Scheme for Creation of Backward and Forward Linkages: Boosting India's Agro-Processing Sector
🧭 Objective of the Scheme
The primary aim is to ensure farmers get better returns for their produce and consumers receive quality, processed food products. The scheme facilitates:
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Efficient procurement of raw materials (backward linkages)
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Streamlined processing, packaging, and marketing of food products (forward linkages)
🛠️ Key Components of the Scheme
1. Backward Linkages
Focuses on connecting farmers/producers with processing units by providing:
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Aggregation platforms (collection centers)
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Sorting and grading facilities
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Pre-cooling and refrigerated transportation
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Primary processing facilities near farms
2. Forward Linkages
Facilitates the movement of processed food products from processing units to markets by supporting:
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Cold storage facilities
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Refrigerated vans/trucks
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Packaging units
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Retail outlets and distribution centers
💰 Financial Assistance
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Grants-in-aid of up to 35% of eligible project cost for general areas
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Up to 50% for difficult areas (North Eastern states, Himalayan states, SC/ST entrepreneurs, etc.)
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Maximum grant: ₹5 crore per project
Eligible entities:
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Food processing units
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Farmer Producer Organizations (FPOs)
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Cooperatives
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SHGs
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Private companies
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State government agencies
📝 Eligibility Criteria
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The project must be related to perishable agricultural/horticultural produce.
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The processing unit should be already operational or commissioned within six months of the grant.
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The project must be viable with proper backward or forward integration in the food value chain.
🏗️ Types of Projects Supported
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Setting up of pack houses, pre-cooling units, and refrigerated storage
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Construction of cold chains
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Establishment of collection centers
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Installation of grading, sorting, and packaging equipment
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Transportation infrastructure from farm to factory or factory to market
🌾 Benefits of the Scheme
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Reduces post-harvest losses
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Enhances income of farmers
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Promotes organized food processing sector
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Strengthens value chains from farm to fork
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Encourages private investment in rural infrastructure
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Improves export competitiveness of processed food products
📈 Impact So Far
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Hundreds of cold chain and processing infrastructure projects have been approved across India.
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Strong linkage between farmers, processors, and markets has been established.
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It supports India’s goal of becoming a global hub for food processing and reducing agricultural waste.
🚀 Way Forward
To further enhance the scheme’s reach:
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Awareness among farmers and FPOs should be increased.
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Greater convergence with state government schemes and agricultural programs is needed.
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Digitization and supply chain monitoring tools should be integrated for transparency and efficiency.
✅ Conclusion
The Scheme for Creation of Backward and Forward Linkages is a vital step toward transforming India’s agricultural economy. By bridging the gap between farmers and markets, this scheme empowers rural communities, minimizes wastage, and strengthens the national food value chain. With continuous support and monitoring, it holds immense potential for ensuring food security, farmer prosperity, and agro-industrial growth.
Let me know if you’d like this content in Tamil, want to combine it with other schemes under PMKSY, or need a short infographic version for quick online sharing!
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