Infrastructure Subsidy for Agro Processing Cluster: A Complete Guide to the APC Scheme

India’s agro-processing sector is growing rapidly as demand for packaged, safe, and value-added food products continues to rise. To bridge the gap between farmers, processors, and markets, the government has introduced the Agro Processing Cluster (APC) Scheme.

This scheme not only strengthens supply chains but also provides critical support in the form of an infrastructure subsidy for agro processing cluster projects, enabling investors, cooperatives, and farmer organizations to set up modern food processing hubs close to production areas.

Objectives of the Agro Processing Cluster (APC) Scheme

The scheme has been carefully designed to:

• Build modern food processing infrastructure near production zones.
• Provide end-to-end preservation facilities, ensuring food quality from farm to consumer.
• Strengthen farmer–market linkages by developing efficient supply chains.
• Encourage cluster-based growth, bringing together multiple processing units for economies of scale.

Salient Features of the Scheme

• Minimum Units Requirement: Each cluster must house at least 5 food processing units, with a minimum combined investment of ₹25 crore.
• Unit Setup: Units can be established by the Project Implementing Agency (PIA) or other entrepreneurs.
• No Direct Aid to Units: While the cluster infrastructure is subsidized, individual processing units do not receive financial aid under this scheme.

This model ensures that core infrastructure is strengthened, benefiting every unit within the cluster.

Components of the Scheme

The APC Scheme supports two main infrastructure components:

a) Basic Enabling Infrastructure

This includes facilities required to make the site operational, such as:

• Site development, industrial plots, boundary walls, and internal roads
• Drainage and water supply systems
• Power supply with backup
• Effluent treatment plants
• Parking bays, weigh bridges, firefighting systems, and common offices
• Labour restrooms, guard rooms, and solar equipment installations

Financial Assistance Rule: Up to 40% of the eligible project cost for basic enabling infrastructure is covered under the subsidy. Costs incurred outside the boundary wall are not eligible.

b) Core Infrastructure

These are capital-intensive, common facilities designed to support all units in the cluster. Examples include:

• Food testing laboratories
• Cleaning, grading, sorting, and packaging facilities
• Cold storage, pre-cooling, ripening chambers, and IQF systems
• Steam boilers, dry warehouses, and specialized packaging solutions
• Forklifts and other shared processing facilities

Such infrastructure reduces duplication of costs, enabling smaller and larger processors alike to access world-class facilities.

Eligible Entities

A wide range of organizations can apply for support under this scheme, including:

• Central/State PSUs, joint ventures, NGOs, and cooperatives
• Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), and Farmer Producer Companies (FPCs)
• Private/public sector companies, LLPs, partnership firms, and proprietorships

Special Category: Proposals from SC/ST promoters with at least 51% ownership are treated under the reserved SC/ST category.

Eligibility Criteria

• Net Worth Requirement: Applicants must have a combined net worth 1.5 times the grant sought.
• For difficult areas, SC/ST promoters, FPOs, and SHGs, the requirement is reduced to equal to the grant sought.

This ensures only financially sound entities or farmer-driven organizations can implement clusters successfully.

Pattern of Assistance (Subsidy Support)

The APC Scheme provides infrastructure subsidy for agro processing cluster projects as follows:

• General Areas: 35% of eligible project cost, up to a maximum of ₹10 crore.
• Difficult Areas/SC/ST/FPOs/SHGs: 50% of eligible project cost, up to a maximum of ₹10 crore.

Important Notes:

• No upward revision of approved subsidy will be entertained.
• If project components are dropped, subsidy will be proportionately reduced.
• Expenditure incurred after Expression of Interest but before approval may be considered, provided the project gets final approval.
• Only verified expenses (via invoices and bank statements) from equity or term loan accounts are eligible.

Why This Scheme is a Game-Changer

The Agro Processing Cluster Scheme goes beyond funding individual businesses, it creates shared infrastructure that can support multiple enterprises at once.

Key benefits include:

• Reducing capital burden for entrepreneurs.
• Providing farmers with direct access to modern preservation and processing facilities.
• Creating jobs in rural areas by setting up industries near production centers.
• Ensuring better price realization for farmers through efficient supply chains.

By combining grants, shared infrastructure, and private investments, the scheme creates a sustainable ecosystem for agro-processing growth.

Apply now and Maximize Your Benefits!

Final Thoughts

For entrepreneurs, farmer groups, and companies in the food processing sector, the infrastructure subsidy for agro processing cluster is a unique opportunity to reduce project costs while building scalable, modern facilities.

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