Eligible Units - Any private or NGO sector, having proved capacity in agriculture diversification, agri-business or related activities;

Nature of Projects - Horticulture, floriculture, mushroom, organic crops, exotic crops, etc.;

Talukas to be covered - select talukas of central and south Gujarat (please see details below);

Pattern of financial support -Subsidy for individual Scheduled Tribe farmers - ceiling of Rs. 20,000 for each below the poverty line farmer and as per existing schemes for other farmers; and Credit on soft terms to eligible Scheduled Tribe families

Selection Criteria - Please see the text;

Last Date for sending Expression of Interest - 20 July 2007 The Chief Minister of Gujarat has announced CM’s Ten Point Program (Van Bandhu Kalyan Yojana) Link for the development of 43 ITDP Talukas of Gujarat. This programme aims at ensuring very high quality social and civil infrastructure and sustainable employment in these areas such that the income of every tribal family doubles in coming five years. Gujarat is considered one of the most prosperous states of the country, yet the fruits of development have not reached the south eastern part of the state. The tribal population of state is distributed in 43 talukas of 11 districts along the borders of adjoining states Maharastra and Madhya Pradesh. The 74.81 lakhs tribal population of Gujarat comprises of approximately 15% of the total population.

PROJECT GOALS

The Agriculture Diversification Project has the following objectives:  To introduce improved agricultural practices to the small and marginal farmers in tribal areas;  To double the income from the land related activities and sustain it for at least one generation; and  To ensure sustainable and commercially viable involvement of the private sector.

PROJECT CONCEPT

The state government is providing various kinds of subsidized inputs and services Link and this has led to significant growth in these areas. However, it is now being felt that by soliciting the involvement of private sector in terms of their technical and managerial skills through commercially designed projects, assured results can be achieved. Such a strategy will also help to achieve project goals by ensuring better and effective delivery of schemes in a more efficient manner. Conceptualizing the project and its path to commissioning will be on following pattern:

a. Project Development: The private sector implementing agency will select a taluka and accordingly decide a crop for the project. The agency should have an excellent track record of working in the sector and has produced results in the proposed field. It should be in a position to satisfy the immediate technical, human resource and financial needs of the commissioning of the project. As the project need to work closely with small and marginal tribal farmers, in case the organization does not have proven community mobilizing and organizing capacity, tie ups with major non government organizations working in these areas can be arranged by D-SAG.

b. Scope of the Project

Size/HH Coverage: An individual project can cover between 500 and 5,000 poor ST families in a taluka. Non-poor families can also be covered but while they will be eligible to receive the applicable subsidies & support from the existing schemes, they will not receive any new subsidy. The priority list for the Households will be BPL Families.

Geographical Coverage: Individual project will have to cover at least 500 acres of land. The project should be designed in the cluster form. The project will cover 5 to 10 villages per taluka and saturate all the eligible farmers of the area. Larger projects covering many villages are also encouraged. The list of Talukas for current year’s Project are as follows-

SR NO TALUKA DIASRICT

1 Nijhar, Songadh, Uchchal & Umarpada Surat

2 Umarpada, Dediapada, Sagbara Narmada

3 Chhota Udepur & Kawant Vadodara

4 Kaparada & Dharampur Valsad

5 Dangs The Dangs

6 Vasanda, Chikhli,Rhej(Gandevi),Sishodara Ganesh(Navsari)

Activities: An individual project may also cover the cost of identification and training of participating families, land development, Seed/Sapling preparation, providing inputs, providing irrigation facilities including micro irrigation, nurturing orchards, harvesting support, post harvest transportation and storage facility, linkage with market, developing infrastructure needed at every stage of value chain and project management. For applicable unit costs of individual activities, please see Link.

c. Funding of the Project: Tribal Development Department will take care of the financial requirements of all the stages. Although the total cost of individual projects will vary, the Tribal Development Department will provide a maximum grant of Rs. 20,000 (or up to 50% of the per capita cost) for each poor beneficiary and will arrange remaining financial requirement as soft loan @ 8% p.a. to the ST beneficiary. It will have to be ensured that every project is bankable with significant credit element and progressively reduced reliance on subsidy. In addition to this, the infrastructure related requirements like improving irrigation facilities, transportation facility, grading, sorting and collection of produce or any form of first stage value addition facility, road network, power connection, IT connectivity, etc. which form part of the approved project, will either be covered as grant from the Tribal Development Department or provided directly by the State Government. This cost of infrastructural support will not be included in the grant amount to the family. Ownership of the assets which are created from grant/ credit will belong to the participating families or the local community. The Project funds, along with credit component will be transferred to the implementing agency according to the requirements and subject to compliance to the periodic performance norms.

d. Role of the Implementing Agency: The implementing agency will be given responsibility of implementation of the Project and the Tribal Development Department and its agencies will be responsible for providing funds. Monitoring of the Project performance will be done by an external agency which will be appointed for the purpose.

Broadly, the role of private/ non-government organization, as implementers of these projects would be-

Stage Role Project Development stage Submission of brief LOI;

Development of main project document; and Engagement of personnel for implementation of project.

Project Implementation stage Selection of participating farmers; Training of farmers, providing inputs and extension services; Development of land and irrigation facilities; Providing extension services to participating farmers; Bringing outside experts as per the requirement of the project; Disbursement of subsidy & loan to farmers either directly or in form of inputs; Entering into agreement with farmers for sale of produce to the Project implementing group; and Arranging processing of the produce and its marketing.

Other roles Obtaining project funds from the D-SAG; Over all management, monitoring and supervision of the Project.

For implementation of project, the implementing agency will enter into an agreement with the Department. The long term stake of the implementing agency will be built in the project by way of investments in post production activities, sharing part of the project risk, and extending outcome guarantees. If the lending agencies insist, it should be also in a position to guarantee repayment of credit borrowed by the participating families. These aspects will also form part of the agreement.

e. Monitoring and Supervision of Projects: After approval of the Project, a comprehensive baseline survey will be conducted in the project taluka to assess the condition of participating families before launch of the Project. On the basis of this a customized project according to the requirements of the families will be developed. Thereafter, individual participating families will be regularly monitored along with the implementation of various components of the Project. Periodic performance norms and outcome indicators will be finalized before approval of the Project and they will also be monitored. During the Project period, the implementing agency will regularly provide required data to the Department, which will frequently carry out concurrent monitoring and evaluation exercises through external agencies.

f. Advantages to the private sector: With increasing emphasis on sourcing of agricultural produce which conform to the expectations of international market, private sector units, which are interested in agri-business, are finding it difficult to procure high quality and consistent agro-products according to their time table. Horticulture producing farmers are presently not able to commit consistent products in marketable lots at the agreed time and developing new regions as per the required specifications and quantity is very expensive task.

This project offers a unique opportunity to financially support all the activities till production and collection stages. The private sector will design these projects as per their requirements & specifications and implement it in a virgin horticultural zone, at Government’s cost. Projects can be designed in such a way that the implementers receive viable quantities of produce according to their time table. State Government is not only committing sufficient funds for these projects but will also provide required infrastructure so that the private sector implementer operates in an area which has infrastructure of international standards. Once the initial phase succeeds, further support from the State Government can also be built in the MOU for upscaling the intervention in the near future.

DESIGN OF THE PROJECT

There will be two main themes for the project-

1) Horticulture Crops with track record of suitability for the areas. This crop is being grown successfully in the area, is being marketed at high margin and has low risk. It may include any fruit crop, vegetable crop, flowers, mushroom, organic or herbal crops; short term or long term.

2) Exotic Crops that have potential for growth in the area according to geographic conditions and is recently introduced in the area or was traditionally growing in wild and due to changes in market conditions has high demand and can be adopted for cultivation or indigenous or imported/ foreign species that can be grown in controlled environment. They can be any of exotic fruits & vegetables, medicinal plants or flower species. Ten percent of the project fund will be spent for the projects of exotic crops.

SELECTION PROCESS FOR PROJECT PARTNERS

Interested agency (private sector or NGO) can form a consortium to implement various project activities in an integrates manner. Although there can be more than one agency to handle various components of the project, the overall responsibility to coordinate with the activities will remain with the lead implementing partner who will enter in contract with D-SAG.

I. Screening on the Basis of Expression of Interest. Expression of Interest briefly detailing the project proposal (including likely investment and returns per acre), probable area of operation (both, the names of talukas of operation and likely acrage to be covered), details and expertise of individual partners (also highlighting the annual turnover and product range), expected cost of the project, and likely composition of the proposed implementing team can be sent to Shri M V Joshi, IAS, Chief Executive Officer, Development Support Agency of Gujarat, Block No. 8, 6th Floor, Sachivalaya, Gandhinagar latest by 20th July 2007.

At primary level, few parties with potential will be selected for the second stage of selection on the basis of the details sent in the EOI. The criteria for primary screening will be based on

a. Expected internal rate of return on the investment by Government and beneficiary farmers;

b. Type of Crop selected for the proposed area;

c. Technical expertise;

d. Experience of the consortium members; and

e. Turnover of the consortium members. II. Discussion before Development of final project proposal: The short-listed groups will be requested to develop comprehensive proposals. During this stage, intensive dialogues will be held to firm up the acrage, number of farmers, investment size, infrastructure requirements, qualifications & strength of implementing team, risk management, firming up project size, cost & internal rate of return, guarantees expected from the implementers and content of MOU. The data and information available with the Government agencies will be made available for this purpose and field visits to the proposed area can also be organized by D-SAG executives.

While developing final project proposals, the interested groups will also have to abide by the Gender Framework Link , Monitoring Framework Link and fund release policy of D-SAG Link .

The main project will be developed/ fine tuned on the basis of the discussions. The Board of D-SAG will take a view on these projects before approving them.

Conclusion

The broad features of this initiative are as follows-

• Minimum 500 Acres / organization for Horticulture and 100 acres for exotic crops.

• Government will provide complete funding in the form of grant/loan.



• Should be designed in the cluster form i.e. selection of 5-7 villages per taluka, saturate the area.

• Efforts should be made to cover all the BPL families having land/ vada land.

• Facility for irrigation will be provided, if feasible.

• Support for drip irrigation will also be provided.

• Any vegetable or fruit crop can be identified according to the climatic & land conditions of the area.

• Seeds/ Plants/ Saplings/ Tissue culture should be from agencies certified by State Government Agencies.

• Supports given for the project

           o Land Preparation

           o Plantation

           o Tools & Equipment

           o Intercropping facilities

           o Low cost fencing

           o Pest control measures

           o Support for Irrigation and water use efficiency devices

           o Extension services

The aim of project is to bring out changes in the agriculture practices in the areas so that farmers can get better returns from the land. To bring about the change, infrastructure will be developed to facilitate every stage of production right from backward linkages to forward linkages. Agencies are free to choose activities that can ensure doubling of income in five years.