Meghalaya Agriculture Warehouse Scheme

The Chief Minister’s ELEVATE program, a flagship initiative by the Government of Meghalaya, is designed to engage and empower the youth through entrepreneurship, positioning them as active partners in the state’s development. This program provides comprehensive support to a diverse range of entrepreneurs, including individuals, collectives, village organizations, and traditional institutions, facilitating the establishment and growth of businesses across various sectors. Its primary goal is to foster employment, engagement, and empowerment among the youth of Meghalaya by promoting entrepreneurship and ensuring easy access to credit through collaboration with various banks as financial partners of the program. To mitigate the associated credit risks, the Government offers front-end subsidies in the form of down-payments and back-end subsidies in the form of EMI co-payments. Through this program, entrepreneurs, whether individuals, collectives, village organizations, various business entities, or traditional institutions, gain seamless access to a variety of schemes via a unified online portal. The program encompasses a wide array of sectors, including agriculture, horticulture, veterinary and animal husbandry, tourism, entertainment, sports, wellness, and any economically beneficial business ventures for the people of the state.

Scheme Details

About

With over 80% of the population of Meghalaya living in rural areas, agriculture remains the main source of income and livelihood. Therefore, to improve the lives of the people, agriculture development becomes crucial. Agri-infrastructure such as warehouses plays a pivotal role in taking the production dynamics to the next level. It is only through the development of infrastructure, especially at the post-harvest stage that the produce can be optimally utilized with opportunity for value addition. Warehouses also address the vagaries of nature and provide a fair price to the farmers thereby enabling the State to realize full potential of the high-quality produces.

Warehousing is an integral part of the agri supply chain and is also linked to food security and agricultural growth. Warehouses are scientifically designed storage structures to protect and preserve the stored products. It can be a space where grading, sorting, and packaging for bulk sales takes place. However, due to high capital investments the availability of warehousing infrastructure is limited in the State. The scheme aims to bridge the gap and encourage establishment of warehouses where agricultural commodities can be stored for a long period, thereby minimising wastage, and costs.

The Meghalaya Warehouse Scheme is an initiative of the Government of Meghalaya for establishment of warehouses for better storage of agricultural commodities. The diverse Agro-climatic conditions in the State provide a rich abundance of natural wealth and biodiversity, including some unique and well-sought after produces such as fruits, vegetables, and spices. To unlock the full potential of the agriculture and horticulture sector, the Government of Meghalaya has been prioritizing transformation of the primary sector and has undertaken numerous initiatives to uplift agriculture and allied sectors in the State.

With respect to the above, the government is launching the “Meghalaya Agriculture Warehouse Scheme” to provide subsidy-based assistance to the selected entrepreneurs to establish agri-warehouses across the State. This scheme will be implemented by the Meghalaya Basin Management Authority (MBMA).

Objectives

  1. Enhance incomes: By providing a weatherproof space for the communities to store agriculture produce, the scheme will prevent distress sale during glut season.
  2. Reduce post-harvest losses:  Commonly accessible warehouses at central locations for local village communities to aggregate and store agricultural produces, will enable proper storage of produce and prevent post-harvest losses.
  3. Build agri-market systems: Provide spaces for primary sorting, grading and bulk packaging for large scale trade.
  4. Stabilise market price: Help to stabilise the agricultural commodity prices and ensure fair price realization for farmers.

Snapshot of the scheme

 

The Meghalaya Agriculture Warehouse Scheme

Financial aid for construction of Warehouses, with the option to select one amongst the 5 sizes.

Who can apply?

a)      Individuals from Meghalaya

b)      Registered entities:  Any group/entity registered in Meghalaya such as Cooperatives, Farmer Producer Companies (FPC), Farmer Producer Organisation (FPO) and so on.

Note:

Applications shall not be ordinarily considered for the following

1.       Following individuals (currently employed as full-fledged or contractual, or retired and drawing pension) and their Immediate family members which includes spouse, parents, and children up to the age of 30

a.      state and central Government employees

b.      employees of public sector undertakings, subsidiaries of public sector undertakings and divisions of public sector undertakings etc.

c.      any individual whose job is concerned with politics such MLAs, MLCs, MPs etc. or seeking to hold a similar position in government

d.      registered class-1 contractors

e.      consultants who are currently engaged with state or central government.

2.      Pressure groups  and organizations that are primarily political in nature.

Nodal department for the CM-ELEVATE

Planning, Investment Promotion & Sustainable Development Department

Implementing agency for the scheme

Meghalaya Basin Management Agency

Application procedure

Online application on the CM-ELEVATE Portal

Eligibility Criteria

As the scheme is aimed at setting up agri-warehouses across Meghalaya. The scheme is only eligible for individuals and registered institutions based in the state. These include agri-entrepreneurs, farmers, farmer collectives, Cooperative Societies, Village Organizations, Self-Help Groups, Farmer Producer Organizations, and other such community-based organizations/societies. 

The eligibility criteria are designed to ensure that the selected entrepreneurs are residents of Meghalaya, have secured appropriate land arrangements, and are willing and capable of making the expected contribution towards successful completion of the project.

  1. Residency requirement: Entrepreneurs must be residents of the state of Meghalaya. Valid identification documents demonstrating residency will be required as part of the application such as registration certificate or address proof of the organization/society. 
  2. Land availability for construction: The application must include proof of land ownership or a valid lease agreement or self-declaration for the proposed warehouse establishment. If the land is owned, documentation demonstrating ownership will need to be provided. 
  3. Employment requirement: The entrepreneurs must commit to employing locals (if any employment generation activity is being undertaken). This criterion aims to promote job creation and contribute to local employment opportunities.
Eligibility criteria for individuals
  1. Individuals who are permanent residents of Meghalaya are eligible for the scheme
  2. Must be above 18 years of age and below 58 years of age
  3. Must have ownership of the land on which the construction of warehouse is being proposed or must have a leased land for at least the next 10 years
  4. Must provide valid government ID proof with an address which includes Aadhar Card, Voter ID, Passport and Diving License.
  5. Shall not be a credit defaulter from any bank.
Eligibility criteria for the Registered community-based entities
  1. Must provide an Incorporation Certificate or a registration certificate, whichever is applicable
  2. Must be based in the village for which the program is being availed
  3. Must have an active bank account and submit the bank statement of the last 6 months
  4. Must have been in operation for at least two years
  5. Must provide valid government ID proof with an address of the President / Secretary which includes Aadhar Card, Voter ID, Passport and Diving License.
  6. Should possess land, either self-owned or on lease, and so on., duly verified by the competent authority

Application Process

Entrepreneurs are required to complete the application process and submit all the required documents through the online CM-ELEVATE Program Portal.

Submission Requirements

As proof of eligibility, the entrepreneurs are required to provide proof of their eligibility for the scheme by submitting the required documents mentioned below.

Individuals

Registered entities

  • Individuals from the state of Meghalaya
  • Valid government photo Identity with an address such as Aadhar Card, Voter ID, Passport etc
  • Land availability proof
  • Pan Card, if available
  • Bank Statement for last 1 year, if available.
  • Incorporation/ Registration Certificate
  • Valid government photo identity with an address such as Aadhar Card, Voter ID, Passport etc of the President / the Secretary
  • Land availability proof
  • GST certificate, if available
  •  Pan card, if available
  •  Bank account statement for last 1 year, if available

 

Financing Plan

Financial partners

  1. State Bank of India (SBI)
  2. HDFC Bank
  3. Northeast Small Finance Bank
  4. Shillong Cooperative Urban Bank Ltd

Summary of the financing plan:

The figure below shows the overall summary of the financing of the project.

Quantum and Nature of Assistance:

  1. Margin Money Support:
    Total down payment will be 80% of the project cost and the remaining 20% will be on credit through a bank loan.
    • 5% of the project cost is to be paid by the entrepreneur to the bank
    • 75% of the project cost will be paid by the Government of Meghalaya to the bank.
  2. Additional support:
    • Guidance in application process through implementing agencies
    • Support in project realization of the business venture under this program
    • Training and capacity building of the entrepreneurs to successfully run their business ventures under this program

Evaluation

Primary criteria for evaluation of the entrepreneurs will be:

  1. Intended use of the warehouse
  2. Type of livelihood generating activities envisaged
  3. Scale of livelihood generating activities
  4. Availability of similar infrastructure

Shortlisting of applications:

Applications will be shortlisted based on the verification of all required documents mentioned above.

Evaluation Committee:

A “State Level Evaluation Committee” will be constituted to evaluate the applications. The committee will be headed by the CEO/ED of MBMA and will have the banking partners as its members.

The list of members of the committee will be notified at a later date.

Personal interviews:

Personal interviews of the screened entrepreneurs may be conducted by the committee to ascertain the suitability of the entrepreneur for the scheme.

Physical inspection of proposed land

Shortlisted entrepreneurs will undergo an inspection of the land and relevant documents submitted with the proposal.

  • This inspection is to verify the ownership or validity of the lease agreement for the proposed establishment.
  • It will also assess the suitability and compliance of the land with the project requirements.

Declaration of the final list of beneficiaries

    • The proposals scoring maximum marks and fulfilling all conditions related to land and site for establishment of the warehouse will be accepted for the financial support outlined above.
    • Final list of the selected beneficiaries will be available online

Economic Benefit

Illustration to understand the payment terms

Let’s consider an example of the three types of warehouses to understand the various financial components of setting-up a warehouse.

Components

100 MT

200 MT

500 MT

Total Project Cost

₹ 29,59,995

₹52,85,795

₹78,81,875

Down payment by Entrepreneur (5%)

₹ 1,48,000

₹2,64,290

₹3,94,094

Down payment by GoM (75%)

₹22,19,996

₹39,64,346

₹59,11,406

Loan Amount (20%)

₹5,91,999

₹ 10,57,159

₹ 1,48,000

Annual Interest Rate

9%

9%

9%

Term of Loan

7 years

7 years

7 years

EMI

₹11,672

₹20,843

₹31,081

 

* Annual interest rate may differ at the time of sanction of the loan and prevailing rate of the bank will be applicable.

Financial Aid Disbursement

  1. Down-payment support from the GoM will be transferred to the bank within 15 days of receival of request from the bank.
  2. If any entrepreneur fails to pay the documents and down payment within the specified time after the announcement of the results, the warehouse will be allotted to the next entrepreneur in the waiting list.
Economic Analysis

Indicators

Model

Size of the WH

Rent/ sq. ft/ month

No. of months rented

Projected revenue

Annual EMI

Annual Maintenance expenses

Annual Income

100 MT

905 sq. ft

₹ 85

3

₹2,30,775

₹1,40,064

₹ 12,000

₹1,786

200 MT

1808 sq. ft

₹ 85

2

₹3,07,360

₹2,50,116

₹ 12,000

₹45,244

500 MT

5425 sq. ft

₹ 85

2

₹9,22,250

₹3,72,966

₹ 12,000

₹5,37,284

 

Estimates and designs for the warehouses

Abstract Of Estimate For Construction Of Warehouse For 100mt / 200 Mt/ 500 Mt Storage

 100 MT200 MT500 MT
Construction Of Warehouse₹ 22,30,000₹ 42,35,00063,89,000
Construction Of Toilet Block₹ 22,30,000₹ 42,35,000₹ 63,89,000
Sub Total₹ 1,68,000₹ 1,68,000₹ 2,52,000
Add 7.5 % For Water Supply And Sanitation₹ 23,98,000₹ 44,03,000₹ 66,41,000
Add 8.5 % For Electrification₹ 1,79,850₹ 3,30,225₹ 4,98,075
Septic Tank And Soak Pit With Brick Walling (50 Users)₹ 2,03,830₹ 3,74,255₹ 5,64,485
Water Storage Tank (4000 Liters) @ 10.00/ Liter₹ 1,38,315₹ 1,38,315₹ 1,38,315
Total₹ 40,000₹ 40,000₹ 40,000
Less For Base Cost Factor @ 28%₹ 29,59,995₹ 52,85,795₹ 78,81,875

Note: Based On The (I) MPWD-S/R- 2021-2022 Buildings)


Support to be provided by MBMA for the project implementation

The MBMA will ensure that the scheme is implemented effectively by providing the following support.

  • 1) Provide technical support to the applicants in maintenance of the warehouse.
  • 2) Provide training on good post-harvest management practices for storage of produce.
  • 3) Facilitate convergence with other departments and schemes from time to time for the benefit of the warehouse.

Terms and Conditions

1) Contract: Entrepreneur must sign after agreeing to the terms and conditions defined in the triparted contract to be signed at the time of sanctioning of the loan.

2) Intended use: The warehouse should be used as a communal space for the benefit of the local community and not as a private property of any individual.

3) Reporting: The entrepreneur must submit details of the activities undertaken at the warehouse on a periodic basis as conveyed by MBMA.

4) Usage of Government Funds: To ensure compliance with the intended use of the funds and to encourage proper allocation, the beneficiary must ensure that the funds provided by the Government cannot be utilized for operational purposes or working capital. Funds are specifically allocated for the establishment of the Common Facility Centre. It is important to note that the funds cannot be used for the purchase of land.

5) Usage of Facilities: In the future if the Government of Meghalaya needs space to promote or conduct events of public significance, the beneficiaries should prioritize allowing the usage of the facilities for these events as a priority with applicable rates.

6) Breach of Clauses: If any breach is found in the utilization of funds, such as the misuse of Government funds for operational purposes or other diversions of stated funds, a 16% annual interest charge will be levied on the entrepreneur and may include legal action.

7) Transfer of Ownership: The selected beneficiaries cannot transfer the warehouse ownership to any person or organization within the contract term of fifteen years without being issued a ‘No Objection Certificate (NOC)’ or release letter jointly signed by the CEO/ED MBMA and the financing bank.

8) Termination: Government of Meghalaya has the right to terminate the contract with the entrepreneur following which 16% annual interest charge will be levied and may also include legal action on them, if found not to abide by the terms and conditions mentioned below.

The entrepreneur violates or fail to match the conditions of the Triparted contract.

The entrepreneurs are found to be engaged in fraudulent /illegal/criminal activities and misuse of the warehouse other than those permissible by law.

 

Planning, Investment Promotion & Sustainable Development Department, Government of Meghalaya, 

Departments

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