ADB Approves $100 Million Loan for Agribusiness Development in India

MANILA — The Asian Development Bank (ADB) approved on 27 September a $100 million loan to improve agribusiness network and productivity in Maharashtra, India.

Maharashtra produces 11% and 6% of India’s fruit and vegetable production, respectively, and accounts for about 8% of the country’s floriculture exports. Despite ample opportunities for the growth of horticulture, most smallholder farmers still practice subsistence farming because of fragmented land ownership, insufficient capital to scale up, and lack of direct access to emerging high-value markets.

“To maximize the benefits from the horticulture industry, the linkages between value chain operators (VCOs) and farmers need to be strengthened,” said ADB Principal Rural Development Specialist for South Asia Masahiro Nishimura. “The project will help small and marginal farmers in Maharashtra improve their post-harvest and marketing capacity, reduce food losses, and increase incomes through access to finance, capacity building, and horticulture value chain infrastructure development. The project will also support inclusive development through gender equality and social inclusion actions.”

The ADB loan will help provide financing opportunities for farmer producer organizations (FPOs) and VCOs through matching grants or financial intermediation loans to support 300 subprojects for $92 million in total, including the government counterpart contributions.

The Maharashtra Agribusiness Network (MAGNET) Project will upgrade 16 existing post-harvest facilities and construct 3 new ones to provide individual farmers and FPOs clean, accessible, and sustainable crop storage and processing facilities. It will also build the capacity of FPOs and VCOs on value chain acceleration and post-harvest handling and management, especially those owned and led by women. The project is expected to benefit 200,000 farmers.

“ADB’s approach is to help demonstrate innovative rural and agricultural transformation into resource-efficient and higher value businesses for smallholder farmers through several mutually complementing and interlinking projects in Maharashtra and replicate them within and outside India once completed,” said ADB Principal Natural Resources and Agriculture Specialist Michiko Katagami.

ADB will provide a $500,000 technical assistance (TA) grant from its Technical Assistance Special Fund and $2 million from the Japan Fund for Poverty Reduction on a grant basis to improve market linkages for FPOs. The TA will establish crop-based centers of excellence networks, promote innovative technologies in agribusiness and agriculture value chains, and support capacity building, including the asset and financial management capabilities of the MAGNET Society and the Maharashtra State Agriculture Marketing Board.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

 

Comments are closed.