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Guidelines for the scheme for creation of background and forward linkages


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During the 9Th plan the Ministry of Food Processing Industries operated, inter-alia, the scheme for creation of backward linkages with objective of increasing capacity utilization of food processing units including fruit based wine industry by ensuring regular supply of raw materials through contract farming. The scheme was continued to be implemented during 10th plan with the addition of component Forward Integration. In order to plug the gaps in the backward and forward integration and to optimize the capacity utilization of food processing units in the Ministry proposes to launch he revamped scheme for creation of backward and forward linkages for processed food industry by assisting in setting up of primary processing centers/collection centers at farm gate and modern retail outlets at the front end along with the connectivity through insulated /refrigerated transport. The scheme is applicable to perishable horticulture and Non-Horticulture produce such as, fruits, vegetables, dairy products, meat, poultry, fish, etc.


The objective of the scheme is to provide effective and seamless backward and forward integration for processed food industry by plugging the gaps in supply chains in terms of availability of raw material and linkages with the market. The Scheme will enable linking of farmers to processors and the market thereby ensuring remunerative prices their produce.

Eligible sectors

Following food processing sectors are eligible to avail the assistance under the scheme:

  • Horticulture
  • Milk & Milk Products
  • Meat, Poultry, Fishery, Marine, and Piggery
  • Ready to Eat, Ready to Cook Food Products
  • Honey, Coconut, Spices, Mushroom
  • Retails Shops or Perishable Food Products

Eligible Components

Following are the eligible components and facilities linked to food processing for which assistance may be availed:

Backward Linkage

  • Integrated Pack-House (s) (with mechanized sorting and grading line / packing line / waxing line/ staging cold room cold storage, etc.)
  • Milk Chilling Centre(s)/Bulk Milk Coolers(s)
  • Pre Cooling Unit(s)/ Chillers
  • Reefer boats
  • Machinery and equipment or minimal processing and/or value additions such as cutting, dicing, slicing, pickling , drying, pulping, canning, waxing , etc.
  • Machinery and Equipment for packing and packaging

Forward Linkage

  • Retail chain of outlets to be set up by the processors, and/or organizations with farm level infrastructure under component at above or perishable food products. These would have facilities such as frozen storage/ deep freezers / refrigerated display cabinets/cold room/ chillers/ packing / packaging, etc.
  • Distribution center associated with the retail chain of outlets s above with facilities like old room/ cold storage/ ripening chamber.
Note: The retail outlets can also be set in rural areas or near the farm gate well.


  • Refrigerated/ Insulated Transport/ Reefer Vans in conjunction with components at (a) and/or (b) above.

    Ineligible items

    The following items will be considered ineligible for grant purposes:

    • Compound Wall
    • Approach Road
    • Cost of land and site development
    • Administrative Office Building
    • Canteen
    • Security/ Guard Room or enclosure
    • Consultancy fees, Insurance etc.
    • Margin Money, Working Capital and Contingencies
    • Fuel, Consumables, Spares, and Stores
    • Computers and allied office furniture
    • Transport vehicles other than the reefer trucks/vans/refrigerated carrier/insulated vans/ milk tankers
    • Pre-Operative expenses
    • Second hand/old/refurbished/ reconditioned machines
    • All types of service charges etc.
    • Expenditure on painting of machinery
    • Closed Circuit TV Camera and security system related equipment.
    • Stationery Items
    • Plant and Machinery not directly related to the proposed subject.

    Eligible organizations/entities

    Following would be eligible or financial assistance under the scheme:

    • Promoters of Food Processing units.
    • Entrepreneurs desirous of entering into food processing supply chain.
    • Groups of producers such as Co-Operatives, Farmers Producer Organizations (FPOs), Farmer Producer Companies (FCPs) , Self Help Groups (SHGs) etc. linked to food processing units desirous of setting up minimal processing/ value addition centers.
    • Retailers having linkages with farm level and/or with processors.

    The Applicants in the above categories maybe organizations such as Central and State PSUs / Joint Ventures / Farmer Producer Organizations (FPOs)  / NGO /Cooperatives  / SHGs/ Public & Private Companies / Limited Liability Partnerships, Corporate Entity / Proprietorship Firms /Partnership Firms etc.

    Documents required

    Following documents are required to be uploaded online:

    • Detailed Project Report (DPR) in the prescribed template as the (Appendix II)
    • CA/ Statutory Auditor Certificate as per (Appendix III)
    • CE (Civil) certificate (Appendix IV) and CE (Mech) certificate (Appendix V).
    • Proof of Infusion of equity of at least 20% and 10% of the total project costs respectively or projects in general areas and for projects in North East States, Himalayan States and ITDP Areas & Islands duly certified by the lending banks/FI.
    • Final term loan sanction from the Bank/Financial Institution or availing term loan or an amount not less than 20% of the project.
    • A detailed appraisal note from the Bank/Financial Institution or availing term loan for an amount not less than 20% of the project cost.
    • Certificate of Incorporation/registration of the applicant firm, Memorandum and the Articles of Association in case of Company/ Bye Laws of the Society, Co-operative, Self Help Group/ Registered Partnership Deed, Etc.
    • Bio Data /Background/Experience of the project promoter(s).
    • Annual reports and Audited Financial Statement of Accounts of the Applicant firm /company/ cooperative/ Partnership / Co-Operatives, Farmer Producer Organizations (FP0s), Farmer Producer Companies (FCPs), Self Help Groups (SHGs) , Etc. for last two years.
    • Self-Attested English/Hindi version of land documents for the project in support of land title in the name of applicant or land lease, duly registered with the competent authority for not less than period of 15 years.
    • Change in land use (CLU) permission or the project or the said land from the competent Authority.
    • Certificate from lending Bank/FI that the facility has not commenced commercial operations as on he date of issue of EOI or he date of bank certificate, whichever is later.
    • An Undertaking o be furnished by the Applicant as per Appendix –VI.
    • MoU Agreement for Backward Linkages and Forward Linkages duly authenticated by concerned District Authority pertaining to respective sectors.
    • Annual Reports and Audited Statement of Accounts of last three years, in case modernization/ upgradation of technology and plant and machinery is proposed. This will not be applicable for a new entrepreneur.
    • Proof of submission of requisite fee.
    • Mandate form as per Annexure I in respect of applicant firm.
    • Self-Attested copy of a PAN card applicant firm.
    • SC/ST Certificate, as the case may be, from concerned Government Authority, if applicable.
    • The amount of fee to be submitted along with the proposal

    The Applicants are required to submit through RTGS/NEFT, Rs.50000 (Rupees Fifty thousand only) as refundable security deposit and Rs.5000 (Rupees Five Thousand Only) as non-refundable cost of EOI document in favor of “Pay and Accounts Officer Ministry of Food Processing Industries New Delhi.


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    Vipan Singh
    Vipan is known for his passion for diversity and his work with corpseed. In his spare time, he is involved with numerous charitable activities and considers his greatest achievement to be the fact that he helps Startups and Entrepreneurs to scale up