The scheme aims at development of modern infrastructure and common facilities to encourage group of entrepreneurs to set up food processing units based on cluster approach by linking groups of producers/ farmers to the processors and markets through well-equipped supply chain with modern infrastructure. Each Agro Processing Clusters under the scheme have two basic components i.e., Basic Enabling Infrastructure (Roads, Water & Power Supply, drainage, etc.), Core Infrastructure / Common facilities (Warehouses, Cold Storages, IQF, Sorting & Grading etc.) and at least 5 Food Processing Units with a minimum investment of Rs. 25 crores. The units are set up simultaneous along with creation of common infrastructure. At least 10 acres of land is required to be arranged either by purchase or on lease for at least 50 years for setting up of Agro Processing Cluster.

Agro Processing Clusters set up by Project Execution Agency (PEA) / Organization such as Government / PSUs, Joint Ventures, NGOs / FPOs, Private Sector, Individuals etc., are eligible for financial assistance subject to terms and conditions as per the scheme guidelines.

The Project Execution Agency (PEA) which is responsible for overall implementation of the projects undertakes various activities including formulation of the Detailed Project Report (DPR), Procurement of Land, Arranging Finance, Creating Infrastructure and Ensuring external infrastructure linkages for the project etc. PEA may sell/ lease plots in Agro-processing cluster to other food processing units but the common facilities in the cluster cannot be sold or leased out.
Project Proposals which are seeking assistance under the APC Scheme are invited through Expression of Interest (EOI) from time to time.

Project Components:

Basic Infrastructure:

Includes Site Development, Development of Industrial Plots, Boundary wall, Roads, Drainages, Water Supply, Electricity Supply including Power backup, Effluent Treatment Plant, Parking Bay, Weigh Bridges, Common Office Space etc.

Core Infrastructure:

Includes Food Testing Laboratory, cleaning, grading, sorting and packing facilities, steam generation boilers, dry warehouse, cold storage, pre- cooling chambers, ripening chambers, IQF, specialized packaging, other common processing facilities, etc.,

Pattern of Assistance:

1. The Scheme grants up to 35% of eligible project cost in general areas and up to 50% of eligible project cost in the Northeast States including Sikkim and difficult areas namely Himalayan States, State notified ITDP areas, Islands and for SC/ST entrepreneurs subject to max. of Rs. 10.00 crore per project.
2. This subsidy is credit linked but not back-ended subsidy.

Release of Grant:

1. 1st Instalment of 35% of the total approved grant is released to the PEA after an expenditure of 35% of the Bank Term Loan and 35% of Promoter’s Contribution.
2. 2nd Instalment of 40% of the total approved grant is released after expenditure of 75% of the Bank Term Loan and 75% of Promoter’s Contribution,
3. 3rd Instalment of 15% of the approved grant after 90% completion of the project and after submission of the required documents.
4. 4th / Final Instalment of 10% of the approved grant is on completion of the project and submission of the required documents.