Scheme for Cluster Development Programme- Part A Multi-commodity High Value Clusters

Written by CA Anand Daga
on June 2, 2025
9:38 am

NHB Subsidy For Cluster Development Programme CDP

CDP Focus & Intervention Areas The Cluster Development Programme (CDP) targets all value chain stakeholders—farmers, traders, aggregators, agribusinesses, logistics providers, retailers, processors, exporters, and other service operators.

CDP supports integrated, cluster-based interventions through specialised Implementing Agencies (IAs) under three key verticals:

Pre-production & Production:
- Focus on capacity-building and farm-level support across the crop life cycle (e.g., planting material, crop care, micro-irrigation, mechanisation).
Post-harvest Management & Value Addition:
- Support for post-harvest handling, storage, processing, and packaging at the cluster level.
Logistics, Marketing & Branding:
- Interventions to ensure market linkage, efficient logistics, cluster branding, and outreach in domestic and export markets.

Eligible Components

Vertical	Component Type	Details
Pre-production and Production	Farmer’s Component (To Farmer/FPO)	– Cost of quality planting material – Farm machinery at farmer/collective level – Cost towards micro irrigation – Inputs for INM (Integrated Nutrient Management) and IPM (Integrated Pest Management) practices – Inputs for adoption of GAPs (Good Agricultural Practices) – Innovative practices/technologies/equipment (e.g., fruit netting, bagging, cable/zip-line fruit evacuation system, portable on-farm weather station)
	IA Component	– Formation and promotion of FPOs (Farmer Producer Organizations) – Capacity-building of Farmers/FPOs – Awareness campaigns/Exposure visits – Hi-tech nurseries and tissue culture labs – Quality control labs – Adoption and dissemination of GAPs – Promotion of crop-care practices including MRL, INM, and IPM practices – Micro-irrigation, farm mechanization, advanced techniques like precision farming, high-density plantation, usage of drones – Adoption of new technologies and advanced farm machinery – Real-time market intelligence, IT/Digital innovations, IoT infrastructure, traceability blockchains, remote sensing, weather station, farm management software – Development and dissemination of IEC material – Technical assistance from national/international organizations, universities, and institutes
Post-harvest Management and Value Addition	IA Component	– Cost towards aggregation infrastructure (e.g., collection centres) – Establishment/modernisation of cluster-level infrastructure (e.g., pack-houses, ripening chambers, cold rooms, reefer vans, processing units) – Cold storage infrastructure including controlled atmosphere storages – Infrastructure and cost for innovative packaging (e.g., MAP, nitrogen flushing) – Preliminary/Pre-operative expenses including Interest During Construction (IDC) – Ancillary facilities for post-harvest handling – Trainings on post-harvest handling practices
Logistics, Marketing, and Branding	IA Component	– Development of logistics infrastructure from farm gate to market/export points – Storage/material handling infrastructure for multi-modal transport – Market linkages (domestic and export) – Use of e-commerce platforms and digital marketing – Digital Public Infrastructure customization for traceability, blockchain, IoT – Marketing campaigns (print/electronic), trade fairs, buyer-seller meets, product sampling – Market intelligence collation and dissemination – Approach/Internal road support (up to INR 1.5 Cr. per project)

Pattern of Assistance Overall Structure:

Financial support is provided to both Implementing Agencies (IAs) and farmers, ensuring transparency and efficiency.

IA Financial Assistance:
- Max 25% of Farm Gate Value (FGV) of the focus crop.
- Disbursed in three instalments via Trust and Retention Account (TRA).
- Credit-linked for IA components.
- Additional 5% incentive for timely, complete implementation.
- Up to 10% extra incentive for innovative components, capped at 50% of actual cost.
Farmer Financial Assistance:
- Provided over and above IA assistance.
- Not credit-linked.
- Disbursed via Direct Benefit Transfer (DBT) through the CDP Suraksha Portal.
- Must align with cost norms, with no duplication from other schemes.
- Tapered subsidy on inputs like seeds:
  - 1st season: 100%
  - 2nd season: 50%
  - 3rd season onwards: 0%
Project Cost Structure:
- Based on DPR/Business Case by IA.
- Divided into IA Component and Farmer’s Component.
- For subsidy calculation: lower of (A) Bank-approved project cost (excl. land) or (B) Norm-based cost.

Cost Norms

Assistance Cap:
- IA assistance capped at 25% of Farm Gate Value, but specific component-wise support follows Annexure 9 cost norms.
Eligibility:
- Only post-approval expenses are eligible.
- Pre-approval expenditures are not eligible for assistance.
Reference Norms:
- If CDP norms are unavailable, norms from MIDH, MoFPI, APEDA, NHB, or other GoI schemes will apply.
Innovative/Digital Components:
- Where norms are not available (e.g., for digital or branding interventions), the Guideline and Cost Norms Committee will define them.
Updates:
- In case of updates to existing norms, the latest version will be followed.
Equipment Requirement:
- Only new equipment/machinery is eligible.
- Refurbished/reconditioned items are not eligible.