodities can be preserved by storage at low temperature, which retards the activities of micro organisms. Micro organisms are the spoilage agents and consist of bacteria, yeasts and molds. Low temperature does not destroy those spoilage agents as does high temperature, but greatly reduces their activities, providing a practical way of preserving perishable foods in their natural state which otherwise is not possible through heating. The low temperature necessary for preservation depends on the storage time required often referred to as short or long term shortage and the type of product. In general, there are three groups of products: 1. 2. 3. Foods that are alive at the time of storage, distribution and sale e.g. fruits and vegetables, Foods that are no longer alive and have been processed in some form e.g. meat and fish products, and Commodities that benefit from storage at controlled temperature e.g. beer, tobacco, khandsari, etc.

Living foods such as fruits and vegetables have some natural protection against the activities of micro organism. The best method of preserving these items is to keep the product alive and at the same time retard the natural enzyme activity which will retard the

rate of ripening or maturity. Preservation of non-living foods is more difficult since they are susceptible to spoilage. The problem is to preserve dead tissues from decay and putrefaction. Long term storage of meat and fish product can only be achieved by freezing and then by storing it at temperature below -15oC. Only certain fruits and vegetables can benefit from freezing. However, for fruits and vegetables one should be very careful about the recommended storage temperature and humidity a deviation from which will have adverse effect on the stored product leading to even loss of the entire commodity. Products such as apples, tomatoes, oranges, etc. cannot be frozen and close control of temperature is necessary for long term storage. Some product can also be benefited by storing under controlled atmosphere and modified atmosphere conditions. Dairy products are produced from animal fats and therefore non living foodstuffs. They suffer from the oxidation and breakdown of their fats, causing rancidity. Packaging to exclude air and hence Oxygen can extend storage life of such foodstuffs. The storage requirement of some of the important commodities are placed at Annexure I. 4. Economic size of unit and land requirements: Cold storage units can be used to store either a single commodity or multiple commodities. Depending upon the entrepreneur's financial health; it can be planned to store the produce entirely owned by him or on rental basis or in combination of the two. NABARD usually encourages cold storages where 70% of the capacity is available to farmers for storage on rentals. Financial viability of a unit depends upon the intended pattern of use and rental rate prevalent in an area. However, units entirely to be used by the owners are also considered for sanction. Considering 70:30 utilization of the capacity for rentals and own use, a 5000 MT capacity unit is considered as viable with the assumptions as indicated at Annexure II. To set up a 5000 MT capacity cold storage unit although one acre of land may be adequate, it is always better to have two acres of land to take care of future expansions and waste management. While selecting the site care should be taken to select a site at an elevation free from inundation and well connected by road and other communication facilities to both production and consumption centres. The land should be of non agricultural type and the soil at the site should be firm enough to carry the weight of the building and storage racks. 5. Technology A cold storage unit incorporates a refrigeration system to maintain the desired room environment for the commodities to be stored. A refrigeration system works on two principles: 1. 2. Vapour absorption system (VAS), and Vapour compression system (VCS)

VAS, although comparatively costlier, is quite economical in operation and adequately compensates the higher initial investment. Wherever possible such a system should be selected to conserve on energy and operational cost. However, it has its own limitations when temperature requirement is below 100C and many of the fruits and vegetables except seeds, mango, etc. require lower than 100C for long storage. VCS is comparatively cheaper than VAS. There are three types of VCS systems available depending upon the cooling arrangements in the storage rooms i.e., diffuser type, bunker type and fin coil type. Diffuser type is comparatively costlier and is selected only when the storage room heights are low. The operational cost of such units are also higher. Bunker type is the cheapest and is preferred when storage room heights normally exceeds 11.5 m. Its operational cost is also low. Fin coil type, although about 5% costlier than the bunker type, is very energy efficient with low operational cost and higher space availability for storage of produce. Such system is used for units with room heights of 5.4m onwards. A comparison of electrical loads & energy savings, refrigerant requirement and space savings in all the three systems are given in Table 2. Table 2 : Comparison of energy savings, refrigerant and space requirement of cooling units of a 4000 MT cold storage.

Item Installed Electrical load Installed Electrical load Energy saving Refrigerant requirement Space requirement for cooling system

Unit hp kW % kg cu m

Type of Vapour Compression System Diffuser 180 134.28 1,520 452 Bunker 128 95.49 29 2,200 670 Fin coil 124 92.50 31 380 36

In a refrigeration system, refrigerants are used to pick up heat by evaporation at a lower temperature and pressure from the storage space and give up the heat by condensation at a higher temperature and pressure in a condenser. Freon used to be a common refrigerant but as it causes environmental degradation, its use is going to be banned by the year 2008. Therefore, Ammonia is being increasingly used and preferred for horticultural and plantation produce cold storage units. Although several types of compressors and condensers are available, medium speed reciprocating compressors and atmospheric condensers are preferred because of the relatively lower cost, energy efficiency and ease in maintenance. While selecting size of the equipment, care should be taken to assess all loads and proper provision should be made to take care of the peak demand during summer loading and aging of the equipment. Heat load factors normally considered in a cold storage design are: 1. 2. 3. Wall, floor and ceiling heat gains due to conduction Wall and ceiling heat gains from solar radiation Load due to ingression of air by frequent door openings and during fresh air charge. 4. Product load from incoming goods 5. Heat of respiration from stored product 6. Heat from workers working in the room 7. Cooler fan load 8. Light load 9. Aging of equipment 10. Miscellaneous loads, if any

Structural requirement : Although the storage space provision will vary according to the room height and technology being selected. Normally, a provision of 3.4 m3 per MT of potato is considered for finalizing the room size with the bunker type of VCS technology. For other commodities, space adjustment should be made with relation to their bulk density as compared to potato. Proper soil testing and rack design need to be ensured. The rack system and its foundation should be strong enough to support weight of commodities. Normally, raft foundation is preferred for racks. Insulation : All the sides of the cold storage room need to be insulated in order to maintain the required temperature inside. Various types of insulating materials are used for insulation of side walls, partition walls, floor and roof. However, the most commonly used insulation material is thermocoal and sometimes Poly Urethane Fibre (PUF) panels are also used for insulation depending upon the economics of the project. Proper thickness of insulating material should be used for insulation of walls. Normally, two layers of insulating material are used for insulation. A minimum 100 mm thickness of low density thermocoal need to be used for sun facing walls and roof, whereas 80 mm thickness of low density thermocoal may be used for other two walls. Partition walls need to be insulated with 40 mm low density thermocoal and a thickness of 80 mm high density thermocoal is necessary for floors. Utilities : Availability of soft water and dependable power supply at the site needs to be ensured. In case the power available is not dependable, provision of a Diesel Generator set should be incorporated in the project. Similarly if water at site is not soft and its hardness is within the limit for treatment, a softening plant has to be incorporated to match the capacity.

6. Promoter's Profile The promoters can be individuals, group of individuals, cooperative societies, proprietary/ partnership concerns and joint sector companies in public or private sector. While formulating a project, complete details of the promoter(s), their experience in the activity and net worth, etc. have to be incorporated. 7. Physical and Financial Outlay The following physical provisions with their costs are considered for a cold storage unit: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Land Site development including leveling, fencing, road, drainage, etc. Civil structures including main cold storage building, rack provisions, drying shed, machinery room, store for consumables, generator room, office, security cabin, etc. Insulation of main cold store building Machinery for cooling, air movement, loading, grading and weighing Electric supply arrangement including installation of transformer and deposits for requisite connection Standby electric supply arrangement/ DG set Water supply arrangement and treatment plant, if required Pollution control and waste disposal equipment Miscellaneous fixed assets including office equipment and furniture Preliminary and preoperative expenses Contingency Margin money for working capital

Wherever market is there for ice, an ice plant of the suitable size may be incorporated for better utilization of the facilities and higher income. If an ice plant is included with the cold storage, the additional investment for ice plant may also be included in the financial outlay. The average cost of a 5000 tonnes capacity cold storage is about Rs. 150 lakhs and the tentative expenditure on broad heads is given at Annexure III. While deciding the physical provisions, care may be taken to make the unit a multi commodity and multi chamber system for better capacity utilization. 8. Financial Viability The financial analysis of the investment of a cold storage unit of 5000 MT capacity has been attempted and is placed at Annexure IV. The project has a margin money component of 25% with the rate of interest on term loan and working capital as 15% and 18% respectively. The rental charges have been considered at Rs. 700 per MT and the profit margin on self storage is Rs. 3000 per MT. Pledge loan earns a margin of 2%. For this project, the financial indicators of the investment are as under: 1. 2. 3. Net Present Value @ 15% DF = Rs. 67.09 lakh Internal Rate of Return (IRR) = 25.75 % Average Debt Service coverage Ratio = 1.58

9. General Lending Terms NABARD provides refinance support to various financing banks including Commercial Banks (CBs), Regional Rural Banks (RRBs), State Cooperative Banks (SCBs) and State Cooperative Agriculture and Rural Development Banks (SCARDBs) for financing cold storages under its normal refinance programme. The general terms and conditions relating to the NABARD's refinance support are indicated below: a) Eligible Borrowers/ Institutions for Refinance The advances made to individuals, group of individuals, cooperative societies, proprietary/ partnership concerns and joint sector companies by CBs and SCBs for cold storage units chain are eligible for refinance from NABARD. Besides this, the advances granted to

individuals for cold storages and allied purposes granted by SCARDBs and RRBs are also eligible for refinance from NABARD. b) Margin Money A margin money of 15% to 25% of the project cost is normally insisted upon depending upon the status and financial health of a borrower. c) Rate of Interest The rate of interest on the agricultural advances including cold storage and godowns are stipulated by the financing banks subject to guidelines issued by the RBI from time to time. The interest on NABARD's refinance to various banks depends upon the loan amount. The existing interest rate for refinance to various banks is given below: NABARD's Interest Rates on Schematic Refinance for Farm/ Non Farm Sectors for all agencies vide circular No. 39/DPD.FS.07/2004 dated February 10, 2004 (CBs/PCBs/RRBs/SCBs/SCARDBs/ADFCs) – effective w.e.f. February 13, 2004 {% p.a.} Loan Amount For NE States including Sikkim and Andaman and Nicobar Islands 5.50% 5.50% 5.50% For All Other Regions

up to Rs. 50,000 Rs. 50001 to Rs. 2.00 Lakh above Rs. 2 lakhs

5.50% 6.25% 6.75%

d) Repayment Period Repayment period is fixed upon the financial analysis of cash flow for each and every project and in general a repayment period of up to nine years is allowed including a grace period of one year. e) Security Security from ultimate beneficiary has to be obtained by the financing banks as per the RBI guidelines issued from time to time. g) Quantum of Refinance The quantum of refinance to various financing banks varies depending upon the category of the financing bank. The prevailing quantum of refinance for various agencies are as under: Agency North Eastern Region and Sikkim For SCARDBs For SCBs, RRBs and CBs All other Regions All agencies i.e. SCARDBs, SCBs, RRBs and CBs 90% of the bank loan 95% of the bank loan 90% of the bank loan Quantum of Refinance

10. Capital Investment Subsidy Scheme for construction/ modernization/ expansion of cold storages and storages for horticultural produce NABARD provides refinance support to various eligible financing banks for financing cold storages under its normal refinance programme, the guideline for which are issued from time to time. A cheklist to be used by the bankers for submitting the proposal for refinance is given at Annexure V. Government of India has sanctioned a capital investment subsidy scheme for construction/ modernization/ expansion of cold storages and storages for horticultural produce. The details of the scheme are placed at Annexure VI. National Bank for Agriculture and Rural Development (NABARD) has been made a nodal agency for promoting the activity through credit delivery system. It has been planned to create an additional capacity of 12 lakh

tonnes of new units and rehabilitation of 8 lakh tonnes of closed units under the scheme. 11. Dos and Don'ts In order to safeguard the interest of the bankers and borrowers, it would be necessary to take certain precautionary measures. As a ready reckoner, some of the important aspects are shown in the form of Dos and Don'ts in Annexure VII for success of the unit. Annexure I Desired Storage Environment of Fruits and Vegetables in the cold storage Commodity Apple Apricots Avocado Asparagus Beans, green Beet root Broccoli Black berry Cabbage Carrots Cauliflower Cherries Cucumber Brinjal Grapes Lemons Lettuce Lime Mango Melon water Orange Peach Potato Annexure II Assumptions for working out economics of a 5000 MT capacity potato cold storage 1. Capacity utilization : First year - nil, Second year - 80%, Third year onwards 100%. 2. 70% of the capacity is rented out and rest 30% capacity is used to store potato owned by the promoter(s). 3. Rental charges per season per MT of potato are Rs. 700/-. 4. Marketing margin on own potato considered at Rs. 3000/- per MT. 5. Pledge loan margin of 2% has been assumed on 20% of total handling, considering per ton price of potato at Rs.2500/ MT. 6. Electricity and other utilities expenses considered at Rs. 210/- per MT per annum. 7. Lump sum establishment and office expenses considered as Rs. 2 lakhs per annum. 8. Expenditure on maintenance and repairs considered as Rs. 20/- per MT per annum. 9. Expenditure on gas, fuel and lubricants considered as Rs. 10/- per MT per annum. 10. Labour charges for loading and unloading of potato in the cold store considered as Temperature (oC) -1 - 3 -0.5 - 0 7 - 13 0-2 4-7 0-2 0-2 -0.5 - 0 0-2 0-2 0-2 0.5 - 0 7 - 10 0-2 -1 - 1 4 - 15 0-1 3 - 10 11 - 18 2-4 0 - 10 -1 - 1 1.5 - 4 Relative Humidity (%) 90 - 98 90 - 95 85 - 90 95 - 97 90 - 95 95 - 97 90 - 95 95 - 97 90 - 95 90 - 95 90 - 95 90 - 95 90 - 95 90 - 95 85 - 90 86 - 88 95 - 98 85 - 90 85 - 90 85 - 90 85 - 90 88 - 92 90 - 94

Rs. 15/- per MT. 11. Insurance charges for the potato considered as Rs. 20/- per MT per season. 12. Interest on working capital considered at 18% per annum for six months on an average in a year. 13. Margin money considered at 25% of the financial outlay. 14. Interest on term loan considered at 15% per annum. 15. Even though the life of the cold storage will be much more, the life has been considered as 15 years for working out internal rate of return. 16. Depreciation rate of 5% and 15% has been considered for civil structures and plant & respectively. 17. Repayment period of nine years with one year grace period has been considered. The interest during first year has been capitalized and repayment of principal has been considered from third year. Annexure III BROAD TECHNICAL PARAMETERS FOR A 5000 MT COLD STORAGE Land requirement Storage space requirement Technology preferred Cold storage room height 2 acres 17000 cubic metre Gravity circulation/ Bunker type/ Fincoil 12.2 to 18.5 m

Avg. cost of investment Civil cost Insulation cost Equipment cost Miscellaneous cost Total

Rs. per MT 1400 350 1100 150 3000

Total Cost (Rs. lakhs) 70 17.5 55 7.5 150

Operational cost Electricity & utilities Establishment expenses Maintenance and repair Gas, Fuel and Lubricants Labour charges Insurance

Rs./MT/year 210 35 20 10 15 20

Total Electrical load

125 kW

a) MEANS OF FINANCE Rs. (lakhs) Total Project Cost Margin Money Term loan Rate of interest on working capital 25% 75% 18% 150.00 37.50 112.50

Rate of Interest on term loan 15%

(b) INCOME AND EXPENDITURE STATEMENT (c) CASH FLOW STATEMENT (d) REPAYMENT DETAILS (e) FINANCIAL INDICATORS (f) DEPRICIATION SCHEDULE (g) TERM LOAN SCHEDULE

ANNEXURE V CHECK LIST FOR COLD STORAGE PROJECTS A) General Information 1 2 3 4 5 6 Name ,location and office address of the cold storage unit Project background, area of operations ( no. of blocks proposed to be covered and/ or city / market targeted) Population of the area, crops being grown, land holding pattern, area under irrigation. Production of storage commodity in the area . Demand of the commodity in the area. Names of the financing bank(s) / branch(es) and whether the scheme is in their service area. 7 Approval of the scheme/constructions from the competent authority

B) The Project 1 2 Objectives of the project Capacity of the project and justification thereof

C) Promoters 1 2 3 Status of the promoters/ company - whether individual/ society/ partnership firm/ private limited company/ public limited company Background of the promoters - educational/ technical/ agricultural/ business and length of experience Financial health of the promoter/s(to be supported with the documents)

4 5

Competence of the promoter/s for the project Other activities being taken up/ planned

D) Technical Aspects i) Availability of commodity 1 2 3 4 5 6 7 8 Commodity proposed to be stored Area under the commodity for past five years in the area of operation and production thereof / demand of the product in the target market Projections of the production - consumption figures for next nine years Number of existing cold storage units in the area of operation and their installed capacities. Capacity utilization achieved by the existing units in previous three years and their financial health Proposed pattern of capacity utilization i.e., for self , farmers and traders Contract condition of storage of the proposed commodity with farmers and traders If there is a scope of incorporating an ice plant in the unit , the capacity requirement and details of the unit ii) Capacity and Location 1 2 3 4 Locational advantage of the unit Distance from the main market for the commodity Location of the nearest cold storage from the proposed site & its capacity. Details about the site - Area of the plot/ Site plan indicating the existing metalled roads and the natural drainage 5 6 7 8 9 10 11 12 13 Copy of the land records clearly indicating the title and cost Distance from the nearest Railway station and existing metallic road Availability and suitability of water for the activity Water test report indicating the hardness of the water Availability of electricity at the site/ Distance from the existing HT line Other communication facilities available near the site Any other consideration for selection of proposed site Status of site regarding use of land for non agricultural purposes Whether clearance has been obtained from Pollution Control Board / competent authorities for constructions, power connection. iii) Civil Structures 1 2 3 4 5 Items proposed under site development and their detailed specifications ( storm water drainage systems , roads , boundary walls , quantum of earthwork , gates etc.) Soil test report for load bearing capacity of the soil Details of building clearly indicating the size of each building(L/B/H) and justification for the size Layout plan for the proposed structures indicating existing structures, if any Ambient temperature conditions and Provisions for insulation of the structures - the insulation material ,thickness of the insulation for different walls (side walls, roof and

floor ) , area and cost of insulation. 6 7 8 9 10 Design details of racks proposed Provisions proposed for loading/ unloading of proposed commodity in cold storage Arrangements proposed for drying/ sorting/ grading of the commodity before/ after storage and its justification Analysis of the rates considered for preparing the estimates vis-à-vis rates as per SOR for the area and base year of the SOR Any other relevant information

iv) Plant and Machinery and Utilities 1 2 3 4 5 6 7 8 9 10 Type of cold storage technology and justification Tonnage of refrigeration proposed and heat load calculations for the proposed capacity Details of the machines proposed to be procured including their technical specifications and power requirement Criteria adopted for selection of the proposed machinery Stand-by items proposed under machinery and their justification Source of the machinery Total power requirement and arrangement for the same List of essential loads to be connected to the stand-by power arrangement Details of water requirement and proposed source of water Details of the well, pumpset, over head tank and piping works

E) Marketing 1 2 3 4 5 Arrangement for procurement of the commodity for storage forward and backward linkages Services proposed to be offered by the unit. Utilization plan of the unit for proposed services Existing rates for different services and their trend for last five years Capacity utilization proposed and justification for the same

F) Organizational Setup 1 2 3 Organization Structure , details of manpower requirement and salary structure Availability of technical manpower Availability of skilled and unskilled labours

G) Financial Information ( i ) Project Outlay 1 2 3 4 item wise cost proposed under site development and their quantity of work analysis Item wise cost proposed under Civil structures and their quantity of work analysis Item wise details of the cost of machinery with supporting quotations / literature etc. Cost of miscellaneous equipments including office equipments, communication system fire fighting equipment etc. 5 Cost proposed under electrification and item wise cost breakups

6 7 8 9 (ii) 1 2 3 (iii)

Cost proposed for stand-by power arrangement ` Cost proposed for water supply systems such as construction of well / digging of tubewell , installation of pumpset, construction of overhead tank and piping works Any other arrangement / cost proposed may be described with proper details Cost of Erection and Commissioning Means of Finance : Total Outlay Margin Money Loan Requirement Lending terms: Rate of interest, grace period, repayment period, down payment, nature of security, availability of government guarantee for bank loan/ refinance, sources and extent of availability of subsidy etc.

(iv)

Proposed schedule of implementation .Year wise physical and financial programme, bank loan refinance requirement.

( v ) Estimates of unit wise aggregate income, expenditure and surplus from the cold storage, comments on the financial viability of the project along with cash flow, B/C ratio, net present worth, financial rate of return , Internal rate of return and Debt Service Coverage Ratio (vi) (vii) (ix) ( x) Assumptions made for calculating income and expenditure statement Income and Expenditure Statement for next nine years Socio-economic benefits including employment generation and benefits to farmers Comments on the financial position of the borrowers/ implementing agency. In case of companies, partnership firm or society an analysis of their financial position and audited financial statements for last three years (xi) (xii) Infrastructure available for project implementation SWOT Analysis

(viii) Sensitivity Analysis

(xiii) Conclusions and recommendations Annexure VI Details of Capital Investment Subsidy Scheme for Construction/ Modernization/ Expansion of cold storages and storages for horticultural produce for the year 1999-2000 1. Eligible Borrowers : Partnership firms, cooperative societies, private/ public joint sector companies, Agricultural Produce Marketing Committees, Marketing Boards and Agro Industries Corporations. 2. Eligible Banks for Refinance from NABARD : Commercial Banks (CBs and RRBs), Cooperative Banks (SCBs and SCARDBs), ADFCs (Bangalore, Chennai and Hyderabad). 3. Project Cost : Depending upon the capacity, technology used for cold storage/ godowns on the basis of actuals/ estimates/ invoices of machineries, etc. 4. Type of technology : Preference is given for modern design/ technology and energy saving devices. 5. Quantum of Subsidy : •The subsidy is available only in States/ Union territories/ Areas which do not administer or control rentals for cold storages and there are no restrictions on the operation of these units. •Rs. 1000/ per MT of cold storage/ storage capacity created additionally subject to 25% of

the project cost per beneficiary. For calculating subsidy, the capacity of cold storage can be decided by providing a volume of 3.4 cubic meter per MT or 120 cubic feet per MT of storage. •As per circular No. 280/ICD-14/2003 dated December 23, 2003, NABARD hence forth will be restricting the payment of subsidy for a maximum capacity of 5000 MT irrespective of the fact whether the capacity created is higher than 5000 MT and the total outgo of subsidy is within Rs. 50.00 Lakh. •The sanction of subsidy under the scheme is subject to availability of funds, the instructions/ guidelines issued by GOI from time to time. •Subsidy would be released to the financing bank on submission of completion certificate by the borrower through the financing bank. The subsidy will be kept in separate account by the financing bank and the repayment schedule will be drawn on the loan amount (including subsidy) in such a way the subsidy amount is adjusted after the bank loan portion is liquidated. 6. Margin Money : 15% to 25% of the project cost depending upon the status of the borrower. 7. Term loan for financing banks/ Institutions (ADFCs) : Balance amount (including subsidy, where available) 8. Rate of interest to be charged from the borrower : Size of limit Commercial Banks/ RRBs SCBs/ SCARDBs Size of Limit For loans upto Rs. 2.00 Lakh Commercial Banks Not exceeding PLR of the bank SCBs/ SCARDBs Not exceeding PLR of the convener bank of the state level bankers committee (SLBC) of the concerned state Not exceeding 1.00% p.a. above PLR charged by the sponsor bank of the state level bankers committee (SLBC) of the concerned state

For loans above Rs. 2.00 Lakh

Not exceeding 1.00% p.a. above PLR of the bank

9. Rate of interest on refinance amount to be charged to financing bank : from 5.50% to 6.75% p.a. depending upon the loan size 10. Quantum of Refinance : 90% of the amount financed to borrower (including subsidy) 11. Repayment period : Depending upon cash flow and will be upto 9 years including a grace period of two years. 12. Other Conditions : The terms and conditions as applicable to project lending by financing banks and / or refinance by NABARD including the technical feasibility and financial viability are applicable to the projects under the scheme. The borrower/ financing bank/ shall furnish the project report in respect of the scheme as prescribed by GOI/ NHB/ NABARD for the purpose of monitoring and physical checking of projects. Annexure VII Dos and DON'Ts Dos 1 Don'ts Suitability of site with proper elevation, Site in a low lying area with poor road drainage and linkages by road and other and other communication linkages must communications must be ensured. be avoided.

2

Land should be converted to non agricultural category. Soil should be tested for its load bearing strength and matching rack design should be adopted. Necessary permission from local authorities for construction of cold storage should be obtained. Capacity of the plant and its room temperature should be matched to the product to be stored and market size. Selection of technology and machinery should be for power efficiency, low investment and maintenance cost. Plant operation may be planned in a manner to not exceed an average 12 hours operation a day. Refrigeration system should be properly pressure tested and vacuum tested for safety. Soft water should be used for plant operation. Trained personnel should be employed for operating the plant and maintaining desired room conditions. Proper standby equipment like compressor with motor and water circulation pump should be provided.

Agricultural land should not be used for construction of cold storage without converting it to non agricultural category. Do not avoid soil load bearing test and proper rack design. Don't avoid taking permissions from local authorities for constructions. Don't select the capacity of the cold storage arbitrarily. Costly and energy intensive technology should be avoided. Plant operation for more than 12 hours a day should be avoided. Proper pressure testing and vacuum testing of the refrigeration system should not be over looked. Don't use hard water without softening it. Untrained and inexperienced personnel should be avoided for critical plant operations. Standby provisions for critical equipment should not be avoided to save on cost.

3

4

5

6

7

8

9 10

11

12

Assured electricity supply matching to the Don't compromise on DG set to ensure electrical power requirement should be assured power supply. provided. In case of power failures, the supply should be ensured by DG set matching to the essential power requirement of the unit. Proper safety provisions like fire extinguishers and safety alarms should be provided. Proper insurance cover should be taken for building, plant and machinery and stored stocks to take care of unforeseen risk. Don't compromise on safety aspects for risk free operation of the unit. Don't avoid insurance cover to save on operational costs.

13

14

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Fisheries Composite Fish Culture Introduction

Fish is the cheapest and most easily digestible animal protein and was obtained from natural sources from time immemorial for consumption by h beings. However, due to over exploitation and pollution, the availability of fish in natural waters have declined considerably forcing scientists to various methods to increase its production. Fish farming in controlled or under artificial conditions has become the easier way of increasing th production and its availability for consumption. Farmers can easily take up fish culture in village ponds, tanks or any new water body and can improve financial position substantially. It also creates gainful employment for skilled and unskilled youths. The technology developed for fish culture in which than one type of compatible fishes are cultured simultaneous is the most advanced and popular in the country. This technology is known as Com Fish Culture. This technology enables to get maximum fish production from a pond or a tank through utilization of available fish food organisms in natural niches, supplemented by artificial feeding. Any perennial fresh water pond/tank retaining water depth of 2 metres can be used for fish c purpose. However, the minimum level should not fall below one metre. Even seasonal ponds can also be utilised for short duration fish cu 1.1. Fish species involved in composite fish

cu

Depending on the compatibility and type of feeding habits of the fishes, the following types of fishes of Indian as well as Exotic varieties have identified and recommended for culture in the composite fish culture techn Species Indian Major Carp Catla Rohu Mrigal Exotic carps Phytoplankton feeder Silver carp Grass carp Common carp Herbivorous Detritivorous/Omnivorous Surface, column and marginal areas Bottom feeder Surface feeder Feeding habit Feeding

Zoo plankton feeder Omnivorous Detritivorous

Surface feeder Column feeder Bottom feeder

2. Potential :The area under tanks and ponds available for warm fresh water aquaculture is estimated to be 2.41 million ha. In addition 0.1.31 million swamps, beels, etc. and low lying water logged area not good for agriculture as also any land where there is copious water supply can be convert fish farming. Out of the total inland fish production of 4.7 lakh tonnes around 80% is contributed by the culture sector. The average productivity ponds at present is to the tune of 2500 kg/ha/year. This shows the tremendous scope for fish culture in the country. Only 15 % of the of the potentia of tanks and ponds available is developed so far, showing immense possibilities for horizontal expansion of composite fish cu

3. Technical Parameters : Technical parameters of composite fish culture has been enclosed as Annexure E - I which includes site selection, ite development, pre and post stocking operations, stocking density, fertilisation, feeding

4. Ma The margin money may be considered @ 5,10 & 15% for small, medium and large farmer respectively and 25% for companies and partnership

5. Su Subsidy is available for various items like renovation/ repair of ponds, construction of new ponds, first year inputs etc. under a centrally sponsored su scheme implemented by majority of the State Governments through FFDA's for different categories of farmers and also from National Fis Development Board (NFDB) details of which may be obtained from concerned Fisheries Departments or from the website of NFDB www. nfdb.ap. respectively. 6. The a) b) c) d) e) Eligible borrowers An A

following

category

of

are

eligible

to

avail

Borro c Indiv com

A A A group of

Partnership co-operative fish

so far

Training in fish farming is being provided by the FFDA's to the eligible borrowers and it is essential that the borrower has prior knowledge of fish fa before availment of bank

7. Financial Outlay The details of Capital Cost and Recurring Cost have been indicated in Annexure - II. As per Annexure E - II the capital cost for excavation of 1 Ha works out to be Rs1.065 lakh /- and the recurring cost as Rs 1.113 lakh /-. However, the cost is indicative and actual assessment of the cost param have to be done while submitting the project to the 8. Financial

Ana

The i). ii). iii). The

scheme

is NPW BCR

financially @ @ IRR financial viability

viable

and

the 15% 15%

financial Rs:

parameters

are 4.005 :

as

fo

1.54 above , IRR BCR are given in

details

of

the

viz;

Cash

flow

Annexure

E-

9. Repay Repayment of bank loan is possible in 8 years in equated annual insatments with a moratorium on repayment of principal for the first year . A ten repayment schedule is given in Annexure E

10. Rate of in Interest rate to be charged to the ultimate borrowers would be as indicated by bank/RBI/NABARD from time to time depending on quantum of loan am and the agency providing the 11. Security

from

the

ultimate

beneficiaries

may

be

obtained

as

per

the

guidelines

of

RBI

issued

from

time

Se to

12. Rate of Refin NABARD provides refinance assistance for fish culture to Commercial banks, Cooperative banks and Regional Rural Banks. The rate of refinance is by NABARD from time to . Annexure ETechnical Technical parameters that needs to be considered for Composite Fish Culture project are as

Param

follow

1. Selection of P The main criteria to be kept in mind while selecting the pond is that the soil should be water retentive, adequate supply of water is assured and th pond is not in a flood prone area. Derelict, semi derelict or swampy ponds can be renovated for fish culture by dewatering, desilting, repair embankments and provision of inlet and outlet. The pond may be owned by the individual or taken on lease in which case the lease period should be or coterminous with the repayment period. The eligible items of pond development are as follows:

i) ii) iii) iv) v) vi) vii)

Desilting of existing ponds Deepening of shallow ponds. Excavation of new ponds. Impoundment of marginal areas of water bodies. Construction / repairs of embankments. Construction of Inlets / Outlets.

Any other item like civil structures, watchmen sheds, pump sets water supply arrangements / electricity supply arrangements depending on requirements of the project based on its size etc.

2. Pond Management: Pond Management plays a very important role in fish farming before and after the stocking of fish seed. Various measures that are required undertaken in pre and post stocking practices are tabulated below

A) Prestoc In case of new ponds, pre stocking operations starts with liming and filling of the pond with water. However, the first step for existing pond req development deals with clearing the pond of unwanted weeds and fishes either by manual, mechanical or chemical means. Different method employed for i) ii) netting Removal of weeds and cake @ by Manual/Mechanical predatory fishes 2500 kg/ha metre or and or through other sun animals drying Chemical by the pond

m

Removal of unwanted or using mahua oil

rep

by

iii) Liming - The soils/ tanks which are acidic in nature are less productive than alkaline ponds. Lime is used to bring the pH to the desired lev addition lime also has the following effects a) b) c) Increases buffer the the and resistance avoids of fluctuations soil of to

Acts It

as increases

para

d) e)

Its It

toxic

effect hastens

kills

the organic

parasites;

decompo

The normal doses of the lime desired ranges from 200 to 250 Kg/ha. However, the actual dose has to be calculated based on pH of the soil and wa follows : Soil pH 4.5-5.0 5.1-6.5 6.6-7.5 7.6-8.5 The pond is required to 8.6-9.5 be filled with rain water or water from other sources after Lime (kg/ha) 2,000 1,000 500 200 Nil liming in case it is a new

iv) Fertilisation/ Manuring :

Fertilisation of the pond is an important means for intensifying fish culture by increasing the natural productivity of the pond. The fertilisation schedu to be prepared after studying the quality of the pond soil. A combination of both Organic and Inorganic fertilisers may be used for best results. The fe programme has to be suitably modified depending on the growth of the fish, available food reserve in the pond, physico chemic al conditions of the and climatic conditions. : Organic : :

a) b) Inorganic

Organic manure to be applied after a gap of 3 days from the date of lim Cowdung @ 5000 kg/ha or any other organic manure in equivalent manurial v Inorganic fertilisation to be undertaken after 15 days of organic manuring. Requirement of nitrogenous and phosp fertilisers would vary as per the nature of the soil fertility indicated b However any one of the nitrogen and phosphate fertilisers could be used as per given rate.

Inorganic Fertiliser Application (kg/ha/month) Soil fertility status 1. Nitrogen (mg/100 i) High ii) Medium iii) Low (upto 25) 2. (mg/100 gm soil) i) ii) iii) Low (upto 3) B) STOCKING: High Medium g Ammonium sulphate soil) 70 (51-75) 90 (26-50) 140 Urea 30 40 60 Triple super Phosphate 15 20 30

Phosphorus Single super phosphate (7-12) 40 (4-6) 50 70

The pond will be ready for stocking after 15 days of application of fertilisers. Fish fingerlings of 50- 100 gm size (approx) should be used for stock 5000 nos. per hectare. However, if fingerlings of smaller size are used, suitable allowance may be made accounting for mortality. The present m envisages stocking of advanced fingerlings and rearing for 10-12 months.Depending on availability of seed and market condition, stocking can be o or 6 species combination in the following Species combination (ratio) Species Catla Rohu Mrigal Silver Carp Grass Carp Common Carp

3-species 4.0 3.0 3.0 -

4-species 3.0 3.0 2.0 2.0

6-species 1.5 2.0 1.5 1.5 1.5 2.0

Since the market demand for Indian major carps are very good especially that of Catla and Rohu, the model is prepared based o stocking of Indian major carps alone in the stocking density mentioned a

C

POST

STOCK

a) Supplementary feeding: Fishes need much more food than what is available naturally in the pond. Fishes can be fed with a mixture of rice bran and oilcakes in the ratio 4:1. D the high cost of Ground nut Oil Cake (GOC) farmers have tried using alternate sources like Cotton seed oil cake which is comparatively cheape GOC. GOC and cotton seed oil cake can be mixed in equal proportions and fed to the fish and is reported to give almost the same growth rate as t GOC. The feed should be placed on a feeding tray or in feeding bags and lowered to the pond bottom or it can be dispersed at the corners of the After some time the fishes will get used to this type of feeding and aggregate at the same place at particular time for regular feeding thereby reducin feed losses. The recommended feeding rate is 5 - 6 % of the body weight upto 500gm size of fish and then reduce to 3.5% of body weight from 1000gm size . The feeding is supplementary in n

b) Manu i) Organic manuring may be done in monthly instalments @ 1000 k ii) Inorganic fertilisation may be done at monthly intervals alternating with organic manuring. However, the monthly rate of fertilisation will depend on productivity and the growth of the fishes. It should be ensured that excess fertilisation does not take place which may result in eutrophic

c) Harve Harvesting is generally done at the end of 1 st year, when the fishes attain average weight of 800 gm to 1.25 kg. With Proper management a produc 4 to 5 tons/ha can be obtained in a year. Harvesting is done by partial dewatering and repeated netting. In some cases complete dewatering of po resorted to. Some farmers resort to partial harvesting also depending on the season and demand for

3) Vertical expansion of fish cu A number of measures are now being employed by the entrepreneurs to increase the per hectare production of fish. Important measures adopte stocking of advanced fingerlings / yearlings by stunning the growth of fish seed during first year, heavy stocking and multiple harvesting after the attain a size of 500 gms., multiple stocking and multiple harvesting, use of aerators, integrated fish farming with animal husbandry activities like poultry, piggery or duckery to get daily organic manuring to the pond thus increasing its fertility. It is possible to increase the per hectare production o to 7 to 10 tonnes per ha per year by employing different methods as indicated above. Annexure Indicative cost of composite fish culture Capital Cost A S.No 1 2 3 4 5 6 7 B 1 2 3 4 5 6v 7 9 10 Particulars Site clearance Construction of pond including digging, bund construction and compaction and consolidation Diesel Pump Set Inlet/outlet sluices Store Room/rest room Nets and other implements Miscellaneous Total "A" Operational cost for one crop ( one year ) Drying, desilting and plouging Lime Single Super Phosphate Urea Raw Cow Dung Fish Seed Catla (2000), Rohu(1500) and Mrigal (1500)@Rs 5 each Fish Feed Harvesting charges per kg Miscellaneous Total "B" Total A +B LS LS LS Kgs Kgs Kg Tons Nos Kg LS 500 250 125 10 5,000 6,000 4000 LS 5.00 5.00 5.00 500.00 5.00 12.00 0.50 Sq ft 80 Hrs 3 HP Units Quantum LS 40 1 Rate (Rs.) 3000 1200 30000 L/S 150 L/S L/S E-

Amou Total

48

30

5

12

5

3

106

2

1

5

25

72

2

1

112

218

Annexure E III Financial analysis, IRR, BCR Year 1 A. Cost 1. Fixed Costs 2. Recurring Costs Total 1. Income from sale of fish 2. Net Income 3. NPV Costs 4. NPV Benefits 5. NPV 6. BCR D. IRR Annexure Repayment Total Margin Rate Bank Loan 1.065 1.124 2.189 2.00 -0.189 7.444 11.449 +4.005 1.54:1 >50 % EIV Schedule lakh lakh 12% --1.124 1.124 2.00 0.876 --1.124 1.124 2.00 0.876 ------1.124 1.124 2.00 0.876 --1.124 1.124 2.00 0.876 1.124 1.124 2.00 0.876 --1.124 1.124 1.124 1.124 2.00 2.00 Year 2 Year 3 Rs in lakh Year 4 Year 5 Year 6 Year 7 Year 8

0.876 0.876

financial (15%) of - Rs 1.860 lakh

Outlay interest

Rs

Rs -

2.189 0.328

Year 1 2 3 4 5 6 7 8

Net Income 0.876 0.876 0.876 0.876 0.876 0.876 0.876 0.876

Interest 0.223 0.223 0.191 0.160 0.128 0.096 0.064 0.032

Principal 0.000 0.265 0.265 0.265 0.265 0.265 0.265 0.270

Total outgo 0.223 0.488 0.456 0.425 0.393 0.361 0.329 0.302

Bank loan O/S 1.860 1.595 1.330 1.065 0.800 0.535 0.270 0.000

Net Surplus 0.653 0.388 0.420 0.452 0.483 0.515 0.547 0.574

DSCR 3.925 1.795 1.920 2.063 2.230 2.427 2.661 2.896

Repayment 8 years with one year grace on payment of principal

Model Bankable Projects Animal Husbandry Dairy Farming

1. Introduction Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gobar gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilised for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers. 2. Scope for Dairy Farming and its National Importance. The total milk production in the country for the year 2008-09 was estimated at 108.5 million metric tonnes and the demand is expected to be 180 million tonnes by 2020. To achieve this demand annual growth rate in milk production has to be increased from the present 2.5 % to 5% . Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming. 3.Financial Assistance Available from Banks/NABARD for Dairy Farming. 3.1. Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial bank, regional rural bank or co-operative bank in their area in the prescribed application form which is available in the branches of financing banks. 3.2. For dairy schemes with very large outlays, detailed project reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Cost towards land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. 4.Scheme Formulation for bank loan 4.1 A Scheme can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Cooperative Society / Union / Federation / commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farms and government / military / agricultural university dairy farms in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies, if existing in the villages would provide all supporting facilities particularly for marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. 4.2 The scheme should include information on land, livestock markets, availability of water, feeds, fodder, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance

available from State Government, dairy society/union/federation. 4.3 The scheme should also include information on the number and types of animals to be purchased, their breed, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the Project report. A format developed for formulation of project report for a dairy farm is given as Annexure I. 5.Scrutiny of Schemes by banks. The scheme so formulated should be submitted to the nearest branch of the bank. The bank's officer can assist in preparation of the scheme or filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability. (A) Technical Feasibility - this would briefly include 1. Nearness of the selected area to veterinary, breeding and milk collection centre and the financing bank's branch. 2. Availability of good quality animals in nearby livestock market 3. Availability of training facilities. 4.Availability of good grazing ground/lands. 5.Availability of Green/dry fodder, concentrate feed, medicines etc. 6.Availability of veterinary aid / breeding centres and milk marketing facilities near the scheme area. (B) Economic Viability - this would briefly include 1. Unit Cost 2. Input cost for feed and fodder, veterinary aid, breeding of animals, insurance, labour and other overheads. 3.Output costs i.e. sale price of milk, manure, gunny bags, male/female calves, other miscellaneous items etc. 4.Income-expenditure statement and annual gross surplus. 5.Cash flow analysis. 6. Repayment schedule (i.e. repayment of principal loan amount and interest). Other documents such as loan application form, security aspects, margin money requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme. 6.Sanction of Bank Loan and its Disbursement. After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds, purchase of equipments and machinery, purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. The end use of the funds is verified and constant follow-up is done by the bank. 7.Lending terms - General 7.1Outlay Outlay of the project depends on the local conditions, unit size and the components included in the project. Prevailing market prices may be considered to arrive at the outlay. 7.2 Margin Money: Margin depends on the category of the borrowers and range from 5 to 25%. 7.3 Interest Rate for ultimate borrower : Banks are free to decide the rates of interest within the overall guidelines. However, for working out the financial viability and bankability of the model projects we have assumed the rate of interest as 12 % p.a. 7.4 Security Security will be as per NABARD/RBI guidelines issued from time to time. 7.5 Repayment period of loan Repayment period depends upon the gross surplus in the scheme. The loan will be

repaid in suitable monthly/quarterly instalments usually within a period of five to seven years. 7.6Insurance The animals and capital assets may be insured annually or on long term master policy, where ever it is applicable. A model project with 10 buffaloes is given as Annexure II. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated.

Annexure I FORMAT FOR PROJECT REPORT PREPARATION - DAIRY FARM 1. GENERAL i) Nature and objectives of the proposed scheme ii) Details of proposed investments iii) Specification of the project area iv) Name of the financing bank branch v) Status of beneficiary: (individual/Partnership/Company/Corporation/Co-operative Society / Others) vi) Details of borrowers profile (a) Capability (b) Experience (c) Financial Soundness (d) Technical/Other special Qualifications (e) Technical/Managerial Staff and adequacy thereof 2. TECHNICAL ASPECTS : a) Location, Land and Land Development : i) Location details of the project ii) Total Area of land and its cost iii) Site map iv) Particulars of land development, fencing, gates, etc. b) Civil Structures : Detailed cost estimates along with measurements of various civil structures - Sheds - Store room - Milk room - Quarters, etc. c) Equipment/Plant and Machinery : i) Chaff cutter ii) Silo pit iii) Milking machine iv) Feed grinder and mixer v) Milking pails/milk cans vi) Biogas plant vii) Bulk coolers viii)Equipment for manufacture of products ix) Truck/van (price quotations for the above equipments) d) Housing : i) Type of housing ii) Area requirement - Adults - Heifers (1-3 years) - Calves (less than 1 year) e) Animals : i) Proposed species ii) Proposed breed iii) Source of purchase iv) Place of purchase v) Distance (km.)

vi) Cost of animal (Rs.) f) Production parameters : i) Order of lactation ii) Milk yield (ltrs. per day) iii) Lactation days iv) Dry days v) Conception rate vi) Mortality(%) - Adults - Young stock g) Herd projection (with all assumptions) : h) Feeding : i) Source of fodder and feed - Green fodder - Dry fodder - Concentrates ii) Fodder crop rotations - Kharif - Rabi - Summer iii) Fodder cultivation expenses iv) Requirement and costs : Quantity required (kg./day) Cost(Rs. / Kg) Green Fodder Dry Fodder Concentrates i) Breeding Facilities : i) Source : ii) Location : iii) Distance (km.) : iv) Availability of semen : v) Availability of staff : vi) Expenditure per animal/year j) Veterinary Aid : i) Source ii) Location iii) Distance (km.) iv) Availability of labour and other staff v) Types of facilities available vi) If own arrangements are made a) Employed a veterinary doctor/stockman/consultant b) Periodicity of visit c) Amount paid/visit (Rs.) vii)Expenditure per animal per year (Rs.) k) Electricity : i) Source ii) Approval from SEB iii) Connected load iv) Problems of power failure v) Arrangements for generator l) Water : i) Source ii) Quality of water iii) Availability of sufficient quantity for drinking, cleaning and fodder production iv) If investment has to be made, type of structure, design and cost m) Marketing of milk : Lactation Dry Period Young Stock

i) Source of sales ii) Place of disposal iii) Distance (km.) iv) Price realised - (Rs. per liter of milk) v) Basis of payment vi) Periodicity of payment n) Marketing of other products : i) Animal - age - place of sale - price expected ii) Manure - Qty./animal Price/unit (Rs.) iii) Empty gunny bags - Number - Cost/bag (Rs.) o) Beneficiary's experience : p) Comments on technical feasibility : q) Government restrictions, if any : 3. FINANCIAL ASPECTS : i) Project Cost Sr. No. Item Capital Costs Physical Unit and Specification Cost (Rs.)

Total Capital Costs(A) Recurring Costs

Total Recurring Costs (B) Total Project Cost (A+B) ii) Down payment/margin/subsidy (Indicate source & extent of subsidy): iii) Financial viability (comment on the cash flow projection on a farm model/unit and enclose the same.) Particulars : a) Internal Rate of Return (IRR) : b) Benefit Cost Ratio (BCR) : c) Net Present Worth (NPW) : iv) Financial position of the borrowers (to be furnished in case of corporate bodies/partnership firms) a) Profitability Ratio : i) GP Ratio ii) NP Ratio b) Debt Equity Ratio : c) Whether Income Tax & other tax obligations are paid upto date : d) Whether audit is upto date (enclose copies of audited financial statements for the last three years) v) Lending Terms : i) Rate of Interest : ii) Grace Period : iii) Repayment Period : iv) Nature of Security :

v) Availability of Government guarantee wherever necessary : 4. INFRASTRUCTURAL FACILITIES : a) Availability of technical staff with bank/implementing authority for monitoring b) Details of i) technical guidance ii) training facilities iii) Govt. support /extension support c) Tie-up arrangements with marketing agencies for loan recovery d) Insurance - Type of policy - Periodicity - Rate of premium e) Whether any subsidy is available, if so amount per unit f) Arrangements for supply of green fodder and cattle feed Model Unit Cost and Economics of a 10 Buffalo Unit A. Project Cost Cost of milch animals including transportation cost Cost of construction of shed for adult animals Cost of construction of shed for calves Cost of chaff cutter Cost of equipment Capital cost Cost of concentrate feed for first batch for first month Cost of fodder cultivation in 2 acres Insurance of first batch of milch animals Recurring cost Total cost or say Margin (15%) Bank Loan B. Techno economic parameters Type of Animal No. of Animals Cost of Animal (Rs./animal) Transportation Cost/Animal Average Milk Yield (litre/day) Floor space (sqft) per adult animal Floor space (sqft) per calf Cost of construction per sqft (Rs.) Cost of chaff cutter (power operated) (Rs.) Cost of equipment per animal (Rs.) Cost of fodder cultivation (Rs./acre/season) Insurance premium (% per annum) Veterinary aid/animal/ year (Rs.) Cost of concentrate feed (Rs./kg) Cost of dry fodder (Rs./kg) No. of labourers : Graded Murrah Buffalo : 10 : 32000 : 1000 : 8 : 60 : 20 : 100 : 50000 : 1000 : 4500 : 5 : 250 : 8 : 1.50 : 1 Rs. : 330000 : 60000 : 20000 : 50000 : 10000 : 470000 : 4800 : 9000 : 16000 : 29800 : 499800 : 500000 : 75000 : 425000

Salary of labourer per month (Rs.) Cost of electricity and water/animal/year (Rs.) Margin (%) Rate of interest (%) Repayment period (years) Selling price of milk/litre (Rs./kg) Sale price of gunny bags (Rs. per bag) Lactation days Dry days

: 3000 : 150 : 15 : 12 : 7 : 16.50 : 10 : 270 : 150

  

Freshly calved animals in 1st or 2nd lactation are purchased in two batches of five animals each at an interval of 5 to 6 months. Cost of rearing calves not considered as it will be nullified by their sale value or retention value. Fodder cultivation considered in two acres and working capital for one crop / season considered. Two crops considered per year.

Manure utilised for fodder cultivation. Feeding Schedule Per Day Lactation Price (Rs.) Qty. (kg) 4 25 4 Cost Per Day (Rs.) 32.00 0.00 6.00 38.00 1 20 5 Qty. (kg) Dry Cost Per Day (Rs.) 8.00 0.00 7.50 15.50

Concentrate Feed Green Fodder Dry Fodder Total Lactation Chart Years Lactation Days Dry Days

8.00 Home grown 1.50

1 625 171

2

3

4

5

6

7

2100 2425 2425 2425 2200 2425 2425 1225 1225 1425 1450 1225 1075 208 208 196 195 200 195

Gunny Bags available for sale C. Economics Particulars 1 Sale of Milk Sale of Gunny bags Total Cost of feeding during lactation Cost of feeding during dry period Cost of fodder cultivation Veterinary aid and 1710 79800 9690 18000 2500

Years 2 2080 92150 18990 18000 2500 3 2080 92150 18990 18000 2500 4 1960 84550 22090 18000 2500 5 1950 83600 22480 18000 2500 6 2000 92150 18990 18000 2500 7 1950 92150 16660 18000 2500 277200 320100 320100 293700 290400 320100 320100 278910 322180 322180 295660 292350 322100 322050

breeding charges Labour charges Electricity and misc. charges Insurance charges Total Surplus 36000 750 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000

162740 185140 185140 180640 180080 185140 182810 145970 137040 137040 115020 112270 136960 139240

D. Calculation of BCR and IRR 1 Capital Costs Recurring Cost Total Costs Benefit Net Benefit 470000 162740 632740 278910 -353830 185140 185140 180640 180080 185140 182810 185140 185140 180640 180080 185140 182810 322180 322180 295660 292350 322100 322050 137040 137040 115020 112270 136960 139240 2 3 4 5 6 7

PW Costs @ 1153513 15% PW Benefits 1272701 @ 15% NPW B.C. Ratio I.R.R. (%) 119187.8 1.10 : 1 28.66

E. Repayment schedule Year 1 2 3 4 5 6 7 Loan Outstanding 425000 373800 322756 265587 216957 164392 88219 Gross Surplus 145970 137040 137040 115020 112270 136960 139240 Interest Principal 51000 44856 38731 31870 26035 19727 10586 51200 51044 57169 48630 52565 76173 88219 Total Repayment 102200 95900 95900 80500 78600 95900 98805 Surplus 43770 41140 41140 34520 33670 41060 40435

Model Bankable Projects Animal Husbandry Dairy Farming

1. Introduction Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gobar gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilised for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers. 2. Scope for Dairy Farming and its National Importance. The total milk production in the country for the year 2008-09 was estimated at 108.5 million metric tonnes and the demand is expected to be 180 million tonnes by 2020. To achieve this demand annual growth rate in milk production has to be increased from the present 2.5 % to 5% . Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming. 3.Financial Assistance Available from Banks/NABARD for Dairy Farming. 3.1. Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial bank, regional rural bank or co-operative bank in their area in the prescribed application form which is available in the branches of financing banks. 3.2. For dairy schemes with very large outlays, detailed project reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Cost towards land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. 4.Scheme Formulation for bank loan 4.1 A Scheme can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Cooperative Society / Union / Federation / commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farms and government / military / agricultural university dairy farms in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies, if existing in the villages would provide all supporting facilities particularly for marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. 4.2 The scheme should include information on land, livestock markets, availability of water, feeds, fodder, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance

available from State Government, dairy society/union/federation. 4.3 The scheme should also include information on the number and types of animals to be purchased, their breed, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the Project report. A format developed for formulation of project report for a dairy farm is given as Annexure I. 5.Scrutiny of Schemes by banks. The scheme so formulated should be submitted to the nearest branch of the bank. The bank's officer can assist in preparation of the scheme or filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability. (A) Technical Feasibility - this would briefly include 1. Nearness of the selected area to veterinary, breeding and milk collection centre and the financing bank's branch. 2. Availability of good quality animals in nearby livestock market 3. Availability of training facilities. 4.Availability of good grazing ground/lands. 5.Availability of Green/dry fodder, concentrate feed, medicines etc. 6.Availability of veterinary aid / breeding centres and milk marketing facilities near the scheme area. (B) Economic Viability - this would briefly include 1. Unit Cost 2. Input cost for feed and fodder, veterinary aid, breeding of animals, insurance, labour and other overheads. 3.Output costs i.e. sale price of milk, manure, gunny bags, male/female calves, other miscellaneous items etc. 4.Income-expenditure statement and annual gross surplus. 5.Cash flow analysis. 6. Repayment schedule (i.e. repayment of principal loan amount and interest). Other documents such as loan application form, security aspects, margin money requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme. 6.Sanction of Bank Loan and its Disbursement. After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds, purchase of equipments and machinery, purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. The end use of the funds is verified and constant follow-up is done by the bank. 7.Lending terms - General 7.1Outlay Outlay of the project depends on the local conditions, unit size and the components included in the project. Prevailing market prices may be considered to arrive at the outlay. 7.2 Margin Money: Margin depends on the category of the borrowers and range from 5 to 25%. 7.3 Interest Rate for ultimate borrower : Banks are free to decide the rates of interest within the overall guidelines. However, for working out the financial viability and bankability of the model projects we have assumed the rate of interest as 12 % p.a. 7.4 Security Security will be as per NABARD/RBI guidelines issued from time to time. 7.5 Repayment period of loan Repayment period depends upon the gross surplus in the scheme. The loan will be

repaid in suitable monthly/quarterly instalments usually within a period of five to seven years. 7.6Insurance The animals and capital assets may be insured annually or on long term master policy, where ever it is applicable. A model project with 10 buffaloes is given as Annexure II. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated.

Annexure I FORMAT FOR PROJECT REPORT PREPARATION - DAIRY FARM 1. GENERAL i) Nature and objectives of the proposed scheme ii) Details of proposed investments iii) Specification of the project area iv) Name of the financing bank branch v) Status of beneficiary: (individual/Partnership/Company/Corporation/Co-operative Society / Others) vi) Details of borrowers profile (a) Capability (b) Experience (c) Financial Soundness (d) Technical/Other special Qualifications (e) Technical/Managerial Staff and adequacy thereof 2. TECHNICAL ASPECTS : a) Location, Land and Land Development : i) Location details of the project ii) Total Area of land and its cost iii) Site map iv) Particulars of land development, fencing, gates, etc. b) Civil Structures : Detailed cost estimates along with measurements of various civil structures - Sheds - Store room - Milk room - Quarters, etc. c) Equipment/Plant and Machinery : i) Chaff cutter ii) Silo pit iii) Milking machine iv) Feed grinder and mixer v) Milking pails/milk cans vi) Biogas plant vii) Bulk coolers viii)Equipment for manufacture of products ix) Truck/van (price quotations for the above equipments) d) Housing : i) Type of housing ii) Area requirement - Adults - Heifers (1-3 years) - Calves (less than 1 year) e) Animals : i) Proposed species ii) Proposed breed iii) Source of purchase iv) Place of purchase v) Distance (km.)

vi) Cost of animal (Rs.) f) Production parameters : i) Order of lactation ii) Milk yield (ltrs. per day) iii) Lactation days iv) Dry days v) Conception rate vi) Mortality(%) - Adults - Young stock g) Herd projection (with all assumptions) : h) Feeding : i) Source of fodder and feed - Green fodder - Dry fodder - Concentrates ii) Fodder crop rotations - Kharif - Rabi - Summer iii) Fodder cultivation expenses iv) Requirement and costs : Quantity required (kg./day) Cost(Rs. / Kg) Green Fodder Dry Fodder Concentrates i) Breeding Facilities : i) Source : ii) Location : iii) Distance (km.) : iv) Availability of semen : v) Availability of staff : vi) Expenditure per animal/year j) Veterinary Aid : i) Source ii) Location iii) Distance (km.) iv) Availability of labour and other staff v) Types of facilities available vi) If own arrangements are made a) Employed a veterinary doctor/stockman/consultant b) Periodicity of visit c) Amount paid/visit (Rs.) vii)Expenditure per animal per year (Rs.) k) Electricity : i) Source ii) Approval from SEB iii) Connected load iv) Problems of power failure v) Arrangements for generator l) Water : i) Source ii) Quality of water iii) Availability of sufficient quantity for drinking, cleaning and fodder production iv) If investment has to be made, type of structure, design and cost m) Marketing of milk : Lactation Dry Period Young Stock

i) Source of sales ii) Place of disposal iii) Distance (km.) iv) Price realised - (Rs. per liter of milk) v) Basis of payment vi) Periodicity of payment n) Marketing of other products : i) Animal - age - place of sale - price expected ii) Manure - Qty./animal Price/unit (Rs.) iii) Empty gunny bags - Number - Cost/bag (Rs.) o) Beneficiary's experience : p) Comments on technical feasibility : q) Government restrictions, if any : 3. FINANCIAL ASPECTS : i) Project Cost Sr. No. Item Capital Costs Physical Unit and Specification Cost (Rs.)

Total Capital Costs(A) Recurring Costs

Total Recurring Costs (B) Total Project Cost (A+B) ii) Down payment/margin/subsidy (Indicate source & extent of subsidy): iii) Financial viability (comment on the cash flow projection on a farm model/unit and enclose the same.) Particulars : a) Internal Rate of Return (IRR) : b) Benefit Cost Ratio (BCR) : c) Net Present Worth (NPW) : iv) Financial position of the borrowers (to be furnished in case of corporate bodies/partnership firms) a) Profitability Ratio : i) GP Ratio ii) NP Ratio b) Debt Equity Ratio : c) Whether Income Tax & other tax obligations are paid upto date : d) Whether audit is upto date (enclose copies of audited financial statements for the last three years) v) Lending Terms : i) Rate of Interest : ii) Grace Period : iii) Repayment Period : iv) Nature of Security :

v) Availability of Government guarantee wherever necessary : 4. INFRASTRUCTURAL FACILITIES : a) Availability of technical staff with bank/implementing authority for monitoring b) Details of i) technical guidance ii) training facilities iii) Govt. support /extension support c) Tie-up arrangements with marketing agencies for loan recovery d) Insurance - Type of policy - Periodicity - Rate of premium e) Whether any subsidy is available, if so amount per unit f) Arrangements for supply of green fodder and cattle feed Model Unit Cost and Economics of a 10 Buffalo Unit A. Project Cost Cost of milch animals including transportation cost Cost of construction of shed for adult animals Cost of construction of shed for calves Cost of chaff cutter Cost of equipment Capital cost Cost of concentrate feed for first batch for first month Cost of fodder cultivation in 2 acres Insurance of first batch of milch animals Recurring cost Total cost or say Margin (15%) Bank Loan B. Techno economic parameters Type of Animal No. of Animals Cost of Animal (Rs./animal) Transportation Cost/Animal Average Milk Yield (litre/day) Floor space (sqft) per adult animal Floor space (sqft) per calf Cost of construction per sqft (Rs.) Cost of chaff cutter (power operated) (Rs.) Cost of equipment per animal (Rs.) Cost of fodder cultivation (Rs./acre/season) Insurance premium (% per annum) Veterinary aid/animal/ year (Rs.) Cost of concentrate feed (Rs./kg) Cost of dry fodder (Rs./kg) No. of labourers : Graded Murrah Buffalo : 10 : 32000 : 1000 : 8 : 60 : 20 : 100 : 50000 : 1000 : 4500 : 5 : 250 : 8 : 1.50 : 1 Rs. : 330000 : 60000 : 20000 : 50000 : 10000 : 470000 : 4800 : 9000 : 16000 : 29800 : 499800 : 500000 : 75000 : 425000

Salary of labourer per month (Rs.) Cost of electricity and water/animal/year (Rs.) Margin (%) Rate of interest (%) Repayment period (years) Selling price of milk/litre (Rs./kg) Sale price of gunny bags (Rs. per bag) Lactation days Dry days

: 3000 : 150 : 15 : 12 : 7 : 16.50 : 10 : 270 : 150

  

Freshly calved animals in 1st or 2nd lactation are purchased in two batches of five animals each at an interval of 5 to 6 months. Cost of rearing calves not considered as it will be nullified by their sale value or retention value. Fodder cultivation considered in two acres and working capital for one crop / season considered. Two crops considered per year.

Manure utilised for fodder cultivation. Feeding Schedule Per Day Lactation Price (Rs.) Qty. (kg) 4 25 4 Cost Per Day (Rs.) 32.00 0.00 6.00 38.00 1 20 5 Qty. (kg) Dry Cost Per Day (Rs.) 8.00 0.00 7.50 15.50

Concentrate Feed Green Fodder Dry Fodder Total Lactation Chart Years Lactation Days Dry Days

8.00 Home grown 1.50

1 625 171

2

3

4

5

6

7

2100 2425 2425 2425 2200 2425 2425 1225 1225 1425 1450 1225 1075 208 208 196 195 200 195

Gunny Bags available for sale C. Economics Particulars 1 Sale of Milk Sale of Gunny bags Total Cost of feeding during lactation Cost of feeding during dry period Cost of fodder cultivation Veterinary aid and 1710 79800 9690 18000 2500

Years 2 2080 92150 18990 18000 2500 3 2080 92150 18990 18000 2500 4 1960 84550 22090 18000 2500 5 1950 83600 22480 18000 2500 6 2000 92150 18990 18000 2500 7 1950 92150 16660 18000 2500 277200 320100 320100 293700 290400 320100 320100 278910 322180 322180 295660 292350 322100 322050

breeding charges Labour charges Electricity and misc. charges Insurance charges Total Surplus 36000 750 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000

162740 185140 185140 180640 180080 185140 182810 145970 137040 137040 115020 112270 136960 139240

D. Calculation of BCR and IRR 1 Capital Costs Recurring Cost Total Costs Benefit Net Benefit 470000 162740 632740 278910 -353830 185140 185140 180640 180080 185140 182810 185140 185140 180640 180080 185140 182810 322180 322180 295660 292350 322100 322050 137040 137040 115020 112270 136960 139240 2 3 4 5 6 7

PW Costs @ 1153513 15% PW Benefits 1272701 @ 15% NPW B.C. Ratio I.R.R. (%) 119187.8 1.10 : 1 28.66

E. Repayment schedule Year 1 2 3 4 5 6 7 Loan Outstanding 425000 373800 322756 265587 216957 164392 88219 Gross Surplus 145970 137040 137040 115020 112270 136960 139240 Interest Principal 51000 44856 38731 31870 26035 19727 10586 51200 51044 57169 48630 52565 76173 88219 Total Repayment 102200 95900 95900 80500 78600 95900 98805 Surplus 43770 41140 41140 34520 33670 41060 40435

Model Bankable Projects Animal Husbandry Dairy Farming

1. Introduction Dairying is an important source of subsidiary income to small/marginal farmers and agricultural labourers. The manure from animals provides a good source of organic matter for improving soil fertility and crop yields. The gobar gas from the dung is used as fuel for domestic purposes as also for running engines for drawing water from well. The surplus fodder and agricultural by-products are gainfully utilised for feeding the animals. Almost all draught power for farm operations and transportation is supplied by bullocks. Since agriculture is mostly seasonal, there is a possibility of finding employment throughout the year for many persons through dairy farming. Thus, dairy also provides employment throughout the year. The main beneficiaries of dairy programmes are small/marginal farmers and landless labourers. 2. Scope for Dairy Farming and its National Importance. The total milk production in the country for the year 2008-09 was estimated at 108.5 million metric tonnes and the demand is expected to be 180 million tonnes by 2020. To achieve this demand annual growth rate in milk production has to be increased from the present 2.5 % to 5% . Thus, there is a tremendous scope/potential for increasing the milk production through profitable dairy farming. 3.Financial Assistance Available from Banks/NABARD for Dairy Farming. 3.1. Loan from banks with refinance facility from NABARD is available for starting dairy farming. For obtaining bank loan, the farmers should apply to the nearest branch of a commercial bank, regional rural bank or co-operative bank in their area in the prescribed application form which is available in the branches of financing banks. 3.2. For dairy schemes with very large outlays, detailed project reports will have to be prepared. The items of finance would include capital asset items such as purchase of milch animals, construction of sheds, purchase of equipments etc. The feeding cost during the initial period of one/two months is capitalised and given as term loan. Cost towards land development, fencing, digging of well, commissioning of diesel engine/pumpset, electricity connections, essential servants' quarters, godown, transport vehicle, milk processing facilities etc. can be considered for loan. Cost of land is not considered for loan. 4.Scheme Formulation for bank loan 4.1 A Scheme can be prepared by a beneficiary after consulting local technical persons of State Animal Husbandry Department, DRDA, Dairy Cooperative Society / Union / Federation / commercial dairy farmers. If possible, the beneficiaries should also visit progressive dairy farms and government / military / agricultural university dairy farms in the vicinity and discuss the profitability of dairy farming. A good practical training and experience in dairy farming will be highly desirable. The dairy co-operative societies, if existing in the villages would provide all supporting facilities particularly for marketing of fluid milk. Nearness of dairy farm to such a society, veterinary aid centre, artificial insemination centre should be ensured. There is a good demand for milk, if the dairy farm is located near urban centre. 4.2 The scheme should include information on land, livestock markets, availability of water, feeds, fodder, veterinary aid, breeding facilities, marketing aspects, training facilities, experience of the farmer and the type of assistance

available from State Government, dairy society/union/federation. 4.3 The scheme should also include information on the number and types of animals to be purchased, their breed, production performance, cost and other relevant input and output costs with their description. Based on this, the total cost of the project, margin money to be provided by the beneficiary, requirement of bank loan, estimated annual expenditure, income, profit and loss statement, repayment period, etc. can be worked out and shown in the Project report. A format developed for formulation of project report for a dairy farm is given as Annexure I. 5.Scrutiny of Schemes by banks. The scheme so formulated should be submitted to the nearest branch of the bank. The bank's officer can assist in preparation of the scheme or filling in the prescribed application form. The bank will then examine the scheme for its technical feasibility and economic viability. (A) Technical Feasibility - this would briefly include 1. Nearness of the selected area to veterinary, breeding and milk collection centre and the financing bank's branch. 2. Availability of good quality animals in nearby livestock market 3. Availability of training facilities. 4.Availability of good grazing ground/lands. 5.Availability of Green/dry fodder, concentrate feed, medicines etc. 6.Availability of veterinary aid / breeding centres and milk marketing facilities near the scheme area. (B) Economic Viability - this would briefly include 1. Unit Cost 2. Input cost for feed and fodder, veterinary aid, breeding of animals, insurance, labour and other overheads. 3.Output costs i.e. sale price of milk, manure, gunny bags, male/female calves, other miscellaneous items etc. 4.Income-expenditure statement and annual gross surplus. 5.Cash flow analysis. 6. Repayment schedule (i.e. repayment of principal loan amount and interest). Other documents such as loan application form, security aspects, margin money requirements etc. are also examined. A field visit to the scheme area is undertaken for conducting a techno-economic feasibility study for appraisal of the scheme. 6.Sanction of Bank Loan and its Disbursement. After ensuring technical feasibility and economic viability, the scheme is sanctioned by the bank. The loan is disbursed in kind in 2 to 3 stages against creation of specific assets such as construction of sheds, purchase of equipments and machinery, purchase of animals and recurring cost on purchase of feeds/fodders for the initial period of one/two months. The end use of the funds is verified and constant follow-up is done by the bank. 7.Lending terms - General 7.1Outlay Outlay of the project depends on the local conditions, unit size and the components included in the project. Prevailing market prices may be considered to arrive at the outlay. 7.2 Margin Money: Margin depends on the category of the borrowers and range from 5 to 25%. 7.3 Interest Rate for ultimate borrower : Banks are free to decide the rates of interest within the overall guidelines. However, for working out the financial viability and bankability of the model projects we have assumed the rate of interest as 12 % p.a. 7.4 Security Security will be as per NABARD/RBI guidelines issued from time to time. 7.5 Repayment period of loan Repayment period depends upon the gross surplus in the scheme. The loan will be

repaid in suitable monthly/quarterly instalments usually within a period of five to seven years. 7.6Insurance The animals and capital assets may be insured annually or on long term master policy, where ever it is applicable. A model project with 10 buffaloes is given as Annexure II. This is indicative and the applicable input and output costs as also the parameters observed at the field level may be incorporated.

Annexure I FORMAT FOR PROJECT REPORT PREPARATION - DAIRY FARM 1. GENERAL i) Nature and objectives of the proposed scheme ii) Details of proposed investments iii) Specification of the project area iv) Name of the financing bank branch v) Status of beneficiary: (individual/Partnership/Company/Corporation/Co-operative Society / Others) vi) Details of borrowers profile (a) Capability (b) Experience (c) Financial Soundness (d) Technical/Other special Qualifications (e) Technical/Managerial Staff and adequacy thereof 2. TECHNICAL ASPECTS : a) Location, Land and Land Development : i) Location details of the project ii) Total Area of land and its cost iii) Site map iv) Particulars of land development, fencing, gates, etc. b) Civil Structures : Detailed cost estimates along with measurements of various civil structures - Sheds - Store room - Milk room - Quarters, etc. c) Equipment/Plant and Machinery : i) Chaff cutter ii) Silo pit iii) Milking machine iv) Feed grinder and mixer v) Milking pails/milk cans vi) Biogas plant vii) Bulk coolers viii)Equipment for manufacture of products ix) Truck/van (price quotations for the above equipments) d) Housing : i) Type of housing ii) Area requirement - Adults - Heifers (1-3 years) - Calves (less than 1 year) e) Animals : i) Proposed species ii) Proposed breed iii) Source of purchase iv) Place of purchase v) Distance (km.)

vi) Cost of animal (Rs.) f) Production parameters : i) Order of lactation ii) Milk yield (ltrs. per day) iii) Lactation days iv) Dry days v) Conception rate vi) Mortality(%) - Adults - Young stock g) Herd projection (with all assumptions) : h) Feeding : i) Source of fodder and feed - Green fodder - Dry fodder - Concentrates ii) Fodder crop rotations - Kharif - Rabi - Summer iii) Fodder cultivation expenses iv) Requirement and costs : Quantity required (kg./day) Cost(Rs. / Kg) Green Fodder Dry Fodder Concentrates i) Breeding Facilities : i) Source : ii) Location : iii) Distance (km.) : iv) Availability of semen : v) Availability of staff : vi) Expenditure per animal/year j) Veterinary Aid : i) Source ii) Location iii) Distance (km.) iv) Availability of labour and other staff v) Types of facilities available vi) If own arrangements are made a) Employed a veterinary doctor/stockman/consultant b) Periodicity of visit c) Amount paid/visit (Rs.) vii)Expenditure per animal per year (Rs.) k) Electricity : i) Source ii) Approval from SEB iii) Connected load iv) Problems of power failure v) Arrangements for generator l) Water : i) Source ii) Quality of water iii) Availability of sufficient quantity for drinking, cleaning and fodder production iv) If investment has to be made, type of structure, design and cost m) Marketing of milk : Lactation Dry Period Young Stock

i) Source of sales ii) Place of disposal iii) Distance (km.) iv) Price realised - (Rs. per liter of milk) v) Basis of payment vi) Periodicity of payment n) Marketing of other products : i) Animal - age - place of sale - price expected ii) Manure - Qty./animal Price/unit (Rs.) iii) Empty gunny bags - Number - Cost/bag (Rs.) o) Beneficiary's experience : p) Comments on technical feasibility : q) Government restrictions, if any : 3. FINANCIAL ASPECTS : i) Project Cost Sr. No. Item Capital Costs Physical Unit and Specification Cost (Rs.)

Total Capital Costs(A) Recurring Costs

Total Recurring Costs (B) Total Project Cost (A+B) ii) Down payment/margin/subsidy (Indicate source & extent of subsidy): iii) Financial viability (comment on the cash flow projection on a farm model/unit and enclose the same.) Particulars : a) Internal Rate of Return (IRR) : b) Benefit Cost Ratio (BCR) : c) Net Present Worth (NPW) : iv) Financial position of the borrowers (to be furnished in case of corporate bodies/partnership firms) a) Profitability Ratio : i) GP Ratio ii) NP Ratio b) Debt Equity Ratio : c) Whether Income Tax & other tax obligations are paid upto date : d) Whether audit is upto date (enclose copies of audited financial statements for the last three years) v) Lending Terms : i) Rate of Interest : ii) Grace Period : iii) Repayment Period : iv) Nature of Security :

v) Availability of Government guarantee wherever necessary : 4. INFRASTRUCTURAL FACILITIES : a) Availability of technical staff with bank/implementing authority for monitoring b) Details of i) technical guidance ii) training facilities iii) Govt. support /extension support c) Tie-up arrangements with marketing agencies for loan recovery d) Insurance - Type of policy - Periodicity - Rate of premium e) Whether any subsidy is available, if so amount per unit f) Arrangements for supply of green fodder and cattle feed Model Unit Cost and Economics of a 10 Buffalo Unit A. Project Cost Cost of milch animals including transportation cost Cost of construction of shed for adult animals Cost of construction of shed for calves Cost of chaff cutter Cost of equipment Capital cost Cost of concentrate feed for first batch for first month Cost of fodder cultivation in 2 acres Insurance of first batch of milch animals Recurring cost Total cost or say Margin (15%) Bank Loan B. Techno economic parameters Type of Animal No. of Animals Cost of Animal (Rs./animal) Transportation Cost/Animal Average Milk Yield (litre/day) Floor space (sqft) per adult animal Floor space (sqft) per calf Cost of construction per sqft (Rs.) Cost of chaff cutter (power operated) (Rs.) Cost of equipment per animal (Rs.) Cost of fodder cultivation (Rs./acre/season) Insurance premium (% per annum) Veterinary aid/animal/ year (Rs.) Cost of concentrate feed (Rs./kg) Cost of dry fodder (Rs./kg) No. of labourers : Graded Murrah Buffalo : 10 : 32000 : 1000 : 8 : 60 : 20 : 100 : 50000 : 1000 : 4500 : 5 : 250 : 8 : 1.50 : 1 Rs. : 330000 : 60000 : 20000 : 50000 : 10000 : 470000 : 4800 : 9000 : 16000 : 29800 : 499800 : 500000 : 75000 : 425000

Salary of labourer per month (Rs.) Cost of electricity and water/animal/year (Rs.) Margin (%) Rate of interest (%) Repayment period (years) Selling price of milk/litre (Rs./kg) Sale price of gunny bags (Rs. per bag) Lactation days Dry days

: 3000 : 150 : 15 : 12 : 7 : 16.50 : 10 : 270 : 150

  

Freshly calved animals in 1st or 2nd lactation are purchased in two batches of five animals each at an interval of 5 to 6 months. Cost of rearing calves not considered as it will be nullified by their sale value or retention value. Fodder cultivation considered in two acres and working capital for one crop / season considered. Two crops considered per year.

Manure utilised for fodder cultivation. Feeding Schedule Per Day Lactation Price (Rs.) Qty. (kg) 4 25 4 Cost Per Day (Rs.) 32.00 0.00 6.00 38.00 1 20 5 Qty. (kg) Dry Cost Per Day (Rs.) 8.00 0.00 7.50 15.50

Concentrate Feed Green Fodder Dry Fodder Total Lactation Chart Years Lactation Days Dry Days

8.00 Home grown 1.50

1 625 171

2

3

4

5

6

7

2100 2425 2425 2425 2200 2425 2425 1225 1225 1425 1450 1225 1075 208 208 196 195 200 195

Gunny Bags available for sale C. Economics Particulars 1 Sale of Milk Sale of Gunny bags Total Cost of feeding during lactation Cost of feeding during dry period Cost of fodder cultivation Veterinary aid and 1710 79800 9690 18000 2500

Years 2 2080 92150 18990 18000 2500 3 2080 92150 18990 18000 2500 4 1960 84550 22090 18000 2500 5 1950 83600 22480 18000 2500 6 2000 92150 18990 18000 2500 7 1950 92150 16660 18000 2500 277200 320100 320100 293700 290400 320100 320100 278910 322180 322180 295660 292350 322100 322050

breeding charges Labour charges Electricity and misc. charges Insurance charges Total Surplus 36000 750 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000 36000 1500 16000

162740 185140 185140 180640 180080 185140 182810 145970 137040 137040 115020 112270 136960 139240

D. Calculation of BCR and IRR 1 Capital Costs Recurring Cost Total Costs Benefit Net Benefit 470000 162740 632740 278910 -353830 185140 185140 180640 180080 185140 182810 185140 185140 180640 180080 185140 182810 322180 322180 295660 292350 322100 322050 137040 137040 115020 112270 136960 139240 2 3 4 5 6 7

PW Costs @ 1153513 15% PW Benefits 1272701 @ 15% NPW B.C. Ratio I.R.R. (%) 119187.8 1.10 : 1 28.66

E. Repayment schedule Year 1 2 3 4 5 6 7 Loan Outstanding 425000 373800 322756 265587 216957 164392 88219 Gross Surplus 145970 137040 137040 115020 112270 136960 139240 Interest Principal 51000 44856 38731 31870 26035 19727 10586 51200 51044 57169 48630 52565 76173 88219 Total Repayment 102200 95900 95900 80500 78600 95900 98805 Surplus 43770 41140 41140 34520 33670 41060 40435

Contact

Haidakhandi Samaj (India)

Postal address corporate office

Yadav Bhavan, Malla Gorakhpur Haldwani (PIN.263139), Dist. Nainital Uttarakhand INDIA



Telephone

+91-05946-281081

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