Nabard funding and support for Producers Organization

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

NABARD Guidelines for Support to Producers Organizations

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 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. Public or private limited company setup by producers are also eligible provided they meet the requirements listed above.

nabard funding agriculture

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 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 capacity building could be in the form of grant, 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 sale of produce.

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


I ) Submission of Concept Note by Producer Organization/ Implementing Agency for 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 the credit support. The Concept Note should contain:

1. Details of Producer Organization including number of producers, type of producers,/ producer groups, producers share, activity/ produce, 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 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 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 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 the basic understanding of the project and to decide as to whether one can go ahead with preparation of Detailed Project Report (DPR) for appraisal. Please note that the structure for 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 preparation of DPR is given at Annexure-II.

Download the Complete Guidelines and Anenexure II

at the link below

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

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