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India’s agriculture sector holds immense potential—not just in farming, but also in the value-added processing of agri products. Unfortunately, most produce is sold in raw form, offering low returns to farmers and rural entrepreneurs. This is where Value Addition and Government Subsidies like those provided by NABARD come into play.
Why Value Addition is the Future of Agriculture?
Value addition refers to the conversion of raw agricultural produce into market-ready or processed goods. This could be as simple as drying and packaging or as advanced as oil extraction and branded food product manufacturing.
Benefits of Value Addition:
Reduces post-harvest losses
Increases farmer and rural entrepreneur income
Creates employment in villages
Helps in entering premium and export markets
Supports agribusiness and food processing industries
For example, raw turmeric sells for ₹25/kg, but processed turmeric powder can fetch up to ₹120/kg!
Primary & Secondary Processing: Building Rural Enterprises
Value addition is carried out through two major types of processing units:
Primary Processing Units
Cleaning, grading, drying, de-husking
Simple packaging and ripening chambers
Located close to farms to minimize loss
Secondary Processing Units
Making jaggery from sugarcane
Extracting oil from sesame or groundnuts
Producing masala powders from dried spices
Cashew processing, coconut oil production, etc.
These units extend shelf life, enable branding, and create ready-to-use products for the domestic and international markets.
NABARD Subsidy: Enabling Affordable Growth
Setting up agri-processing units needs capital. This is where NABARD Subsidies make a big difference. NABARD provides capital subsidy up to ₹30 lakh (33.33% of project cost) for eligible agriculture-based projects.
Subsidy Advantages:
Makes projects bankable and viable
Reduces upfront investment
Enables easier loan approval from banks
Combines with interest subsidy (3% for 7 years) under AIF
Encourages women-led and rural startups
Example: A ₹30 lakh unit for drying and packaging fruits can get ₹10 lakh in subsidy, reducing the loan burden and increasing profitability.
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