Nabard funding and support for Producers Organization

Written By Sushma Singh

National Bank for Agriculture and Rural Development (NABARD) has created the “Producers Organization Development Fund” to comprehensively support Producer Organizations in different forms across the country.


Producers Organizations:

An organization will be called a producer organization if

  • It is formed by a group of producers for either farm or non-farm activities
  • It is a registered body and a legal entity
  • Producers are shareholders in the organization
  • It deals with business activities related to the primary produce/product (either of the activities or in a combination of these activities, viz. sorting, grading, processing, packaging, marketing, etc.)
  • It works for the benefit of the member producers
  • Portions of profit are shared amongst the producers and the balance goes to the share capital or reserves.

Eligible Organizations:

Any registered Producer organizations i.e., Producer Company, Producer Cooperatives, registered Farmer Federations, MACS (Mutually aided cooperative society), industrial cooperative societies, other registered federations, PACS, etc. A public or private limited company set up by producers are also eligible provided they meet the requirements listed above.


NABARD’s interventions:

NABARD will undertake the following interventions:

1. Financial Intervention– NABARD will directly lend to Producer Organizations for term loans or composite loans comprising of both working capital and term loan requirements.

2. Capacity Building – NABARD will provide funds to promote the organization and skill-building exercises, and guide business planning and support technological extension. Through classroom training, exposure visits, agricultural university tie-ups, expert meetings, etc., NABARD will support capacity building needs in a structured way. Support for the capacity building could be in the form of grants, loans, or a combination of these based on the need of the situation.

3. Market Linkages – For marketing efforts of the Producer Organization, NABARD will provide credit and/ or grant support for setting up of marketing infrastructure facilities for the sale of produce.

Producer Organizations can approach NABARD directly or through promoting/ implementing an organization, which should also be a registered organization. In case the Producer Organization approaches directly to NABARD, it should be in existence for a period of a minimum of three years. In case it approaches through promoting/ implementing organization, the promoting/ implementing organization should be in existence for a minimum period of three years. In such circumstances, the condition of three years’ existence of the Producers Organization can be relaxed.


I ) Submission of Concept Note by Producer Organization/ Implementing Agency for the business plan of Producer Organization:

A concept note is a summary document that introduces the Producer Organization, and briefly describes the business plan which requires credit support. The Concept Note should contain:

1. Details of Producer Organization including a number of producers, type of producers,/ producer groups, producers share, activity/ produce, the current status of income, profits, etc.

2. Profile of the promoting/ implementing organization, and its role in the development of the Producer Organization.

3. Description of additional benefits provided to producers (income enhancement & livelihood generation) through the formation of Producer Organization.

4. Details of project management (Executive team and board of directors with qualification and experience) of Producer Organization & Promoting/ Implementing agency.

5. Brief details of the proposed business plan.

6. Brief details of financial requirements for executing the business plan.

7. Last 3 years audited financial statements (Balance Sheet & P/L statement) of Producer Organization &/ or Promoting/ Implementing agency with notes on accounts & annexure.

8. Details of earlier/ current loans and grants if any (sanction letters) availed from NABARD and other Banks/ FIs.

9. Details of security/collaterals to be offered. Please note the collateral offered has an impact on the interest rate.

Please note that the concept note is not a document on the basis of which a decision on accepting a proposal will be made. It just serves as a draft of the business plan (Annexure –I) and will help in analyzing the status of the Producers Organization. This is a stage to get a basic understanding of the project and to decide as to whether one can go ahead with the preparation of the Detailed Project Report (DPR) for appraisal. Please note that the structure for the concept note given above should be adhered to.

II) Submission of Detailed Project Report by Producer Organization/ Implementing

Agency: After the approval of Concept Note by NABARD, the Producer Organization or Promoting/ Implementing agency will be advised to submit the Detailed Project Report indicating the business plan. The format for the preparation of DPR is given at Annexure-II.

Nabard Guidelines Producers Support-pdf-14-Pages-90KB

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