Pradhan Mantri Kisan Sampada Yojana (PMKSY-SAMPADA)

India loses an estimated 5 to 16 percent of its perishable produce between harvest and consumption. Onions rot in storage, tomatoes are dumped during gluts, milk sours in transit. This loss is the single largest reason why farm gate prices remain low even as retail prices rise. A farmer who could deliver his crop to a cold store, a processing unit or a packaging line typically realises 20 to 40 percent more than one who sells in a wet market the same day.

PMKSY-SAMPADA was launched in 2017 by consolidating several earlier food processing schemes into one umbrella structure. The goal is to build infrastructure across the value chain, from primary processing at the farm gate to consumer ready products in retail. The scheme does this not by directly giving money to farmers, but by subsidising private and cooperative investment in processing infrastructure that pulls produce from the field at better prices.

Understanding this design is critical. Farmers do not apply for SAMPADA grants. They benefit when a SAMPADA funded cold chain operator or processor sources from their farm at contract prices. The scheme works for farmers indirectly, by changing the market structure around them.

Mega Food Parks provide common infrastructure such as cold storage, warehouses, quality testing labs and effluent treatment for multiple processing units in a single industrial cluster. Grant up to Rs 50 crore per park.

Integrated Cold Chain and Value Addition Infrastructure funds cold storage, pre cooling units, IQF freezing lines and reefer transport. Grant up to Rs 10 crore per project.

Creation and Expansion of Food Processing and Preservation Capacities funds new units and capacity expansion of existing processing units. Grant up to Rs 5 crore per project, higher for difficult areas.

Agro Processing Clusters funds smaller clusters of processing units, typically anchored by an FPO or cooperative. Grant up to Rs 10 crore per cluster.

Creation of Backward and Forward Linkages funds linkage projects between farms, primary processing centres and consumer markets. Grant up to Rs 5 crore.

Food Safety and Quality Assurance Infrastructure funds testing labs and quality certification infrastructure. Grant up to Rs 4 crore.

Human Resources and Institutions funds training, research and development and skill building for the food processing sector.

Farmer Producer Organisations are increasingly important applicants under SAMPADA. An FPO that aggregates produce from 500 to 5,000 farmers can apply under the Agro Processing Cluster, Cold Chain or Capacity Creation windows to build infrastructure that captures value previously captured by traders.

The typical FPO project involves a pre cooling unit at the village level, a cold storage at the taluka level, a primary processing line (sorting, grading, packing) and a forward linkage to a retail buyer or processor. Total project cost ranges from Rs 2 crore to Rs 10 crore. With a 35 to 50 percent SAMPADA grant, an SFAC or NABARD loan and a small farmer equity contribution, the FPO can build a viable project.

The challenge for FPOs is the DPR. Few FPOs have the in house capacity to prepare a bankable DPR. The Ministry maintains a list of empanelled consultants and project management agencies. State governments also fund DPR preparation under the FPO promotion scheme. Use this support; a strong DPR is the difference between approval and rejection.

Grants are released in three to five tranches linked to physical and financial progress. A typical schedule releases 25 percent on sanction, 25 percent on completion of 50 percent of physical work, 25 percent on commissioning and the balance after a year of stabilised operations.

Each tranche requires a chartered accountant certificate on funds utilisation, a chartered engineer certificate on physical progress and an inspection by the Project Implementing Agency. Delays at any of these steps cascade into delays in the next tranche. Promoters should plan working capital to cover these gaps.

Common pitfalls in the implementation phase include changing the project scope without prior Ministry approval (any change above 10 percent requires re sanction), using grant funds for ineligible items such as land cost beyond the prescribed limit, and failing to maintain the linkage with farmers if it was a project condition. Maintain documentation rigorously; the post completion audit looks at every line of expenditure.

If a SAMPADA project is being built in your area, find out who the promoter is and what crops they will source. Reach out through the FPO or the local agriculture department to get included in the supply contract. Even informal participation as a regular supplier improves your bargaining position.

If you are part of an FPO and the FPO is considering a SAMPADA project, vote in favour of professional DPR preparation and a strong project management team. The FPO members are the ultimate beneficiaries but the project will not succeed without competent execution.

Avoid intermediaries who promise to get you direct grant money under SAMPADA. There is no individual farmer grant under this scheme. Such offers are usually fraud.

• 01Private limited companies, public limited companies, cooperatives, FPOs, SHGs, partnership firms and proprietorships engaged in food processing or related infrastructure
• 02State government agencies and PSUs implementing food processing infrastructure
• 03Project must fall under one of the seven sub schemes notified under PMKSY
• 04Promoter must demonstrate the technical and financial capacity to execute the project
• 05Bank or financial institution must commit to fund the debt portion of the project cost

• §Detailed Project Report prepared as per the scheme template
• §Incorporation and registration documents of the applicant entity
• §Financial statements for the last three years where applicable
• §Bank sanction letter or in principle approval for the debt portion
• §Land ownership or lease documents for the project site
• §Environmental and pollution clearances where applicable
• §Linkage agreements with farmers or FPOs for raw material supply where relevant

• DPR not prepared in the prescribed format or missing key financial projections
• Promoter lacking demonstrated experience in the proposed processing line
• Site without clear title or unsuitable for the proposed infrastructure
• Bank funding not tied up at the time of expression of interest
• Project overlapping with another sanctioned project in the same catchment area

• PMKSY-SAMPADA scheme guidelines and sub scheme notifications, Ministry of Food Processing Industrieslink ↗
• SAMPADA portal for online applications and project tracking, Ministry of Food Processing Industrieslink ↗