Entrepreneurship Development Programme (EDP) in Food Processing

Transcription

1 Report on Entrepreneurship Development Programme (EDP) in Food Processing Venue: Rajiv Gandhi University, Arunachal Pradesh (15 th -20 th November 2013) Sponsored by National Institute of Food Technology Entrepreneurship and Management (NIFTEM) (An Autonomous Institution under Ministry of Food Processing Industries, Govt. of India) Sonepat, Haryana, India Organized by Institute for Integrated Rural Development (IIRD) Center for Entrepreneurship and Skill Development (CESD) (A unit of IIRD, ISO 9001:2008 Certified Institute) IIRD Complex, By Pass Road, Shanan, Sanjauli, Shimla-6, H.P., India Ph , Telefax: / Website: December, 2013

2 CONTENT PARTICULARS PAGE NO ACKNOWLEDGEMENT... 5 PREFACE... 7 ABOUT IIRD... 9 INTRODUCTION BACKGROUND OBJECTIVES DAY SECTION Inaugural Session Mission of NIFTEM Discussion on Objectives of the EDP Programme Feedback from Participants Entrepreneurship Definition & Entrepreneurial Process SECTION Entrepreneurship Procedure Proper Planning for Enterprise Management Launching of the Enterprise Management of Enterprise Characteristics of an Entrepreneur Soft Skills for Entrepreneurs SECTION Case studies of Successful Food Processing Enterprise including Strategies for Successful Entrepreneurs Case 1: CREMICA group Institute for Integrated Rural Development- IIRD, Shimla 2

3 Case 2: Krishna Pickles Case 3: Ingty Dal Mills, Assam DAY SECTION Whom to Approach for What? SECTION Planning for Small Scale Food Processing Industry Some prerequisites and requirements to start the projects SECTION Role of different Financial Institutes in setting of the Food Enterprise Small Industries Development Bank of India (SIDBI) DAY SECTION Role of District Industries Centre (DIC) Role of National Bank for Agriculture and Rural Development (NABARD) SECTION Role of Krishi Vigyan Kendra (KVK) National Small Industries Corporation (NSIC) Ministry of Small and Medium Enterprise (MSME) SECTION Ministry of Food Processing Industries (MoFPI) SECTION National Mission on Food Processing (NMFP)- A centrally sponsored scheme of MoFPI DAY SECTION Institute for Integrated Rural Development- IIRD, Shimla 3

4 Role of National Horticulture Board (NHB) North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC) SECTION Business Opportunity Guidance SECTION Brainstorming on Product Identification of Food Processing DAY SECTION Individual Counseling on Product Identification in Food Processing SECTION Preliminary Project Writing Profile PPR Formulation & Discussion VALEDICTORY SESSION Industrial visit of Local Food Processing Industries CONCLUSION ANNEXURES Annexure1. Press cuttings related to the Programme Annexure 2: Participants Database Annexure 3: Feedback Annexure 4: Bill Institute for Integrated Rural Development- IIRD, Shimla 4

5 ACKNOWLEDGEMENT Food is one of the basic needs of man, and the advances in production, processing and marketing of food in its varied forms is one of the main foundation on which the present human civilization rests. In this context our Institute- Institute for Integrated Rural Development (IIRD) Shimla is proud to play a small yet significant role in igniting and nurturing the Entrepreneurial ambitions of a group of young and enthusiastic participants of the Entrepreneurship Development Program (EDP) in Food processing at Itanagar, Arunachal Pradesh. First and foremost we are indeed thankful to the National Institute of Food Technology Entrepreneurship and Management (NIFTEM) for giving us a valuable opportunity to conduct this programme. The confidence and faith showered upon us by the authorities of NIFTEM kept our spirits high and helped us a lot in the successful implementation of the training program. We strongly believe that such training programs will pave a channel through which the creative energies of our country s youth can be fruitfully directed. The pivotal role played by the Department of Mass Communication, Rajiv Gandhi University (RGU)-Itanagar has been invaluable in the implementation of the EDP programme. We would like to tender a special thanks to all the functionaries of the Rajiv Gandhi University for having gracefully accepted our request to conduct the programme at their University premises at such a short notice. We would like to take this opportunity to thank Mr. Moji Riba, Head Dept. of Mass Communications, RGU for his guidance and support all throughout the programme. The local coordinator of the programme Mr. Sunil Koijam, Assistant Professor, Dept. of Mass communications, needs special mention for his untiring efforts in making the program a grand success. Without his organizational skill and acumen this program would not have been possible. I would like to thank the entire staff and the students of the Department for having supported the program in every possible manner. The Inaugural Session of the EDP programme was conducted in the august presence of the Honorable Director, Trade and commerce, Arunachal Pradesh, Mr. Tokong Pertin as the Chief Guest of the function. We remain indebted to him for his gracious presence and for inspiring the participants and the resource persons through his wonderful inaugural speech. Institute for Integrated Rural Development- IIRD, Shimla 5

6 The priceless contributions of the resource persons from various departments of RGU- Itanagar, namely Ms. Devi Baruah, Assistant Professor, Department of Commerce, Dr. Lijum Nochi, Assistant Professor, Department of Economics and Dr. Tasi Kaye, Assistant Professor, Department of Commerce, are gratefully acknowledged. The mastery expositions of their respective subject matter have benefitted the participants greatly and we are indeed thankful for their unstinting effort in making the programme an impressive event. The training programme would have been incomplete without the Industrial Visit to one of the local Food Processing Industries, and for making this possible we are thankful to the Bosco Integrated Development Centre, located at Yupia/ Tigdo, Papum Pare district, Arunachal Pradesh for having allowed us to visit their food processing unit. The help and support rendered in this regard by Mr. Danda Baishya, Food processing expert and Mr. Fanuel Kashop, Marketing Officer, Bosco Integrated Development Centre is duly admitted. Our Sincere acknowledgement also goes to Mr. Pradeep Kumar, Chief Editor of Arunachal Front who graced the valedictory function as the Chief Guest. He is one of the founding members of the Mass communication Department at RGU- Itanagar and a pioneering and renowned personality in the Media of Arunachal Pradesh. Director IIRD- Shimla Institute for Integrated Rural Development- IIRD, Shimla 6

7 PREFACE The present Report entitled, Entrepreneurship Development Programme (EDP) in Food Processing is focused on imparting entrepreneurship skills to the youths of North east India. This is a premier work of the Institute for Integrated Rural Development (IIRD), Shimla which covers the training programme details undertaken for entrepreneurship development in food processing. This programme is linked with the EDP programmes of the National Institute of Food Technology Entrepreneurship and Management (NIFTEM) established in Sonepat, Haryana. The main emphasis of this programme was to make the youths of Arunachal Pradesh skillful in Enterprises related to food processing. In order to target the objectives of the programme the present report is therefore divided in five chapters (referred as DAYs). A brief summary of the work presented in these DAYs is as follows: DAY - 1 incorporates three Sections in detail. The Section - 1 deals with the details of inaugural session and defines the objectives of the EDP and the Mission of NIFTEM. This section also defines the Entrepreneurship Definition & Entrepreneurial Process related to the EDP. The section- 2 deals with the lectures, like, Entrepreneurship Procedure, Proper Planning for Enterprise Management, Launching of the Enterprise, Management of Enterprise, Characteristics of an Entrepreneur and also defines the Soft Skills for Entrepreneurs. The section 3 of the DAY -1 deals with Case studies of Successful Food Processing Enterprise including Strategies for Successful Entrepreneurs. DAY - 2 also integrates three Section s details. The Section -1 deals with whom and for what kind of information one has to approach for EDP. The Section 2 is related to Planning for Small Scale Food Processing Industry. This section also deals with Some Prerequisites and Requirements to start Projects in EDP. The Section 3 explains the Role of different Financial Institutes in setting of the Food Enterprise. DAY - 3 assimilates four Sections of the day. The Section -1 deals with the roles of different organizations in EDP especially the role of District Industries Centre (DIC) and Role of National Bank for Agriculture and Rural Development (NABARD). The Section -2 defines the Role of Krishi Vigyan Kendra (KVK), National Small Industries Corporation (NSIC) and Ministry of Small and Medium Enterprise (MSME). The 3 rd Section briefs about the different schemes of the Ministry of Food Processing Industries (MoFPI) in EDP with the linkages with different institutions and organizations. The 4 th Section deals with a centrally sponsored scheme-national Mission on Food Processing (NMFP) of MoFPI. Institute for Integrated Rural Development- IIRD, Shimla 7

8 DAY 4 incorporates three Section s details. Under section 1, the Role of National Horticulture Board (NHB) and North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC) is explains in detail. The Section -2 deals with Business Opportunity Guidance for EDP and the Section -3 deals with Brainstorming on Product Identification of Food Processing. DAY - 5 incorporates two Sections related to Individual Counseling on Product Identification in Food Processing and Preliminary Project Writing Profile PPR Formulation & Discussion. The DAY 5 also explains about Valedictory Session. The details of Industrial visit of the participants to Local Food Processing Industries and the press cuttings related to the EDP are enlisted at the end. Institute for Integrated Rural Development- IIRD, Shimla 8

9 ABOUT IIRD Institute for Integrated Rural Development (IIRD) is a non-profit organisation dedicated towards bringing rural prosperity through the following areas: research and studies; training and capacity building; technical support and consultancies; and institutional networking in the national and global perspectives. Established in 2004, IIRD has been empanelled and approved by various departments, ministries, PSUs; it has been enlisted with international organizations under different initiatives. With the corporate office in Shimla, IIRD has been operating through four missions, ten centres, and two sub-missions across the country by establishing regional chapters in New Delhi, Bhopal, Ahmedabad, Chennai and Guwahati. During this year, IIRD covered one more step by installing its chapter in Nigeria and is gradually trying to expand internationally. The main focus of all interventions under different centres and missions is to create more employment opportunities to enhance the quality of life of the people it serves, besides remaining environmentally conscious. The organization endeavors to adopt innovative approaches in all its activities with maximum use of technology and optimum use of resources to make the operation impact oriented, transparent and participatory. Ever since its inception IIRD has been striving to contribute in the process of integrated planning, partner with government programs to promote sustainable development with participatory approach. For tangible contribution in various fields of development process, IIRD Shimla, has been enjoying the status of one of the leading developmental organizations. Institute for Integrated Rural Development- IIRD, Shimla 9

10 INTRODUCTION In India, along with tremendous economic growth, there has also been a lot of unemployment and it is important for government, policy makers and entrepreneurs to find ways to create more livelihood options in different sectors. If talking about the agriculture sector of the country, this sector, after services and industry sectors, contributes 3rd highest contribution in nation s gross domestic product (GDP) and provides employment to approximately two third of the population. This sector s contribution in GDP in was 51.9 % as highest, which has now come down to 13.7 per cent in at prices. The decrease in the share of agricultural sector in GDP of the country in comparison to other sectors is on account of structural changes due to a shift from a traditional agrarian economy to industry and service dominated one. Thus this declining contribution of agriculture sector needs encouragement to boost its output. That s why, food processing and entrepreneurship in agro-horticulture sector becomes important. The potential of agriculture sector has not been tapped due to underdevelopment of the food processing sector in India. World-class institutions for technology, management and entrepreneurship are a critical requirement for the growth of food processing industries, since they would address the gaps in the current Indian scenario by developing world-class managerial talent and entrepreneurship with adequate technical background in foods sciences and technology; increase the importance of food hygiene and safety standards; facilitate business incubation services; and have market intelligence function of collecting and imparting information such as demand and supply trends in the Indian and overseas markets, etc. Without entrepreneurship and growing number of entrepreneurs, an economy is certain to become sluggish in growth. Entrepreneurial dynamism forms the cornerstone of a progressive society as it is a purposeful activity that attempts to create value through recognition of business opportunity, management of risk appropriate to opportunity and through communicative and management skills to mobilise human, financial and material resources necessary to bring a project to fruition. This gives a definite upsurge to the economic growth of a nation. In India the National Institute of Food Technology Entrepreneurship and Management (NIFTEM) established in Sonepat, Haryana, is a premier autonomous Institution under the Ministry of Food Processing Industries (MoFPI), Govt. of India to produce world-class business leaders, develop globally competitive processes and technologies and international best practices in the area of food technology, entrepreneurship and management. It also carry out research and development (R&D) in frontier areas, develop world class technologies and assist the Government in policy making on food processing. Being a prime academic institution in the areas of food technology, entrepreneurship and management, NIFTEM would offer courses and training programmes of global standards with optimal mix of inputs on food Institute for Integrated Rural Development- IIRD, Shimla 10

11 technology, management and entrepreneurship. With all these mission NIFTEM also offers continual training to the industry to enhance their skill and be updated on global trends in food research and technology by consultation with the stake holders. To make youths of the Northeastern region of the country, a skillful entrepreneurs in food processing, the Institute for Integrated Rural Development (IIRD) Shimla has taken an initiative to conduct the present Entrepreneurship Skill Development Training Programme at Rajiv Gandhi University, Itanagar under the sponsorship of NIFTEM. BACKGROUND Northeast India includes the adjoining Seven Sister States and the Himalayan state of Sikkim. The 39 million people of Northeast India constitute about 3.8% of the total population of the country with the total literacy rate of 68.5% (2001 census). This region is predominantly rural with over 84% of the population living in the rural areas. The economy of the Northeast region is related to agricultural sector. Diminutive area is available for established agricultural practices. Along with established agriculture, jhum (shifting cultivation) is still in practice by a few native groups. The unapproachable topography and internal disturbances has made difficulties for rapid industrialization in the region. In the 21st century, there has been recognition among policy makers and economists of the region that the main stumbling block for economic development of the Northeastern region is the disadvantageous geographical location. The Northeast region has tremendous scope of development with global business because this region shares almost 98% of its borders with China, Myanmar, Bhutan, Bangladesh and Nepal. So, this region requires a push through better policies and plans for rapid development in every sector with human resource development. The present initiative of IIRD in the form of an Entrepreneurship Skill Development Programmme in Food Processing was the required premier initiative toward entrepreneurship development of the human resource in the Northeast region. There has tremendous need and opportunities in Entrepreneurship Development Programme (EDP) in different sectors in this region to support the people for increasing livelihood options, improving their lifestyle and contributing in country s GDP. Institute for Integrated Rural Development- IIRD, Shimla 11

12 OBJECTIVES The primary objectives of the Entrepreneurship Development Programme (EDP) in Food Processing were as under: Expose the participants to the key steps in startup venturing process and equip them with adequate knowledge to initiate a venture in Food Processing and Agro-based technologies and/or services. Equip them with requisite skills, knowledge and competencies to convert their startup idea into a viable business entity. Select qualifying individuals with bankable project reports to get an opportunity to present the same for incubation support or appropriate funding support. To cater to the growing need of the food processing industries for trained manpower (including entrepreneurs, managers, technologists, skilled workers) and also keep abreast with latest technology & diversification and new ways of managing and marketing to face global competition. To ensure sustainable employment opportunities to the people and also to reduce the gap in requirement and availability of skilled manpower in food processing sector. Institute for Integrated Rural Development- IIRD, Shimla 12

13 DAY 1 SECTION 1 Inaugural Session The Inaugural Session of the Entrepreneurship Development Programme (EDP) was initiated with the arrival of the Chief Guest, Mr. Tokong Pertin, Honorable Director, Trade and Commerce, Arunachal Pradesh and Guest of Honour, Mr. Moji Riba, Head, Department of Mass Communications, Arunachal Pradesh. The Institute for Integrated Rural Development (IIRD)-Shimla was represented by Ms. Sunita Singh, Project cum Training Officer, Centre for Local Self Governance (CLSG) and Dr. Naosekpam Ajit Singh, Scientist, Centre for Livelihood and Microfinance (CLMF). The local programme coordinator Mr. Sunil Koijam, Assistant Professor, Department of Mass Communications was the Convener of the Inaugural session. The opening remarks for the session were given by the Guest of Honour, Mr. Moji Riba. He is the fourth Indian to receive the Rolex award for Enterprise for his sustained work towards the preservation of the culture of Arunachal Pradesh. He welcomed the training program and expressed hope that the participants will learn a lot during the sessions to be conducted by IIRD- staff and various subject experts related to entrepreneurship and food processing industry. He also expressed his thankfulness to NIFTEM for sponsoring this program and hope that the state of Arunachal Pradesh can make a great stride in the field of food processing with the assistance and guidance of such National Institutes. Mr. Moji Riba giving his opening remarks Ms. Sunita Singh giving her introductory remarks about the programme Institute for Integrated Rural Development- IIRD, Shimla 13

14 The resource person and trainer from IIRD, Ms. Sunita Singh, in her address, said that the main thrust of the organization is to contribute in filling the development gaps. While contribution of agriculture to the nation s GDP is the highest, its impact is not seen globally. That s why, food processing and entrepreneurship in agro-horticulture becomes important. She further said adding while there has been tremendous economic growth, there has also been a lot of unemployment and it is important for entrepreneurs to find ways to create livelihoods. Mr. Tokong Pertin, Director, Trade & Commerce speaking as the Chief Guest Inaugural Session of the EDP program sponsored by NIFTEM The Chief Guest, Mr. Tokong Pertin, gave an inspiring speech and expressed that along with the Govt. of India s thrust on the Look East Policy and impending access to large markets of the ASEAN countries, we need to prepare ourselves and be in readiness to avail the opportunities that this trade will throw open. Quoting Union Minister of State for Commerce and Industry E.M.S. Natchiappan, who in his recent visit to the State had said that Nampong and Arunachal will become the gateway to Southeast Asia. Mr. Pertin said that the proposed re-opening of the Stillwell Road is a precursor to greater trade in the region. The meeting scheduled with officials of the Myanmar Govt. on November 27 and 28, 2013 is going to open up great opportunities for trade through this historic road, of which 31 km lie in Arunachal, he said. He further stated that this, along with the proposal to create an industrial cluster on food processing at Jairampur is a pointer to the great need to develop skills in this sector. Terming entrepreneurs as the drivers of economy and as job creators, he said that today the youth need to see the opportunities and build skills to benefit from this development. Emphasizing on the importance of enterprise in the agro-horticulture sector, he said, We in Arunachal have a double advantage because we Institute for Integrated Rural Development- IIRD, Shimla 14

15 are fundamentally an agrarian society. We have a strong local tradition of agriculture, we understand our resources and we have the potential to trade in it in future, more so because of the organic nature of our produce. While felicitating Dr. Naosekpam Ajit Singh, Scientist from IIRD and Mr. Moji Riba, Asst. Prof. Sunil Koijam, called upon the trainees to take maximum advantage of the large body of experienced resource persons who would be conducting sessions during the workshop. A section of the participants attending the Entrepreneurship Development Programme on Food After the inaugural session a short session was conducted for the trainees by Ms. Sunita Singh. She introduced NIFTEM and the various activities and training programmes conducted by NIFTEM by providing the following information. NIFTEM is a brainchild of the Ministry of Food Processing Industries (MoFPI). It was created with a vision to establish a world-class Institution to cater to the various stakeholders such as entrepreneurs, industry, exporters, policy makers, government and existing institution. NIFTEM works actively in assisting in setting food standards, businesses incubation and information sharing. It would also be an apex Institution in the field of food technology and management, networking and coordinating with other institutions of the same field. NIFTEM is located at Plot No. 97, Sector 56, Phase IV & V, HSIIDC Industrial Estate Kundli, District Sonipat, Haryana. It is an international center of excellence to cater the needs of various stakeholders such as entrepreneurs, industry, exporters, policy makers, government and existing institutions. Institute for Integrated Rural Development- IIRD, Shimla 15

16 Mission of NIFTEM i) To produce world-class business leaders, develop globally competitive processes and technologies and international best practices in the area of food technology, entrepreneurship and management. ii) To carry out R&D in frontier areas, develop world class technologies and assist the Government in policy making on food processing. iii) To be a prime academic institution in the areas of food technology, entrepreneurship and management, NIFTEM would offer courses and training programmes of global standards with optimal mix of inputs on food technology, management and entrepreneurship. iv) To offer continual training to the industry to enhance their skill and be updated on global trends in food research and technology by consultation with the stake holders. NIFTEM would play a pivotal role in developing food standards, quality, accreditation and certification; keeping a repository of international & national standards and also advising the Government on matters related to international food standards. NIFTEM would be an apex information resource centre on aspects of food processing including information on products, technologies, management practices, food standards, markets etc., NIFTEM would specifically focus on providing comprehensive information to exporters in the food sector. NIFTEM would provide incubator services to enable entrepreneurs to develop sustainable businesses. On the strength of in-depth industry expertise provided by NIFTEM s resources pool, which can in turn catalyze the growth of the food processing sector by nurturing worldclass entrepreneurs. Ms. Sunita Singh Interacting with the participants Institute for Integrated Rural Development- IIRD, Shimla 16

17 Discussion on Objectives of the EDP Programme The objectives of the EDP programme were discussed in detail among the participants. The primary objectives of the present programme were as under: Expose the participants to the key steps in startup venturing process and equip them with adequate knowledge to initiate a venture in Food Processing and Agro-based technologies and/or services. Equip them with requisite skills, knowledge and competencies to convert their startup idea into a viable business entity. Select qualifying individuals with bankable project reports to get an opportunity to present the same for incubation support or appropriate funding support. To cater to the growing need of the food processing industries for trained manpower (including entrepreneurs, managers, technologists, skilled workers) and also keep abreast with latest technology & diversification and new ways of managing and marketing to face global competition. To ensure sustainable employment opportunities to the people and also to reduce the gap in requirement and availability of skilled manpower in food processing sector. Feedback from Participants After the brief introduction, feedbacks from the trainees were invited regarding their expectation. The expectations of the trainees are listed as follows: i) Learn about entrepreneurship ii) The preservation and marketing of food products iii) Process and requirements to start a food processing unit iv) The various supports that can be availed from local and national bodies v) Economic implications of initiating and running a small scale industry Institute for Integrated Rural Development- IIRD, Shimla 17

18 Entrepreneurship Definition & Entrepreneurial Process This Session conducted by Dr. Naosekpam Ajit Singh (Resource person from IIRD) Dr. N. Ajit Singh conducting a Session The session covered the following An entrepreneur is defined as an individual possessing the qualities of leadership and, additionally, is an innovator of ideas regarding manufacturing, delivery, or service needs. According to Schumpeter, an entrepreneur is someone who is willing and able to convert a new idea or invention into a successful innovation. "Entrepreneurship" may result in new organizations or revitalize mature organizations in response to a perceived business opportunity. Without entrepreneurship and growing number of entrepreneurs, an economy is certain to become sluggish in growth. Entrepreneurial dynamism forms the cornerstone of a progressive society as it is a purposeful activity that attempts to create value through recognition of business opportunity, management of risk appropriate to opportunity and through communicative and management skills to mobilise human, financial and material resources necessary to bring a project to fruition. This gives a definite upsurge to the economic growth of a nation. Economic growth is an upward change whereby the per capita income increases over a long period of time. If economic growth is the effect, entrepreneurship is the cause. Entrepreneurs are the ones who explore opportunities, scan the environment, mobilize resources, convert ideas into viable business proposition and provide new products and services to the society by bringing together and combining various factors of production. An entrepreneurial individual has a distinct concept, vision and a dream and is able to convert this vision into products. Such individuals are driven by task, challenge and opportunity with very high achievement orientation. If you wish to start and succeed in your enterprise, you need to play different roles at different stages. Institute for Integrated Rural Development- IIRD, Shimla 18

19 SECTION 2 Entrepreneurship Procedure The process of planning includes planning for execution of various government formalities. Though the government in the post-liberalization era intends to reduce permissions/clearances to free the industry from bureaucratic controls, you need to clear specific formalities to avail certain benefits. The following formalities need to be considered for small-scale units: 1. Registration as Small Scale Industry (SSI) Though SSI registration is not mandatory according to recent changes in the rules, it is advisable that you register your small-scale unit with the District Industries Centre (DIC) of the district where your project will be located. The government requires this registration to plan for future needs of the industry and it is in your interest to register your unit. 2. Acquisition of Infrastructure Facilities If you plan to locate your project in an industrial estate promoted by a government agency, you may apply for a built-up shed or a plot of land. You can start your activities once the shed/plot is offered. If you have been allotted a plot, you can start construction after your building plans are approved. In either case, you have to apply for electricity and water connection to the concerned authorities. 3. Pollution Control Clearance: Obtain NOC or Consent You should also apply for obtaining an NOC from the State Pollution Control Board (SPCB). If your unit is likely to be a pollution hazard or may discharge effluents, the SPCB first issues an NOC with certain conditions to install facilities to check air or water pollution to specific levels. After you have installed the necessary facilities and they are satisfied, the SPCB gives its consent to start operations. 4. Constitution of the Business You should decide on the organizational form of your business, viz. if it should be a proprietorship, partnership or a private limited company, according to the size of its operations and the degree of risk involved. In proprietorship, the gains and losses of the business rest with the proprietor, while in partnership, all the partners share the gains and the losses except the minor partners, who are exempt from bearing the losses. In a private limited company, the members take the gain or losses as per their holding in the company, for it is considered to be a separate legal entity. Once the business constitution is decided, you may undertake necessary formalities for registering the firm accordingly. Institute for Integrated Rural Development- IIRD, Shimla 19

20 5. Arrangement of Finance for Fixed and Current Assets After taking above clearances, you may apply for a term loan either to a state level financial institution or a commercial bank, with a techno-economic feasibility report, including market survey, and all documentary evidence justifying your claim for the project being feasible. Once the loan is sanctioned, you may have to execute necessary legal documents mortgaging your assets. The disbursement of the term loan usually starts after you have fulfilled all the conditions and also after 50 % of your own capital is raised and invested in the project. The institutions generally disburse 75 % of the loan sanctioned on a matching basis. Thereafter, you should raise and invest the rest of your contribution to stake your claim for disbursal of the balance term loan. Simultaneously, you can also negotiate with your bankers to sanction the working capital requirements. The bankers would, however, consider the working capital loan only after the term loan is sanctioned. If you propose to locate your project in developing areas eligible for state incentives, you will need to apply for registration and sanction with the state authority to avail the incentives. Only after you can get the sanctions and start implementing your project. 6. Government Formalities Experience shows that many people do not give adequate weightage to complying with various government formalities. Utmost care should be taken in this connection during the planning stage itself, as in the case of ignorance the project implementation gets delayed and incurs cost overruns, and sometimes derails the entire project. You must also be aware of the sequence of steps to be followed while planning a small-scale unit. There are no rigid rules, but experience reveals that nothing important will be missed if you follow the sequence. Some activities can be handled simultaneously. The sequence may vary according to the needs and size of your project. You may decide basing on ground realities. The steps above will help you develop an insight into project planning. Fine tuning for project implementation activities at the planning stage will help you coordinate resources appropriately in keeping with the project needs and avoid slippage in implementation and cost overruns. Proper Planning for Enterprise Management Different aspects need to be considered to make any activity successful. Proper understanding of the subject and planning related to that, followed by timely execution helps in being successful. Establishment of enterprise and its proper management demands consideration of these aspects. Institute for Integrated Rural Development- IIRD, Shimla 20

21 A proper planning is an important component prior to start any enterprise. The following points play important role in proper planning: Acceptability among the consumers and detailed information about the food product targeted for production. If new, educate the targeted consumers regarding the new product and its utility and benefits. Ensure availability of good quality raw material. Utility like electricity, water and provision for proper waste disposal. Consumer survey and product feedback of the target product for establishment of demand and price expectations. Acquire technical know-how of the technology through proper training from reputed Institute. Select good quality processing equipment set up to give high quality product at low energy input. Study of Govt. Schemes, facilities and financial support available from financial organizations. Establishment of connection with different organizations to update the technical knowhow from time to time. Preparation of techno-economic feasibility report and project profile of the enterprise. Preparation and execution of work plan in specified time frame for achieving targeted success. Launching of the Enterprise After planning for different types of understanding and the rules/guidelines, it is desirable to start the enterprise by organizing proper launching of the activity. Points related to these aspects are: Launching of the enterprise is an activity which helps the entrepreneur in enhancing the base of the product and activity among the masses at a cost as low as possible (may be at the making cost). Inauguration of the activity should be organized very effectively and in an impressive way but at the low cost. This aspect is important mainly for the cottage scale industry as the enterprise does not have enough finance for bookings. Institute for Integrated Rural Development- IIRD, Shimla 21

22 Invite people from different walks of life and socio-economic segments of population for launching function. The chief guest of the function should be such that one enjoys the mass following/base and people believe in his words. Information in the form of small leaflets, speech on nutrition and health benefits of the products should be given to public. Announcement regarding sale points established in the town and adjoining areas to facilitate easy purchase by the costumers. Management of Enterprise After starting the enterprise, its proper management is essential part for stability and growth of the enterprise. It has seen that even large industries, sometimes, reaches inadequate destination mainly because of the inadequate attention to management aspects. Whatever may be the scale of the enterprise, it is imperative to give management aspect due importance. Especially for cottage scale enterprise, the following points may be of significance; Make regular planning a part of the management plan. Minimise the wastage of electricity, water, chemicals and raw material to bring down the cost of production. Give personal attention to the critical steps in the manufacturing process. To maintain the product identity and speciality, ensure that the other entrepreneurs don t comply the manufacturing process. Be prepared with time for adoption of newer technologies, equipment type, by product processing approaches to bring the newness to your activities to meet the changing expectations and requirement of the costumers. For safe manufacture, ensure proper cleanliness, hygiene inside the unit, and arrangement for safe waste disposal. It should exhibit commitment in favour of health of the consumer continued sincere inputs and strict compliance of guidelines even sometimes at higher cost. Institute for Integrated Rural Development- IIRD, Shimla 22

23 Characteristics of an Entrepreneur Session covered my Ms. Sunita Singh 1. A strong desire to win Most people dream of success, but rarely do anything to implement it. In contrast, entrepreneurs have a strong desire to continuously achieve new goals and do not rest till they win. 2. An approach of never-say-die Once committed to a goal and a well-planned course of action, entrepreneurs never retract. Difficulties do not deter them and they work hard till the entire project is successfully accomplished. 3. Entrepreneurs prefer a middle-of-the-road strategy while handling tricky situations Entrepreneurs are not gamblers, they don t take high or uncalculated risks; They prefer a moderate risk to a wild gamble, high enough to be exciting and containing a reasonable winning chance. 4. Alert to opportunities and seizing them to their advantage Entrepreneurs are innovative and can convert crises into opportunities and they are realistic enough to ensure that the opportunity suitably leads to realization of their goals. 5. Dispassionate approach to problems Entrepreneurs will not let personal likes or dislikes come in the way of their taking a business decision. They seek out expert opinion and suggestions rather than friends and relatives. Their decisions are based on their objectives and not emotions or impulses. 6. It is important for them to know how they are faring when they work on their goals Entrepreneurs take immediate feedback on performance and prefer prompt and accurate data, irrespective of whether these are favourable or not. Unfavourable news spurs them into making amends to attain their goals. 7. Entrepreneurs do not get deterred by unfamiliar situations Achievement-driven people are optimistic even in unfamiliar situations. Even if they find the odds daunting, they see no reason why they can t succeed with their treasure of abilities. They march undeterred, making the best of fine opportunities that come their way, even without guidelines. They quickly come to grips with the new environment and present a picture of boldness and prudence. They apply their special insight and skill to quickly understand the environment and adapt to it. Institute for Integrated Rural Development- IIRD, Shimla 23

24 8. Dislike working for others Entrepreneurs do not like to work for others and therefore start off on their own. They wish to be their own masters and be responsible for their own decisions. 9. Flexibility Successful entrepreneurs have an open mind and do not hesitate to change their decisions. 10. Think ahead of others and plan for future Most successful people set goals for themselves and plan to realize them in a time frame. 11. Capable to deal with people at all levels An entrepreneur comes across all kinds of people. He has to make them workable for him and do help to realise his objectives. He likes working with people and has skills to deal with them. 12. Skillful in influencing others Successful entrepreneurs can influence others and motivate them to think and act in their way. 13. Works for long hours and simultaneously tackle different problems The entrepreneur has to cope with several situations simultaneously and take the right decisions, even if it involves physical and emotional stress. This is only possible if one has the capacity to work long hours and still keep energetic. 14. They know themselves An achiever channelises his fantasies into worthwhile, achievable goals and sets standards for excellence. He can do this for he knows his strengths and weaknesses, and so adopts a positive approach. He is seldom negative. 15. Thinks ahead They have the ability to look into the future. They won t allow the past to bother them and think only of the present and future. Bygones are bygones, what of now? This is their usual response. An individual may not have all these qualities, but most will have many. The first step for a person aspiring to become an entrepreneur is to make an inventory of his traits. This self-awareness and analysis will help him define his strengths and overcome weaknesses Institute for Integrated Rural Development- IIRD, Shimla 24

25 Soft Skills for Entrepreneurs 1. Communication Skills Communication is the process of exchanging ideas, facts or opinions by two or more persons. For communicating, we use different modes, like oral, written or non-verbal. The process is explained by using this diagram: Speech Face to face (oral) Non-verbal Facial expression, body language, etc. Writing Reports, documents, etc. Major vehicles for communication In life, we use several methods to communicate effectively (i.e., gestures/ watch for response/ words/ pictures). Successful communication depends on correct receipt of the message and receiving is an active element. Communication vehicles will be effective only if both parties are involved in the process. Good communicators listen and observe. They are alert receivers of response signals while they are also communicating. This helps them tailor their communication style to make it easier for the receiver to absorb or accept the message. 2. Creativity and Problem Solving An entrepreneur has to be creative. He has to arouse and enhance creativity and experience, competition not only with others but also the standards of excellence set for himself. Certain pre-conceived ideas create barriers in the growth of creative thinking, which are as follows: Self-imposed Restricted mindset Institute for Integrated Rural Development- IIRD, Shimla 25

26 Nature of compliance Backtracking to obvious challenge Jumping to conclusion Fear of being ridiculed It calls for a positive attitude, an open mind, insight and right perception to remove these barriers and arouse and enhance creativity. Everyone faces problems of different nature and magnitude. Sometimes in daily life, we encounter problems so often that we don t even notice them and this is because of our monotonous experience in dealing with them and hence the spontaneous reactions result in solutions. But we do get stuck when faced with unusual and difficult problems, as our routine reactions fail to produce solutions. In such cases, different approaches and ways have to be tried out. Similarly, as an entrepreneur you may face several problems while managing your small-scale enterprise. If you develop an appropriate system, approach and methodology to solve problems, it will prepare you to manage your affairs and problems smoothly and without tension. There are several qualitative and quantitative approaches evolved in management science to help solve problems. The right strategy would be to understand your own environment, resources, capacities, limitations, strengths and weaknesses in order to design the right approach. This approach will help you, initially, in working on problems and, later, in formulating your own strategy to solve them. Following steps can help you to have a problem-solving attitude and mechanism: Create a desire to solve problems Recognise the problem Formulate the possible causes Steps for creating problem-solving attitude and mechanism Institute for Integrated Rural Development- IIRD, Shimla 26

27 SECTION 3 Case studies of Successful Food Processing Enterprise including Strategies for Successful Entrepreneurs Session covered by Dr Ajit Singh Case 1: CREMICA group It is extremely important to acknowledge the fact that success eventually comes in any profession where the person enjoys the work involved. We have a similar success story about The CREMICA group. It was established in 1978 by Mrs. Rajni Bector turning her passion for Ice Cream making (also her hobby) into a small backyard enterprise. She established the CREMICA group today a widely diversified food products and services company with an annual sales figure of Rs. 400 Crores, growing at the rate of 30 % per annum. In the course of the past two decades, the CREMICA group has established itself as a huge food products conglomerate, leading the food processing business through its range of products, its internationally certified production facilities, the consistency of its quality, and its unmatched expertise in the industry. Today, Cremica is known for its unique recipes, health oriented ingredients and state- of- the art standards. Full Story Relating her own story, Mrs. Bector said, I started the business as a hobby and sold kitchen-made ice creams at a very small scale. My hobby converted in a profession when I saw the liking of my ice creams at a stall I had put for a Diwali Melas in the late 1970s. Although I had no formal training, the recipes were a runaway success. In 1982, with a small investment of 300/-, a small unit was set up at home. We produced only ice creams and puddings in the first year. Later the company ventured into the biscuits, breads and condiment business. Today, Cremica group does sales of over Rs. 400 crore (Rs. 4 billion) and is an important link in the supply chain to the fast food industry with an inventory of buns, breads, sauces, ketchups and ice creams toppings. Cremica is an approved supplier of bakery and liquid products to World s largest fast food giants Mc Donald s. Its products are also on the approved list of Canteen Stores Department, which caters to the requirements of Indian Armed Forces. It is also a major supplier to Indian Railways, Super Bazaars, Big Bazaar, Vishal Mega Mart, Reliance, Pizza Hut, Cafe Coffee Day, Barista, Papa John s, United Nations (World Food Programme), Jet Airways to name just a few. Institute for Integrated Rural Development- IIRD, Shimla 27

28 Cremica manufactures high quality Biscuits, Bread and Buns, Confectioneries, Indian Gravies /Curries, Tomato Ketchup, Sauces, Mayonnaise, Thousand Island, Spreads, Syrups, Toppings, Salad Dressings, Biscuits, Bread & Buns, Ice-Cream, Confectionery and Indian Snacks, Fruit & Flavored syrups for Milk and thick shakes, Ice Creams and Desserts etc. While talking about the source of inspiration as an entrepreneur, she said, Entrepreneurship came naturally to me. After all entrepreneur is only a person who manages things by his/her own and in my opinion women are natural entrepreneurs. Innovation and pursuit for excellence is my magic potion. I have never compromised on the quality and taste of my products. This indefatigable pursuit to create the best products has seen Cremica rise to where it is today. Gradually it moved from my kitchen, to backyard and then to our first factory unit. I have no special abilities and am just an ordinary person. But willingness to succeed by working hard and learning have stood me in good stead. I was lucky to have the support of my family along the way. The company was incorporated as 50:50 joint ventures with the Quaker Oats Company of U.S.A a Fortune 200 company. This project has been set up to produce liquid products such as, Tomato Ketchup, Mayonnaise, Tartar & Sandwich Spreads, Milk shake Syrups and Ice cream Toppings mainly for Mc Donald s requirement in India and for the neighboring countries. The plant has been operational from Oct Quaker Oats Company withdrew from the joint venture in and the name of the company changed from Quaker Cremica Foods (P) Ltd. to Mrs. Bector Food Specialities (P) Ltd. then company started institutional & retail market in addition to Mc Donald. In the year 2001, the company was converted into public limited company. Today the group operates India s largest tomato ketchup line and is country s largest producer of ketchup portion packs capable of packing 2.5 million sachets per year! These high quality products have made a mark and are even exported to Europe Africa, Middle East, US and Australia. Case 2: Krishna Pickles Mrs. Krishna Yadav, a native of Bulandshahar, Uttar Pradesh, migrated along with her three kids to Delhi in search of livelihood after her husband lost his job in At present she is a successful food processing entrepreneur based in Nazafgarh, Delhi. The motivational interventions and mentoring of scientists of Indian Agricultural Research Institute (IARI) enabled her to establish her famed food processing enterprise Krishna Pickles which is not only a means of earning her family a livelihood but she is also managing a business of more than a Crore turnover annually in a span of last ten years ( ). Institute for Integrated Rural Development- IIRD, Shimla 28

29 Full Story The family was passing through depressing times in when her jobless husband was psychologically devastated. But it was her perseverance and courage which enabled the family to face hardships stoically and migrate to Delhi after borrowing Rs. 500/- from friends. Once in Delhi, the family sought employment as caretaker of Tyagi Farms in village Rewlala Khanpur owned by Commdt. B.S. Tyagi who developed an orchard of ber and karonda under guidance of scientists of Krishi Vigyan Kendra (KVK), Ujwa. The low price of these fruits in the market was a major concern to which value addition and processing activities were suggested as a probable solution by scientists of KVK. This was the stage of enterprise idea generation and Mrs. Krishna Yadav underwent a training of 3 months duration in food processing techniques in 2001 at KVK, Ujwa. The first value added products prepared after training were 100 Kg karonda (Carissa carandas) pickle and 5 kg chilly pickle with an initial investment of Rs.3000/- fetching them a net profit of Rs. 5250/- after sale. A sense of achievement with taste of success propelled her to undertake production of Karonda Candy on a trial basis for few kgs. But it got spoiled and became infested with fungus. It did not deter her from her set path and her problem solving abilities came to the fore. She discussed this with scientists and food technologists and was able to come up with the right product after following appropriate scientific methods of preservation. This reflects concern for growth of her enterprise by taking up diversified products. Marketing was done by her husband who sold these products on hand pushed cart (rehri) on a roadside in Najafgarh. People used to laugh and make fun that now pickles will also be sold on cart like loose vegetables. But the family persevered and stuck to their agenda in a focused manner. Karonda Candy was a new product for the customers of the area which resulted in good response and profits. This experience gave her the confidence to move ahead towards her goal of establishing a full-fledged value addition enterprise and since then there was no looking back. The Present Scenario: From the starting days of Karonda Pickle and Candy preparation, she is now manufacturing 87 types of products like various chutnies, pickles, preserves, murabbas etc. At present, approximately 500 quintals of fruits and vegetables are processed generating a turnover of more than Rs. 1 crore from the factory and providing employment to others. The products are manufactured as per FPO guidelines utilizing traditional recipes and innovative ideas aimed at niche commercial clientele. The products are aimed not only as tasty food treats but also for certain medicinal and cosmetic usages. For example, Aloe-vera gel has cosmetic properties, but Aloe-vera gel with turmeric provides relief to joint pains of elderly. A juice Institute for Integrated Rural Development- IIRD, Shimla 29

30 made of extracts of Karela (Momordica charantia)- Methi (Trigonella foenum-graecum) - Aloe vera is having usages for diabetic conditions. In 2006, she attended training at Division of Post-Harvest Technology at IARI where she learnt to prepare fruit drinks using no chemical preservatives. Subsequently, she has signed a MOU with IARI for manufacturing Pusa Drinks based on Jamun (Syzygium cumini), Litchi (Litchi chinensis), Mango (Mangifera indica), and Strawberry (Fragaria ananassa), etc. From a roadside vendor to an owner of a factory, she has come a long way. The construction of her four storied factory fitted with all modern style food processing facilities is in advanced stages whereby single floors are devoted to specific activities like drying, washing, cutting, etc. Marketing and Linkages: She regularly participates in exhibition, melas, field days, seminars and conferences which provide visibility to her products and recognition to her efforts as an entrepreneur. This is a unique marketing strategy for brand establishment. Role of extension scientists of IARI has been critical in motivating her and providing mentorship for her agriculture based value addition enterprise. The marketing of her produce is done through four outlets/ shops, mobile vans, contract for bulk from BSF canteen, local marketing channels etc. She is able to manage her enterprise effortlessly with effective linkages developed with Government agencies for bulk orders, individual farmers for raw material availability, research institute for innovative technology and local women for seasonal help. Enterprise launching stage requires entrepreneurial competencies like initiative, innovativeness and risk taking behavior but sustaining an enterprise require effective networking skills, updating self with the recent technological breakthroughs, labour management, maintaining quality products and diversifying with new products keeping in view the changing customer preferences. Recognition and Award: Her case illustrate very well what a resource poor person can achieve with her perseverance, determination, hard work along with market savviness. Her success story has been published in many dailies with appropriate captions like sadak se factory tak, anpadh mahila ne kholi factory etc. On International Women s Day (March 13, 2012), she was honoured by Mrs. Mamta Sharma, chairperson, National Commission for Women, as one among 25 Most Outstanding Women of India. She was honoured by featuring in NCW brochure along with other renowned achiever women like Mrs. Indra Nooyi, Dr. Sarojini Pritam, Mrs. Ila Pathak and others. She has also received many awards and honours Institute for Integrated Rural Development- IIRD, Shimla 30

31 for her achievements from other government and non-government agencies. She has recently been shortlisted for ASPEE award. Lessons for Other Woman Entrepreneurs: Krishna Pickles case highlights that it is possible to take small steps to create big things. Success can be achieved with perseverance and a determination. Quality processed products are very much in high demand in the market; the key is diversified quality value added food products. Growth of enterprise can be facilitated by developing effective networking with all stakeholders and linkages. Many promotional marketing opportunities are available in the socio-economic environment of the entrepreneur which needs to be encashed on for enterprise visibility and brand development. The ability to continuously identify what kind of products customer demands is important in view of innovating aimed at fulfilling the gap in the market. Case 3: Ingty Dal Mills, Assam An Analysis of the Enterprise s Performance: Indicators of Unsustainability. The financial statements of the enterprise for the last two-three years showed that in and it made cash losses. An analysis of the structural strength and liquidity viz. ability to meet short-term liabilities, profitability and performance of the enterprise is revealing. Structural strength: The unit had promoter s fund of Rs.10 lakh in However, the accumulated losses by were Rs.6.62 lakh. Total outside liabilities had been rising because of non-payment of interest liabilities. Liquidity: The current ratio viz. current assets over current liabilities was 0.76 in and it declined to 0.52 in , showing that current Ingty Dal Mills, a sole proprietory firm, was promoted by Ingty to manufacture dal, besan and flour with an installed capacity of 12 MT/day for dal, 4 MT for besan and 8 MT for flour. This capacity is based on 300 working days in one shift of 8 hours. The Department of Industries and Commerce (DIC) granted permission to the unit to grind wheat in There are other Institute for Integrated Rural Development- IIRD, Shimla 31

32 Roller flour mills in the district for wheat milling. All are operational. This is the only unit engaged in processing of grams and other gram products i.e. dal and besan. The enterprise had potential for the local market and was doing well till 2000 and could repay interest and principal obligations to institutions in time. Later, payments were blocked owing to recessionary conditions and the enterprise had to be closed down due to non-recovery of receivables. Assets were insufficient to meet current liabilities. Current assets largely included stock and debtors while current liabilities were creditors. Though the promoters infused Rs.8 lakh into the business in the last three years, the liabilities of creditors remained high. Turnover: Stock of finished goods and receivables for credit sales were high in and Profitability: Since the unit was near Guwahati and the local market had good potential, the unit did well initially and the dues were regularly paid upto Performance deteriorated rapidly due to repayment problems from two major traders (debtors). A revival plan could have been evolved based on analysis of past performance and future projections on various parameters. Evolving cost of project and means of finance for revival was possible in the past when financial institutions were not finicky about reducing their Non- Performing Asset (NPA) portfolio. Today, most institutions prefer one-time settlement of dues. The only option for evolving, implementing and managing a sustainable project is to structure the cost of project and means of finance by properly estimating the cost of raw material procurement, working capital etc, as well as income, and deciding on the optimal means of finance through a capital structure analysis. Institute for Integrated Rural Development- IIRD, Shimla 32

33 DAY 2 SECTION 1 Whom to Approach for What? This Session was covered by Dr. Lijum Nochi Assistant Professor Department of Economics, Rajiv Gandhi University, Itanagar Dr. Lijum Nochi Delivering his Lecture The new entrepreneurs must know where to go for a particular piece of information as this knowledge will help them to avoid a lot of running around. For this, they must know clearly what they are looking for. Some may be completely ignorant, a few may know about marketing or production or finance, etc. The completely ignorant will require initial desk work and discussions with knowledgeable persons like the EDP trainer, extension officers, businessmen, small-scale industrialists, etc. This will help them accelerate the process of enterprise establishment. Those with some knowledge will require specific information. It will be useful for them to list the various things to be completed to set up their enterprise. This desk work will give them a clear idea about the assistance they need to fulfill their activities. Various development agencies assist entrepreneurs: Some agencies provide only general information and you yourself have to collect specific information. Some provide technical/marketing expertise in specialized areas. Institute for Integrated Rural Development- IIRD, Shimla 33

34 Some provide guidance in technical and financial matters, besides taking up turnkey responsibility (implementation assistance). But government formalities will have to be completed by the entrepreneurs themselves. They can contact the concerned departments/offices for information. You should only retain the relevant information/data while collecting information. You must keep important information at a proper place to find them when needed. The compilation and segregation of information will need table work and it should be compared with the checklist prepared earlier to ensure all data has been collected before actual commencement of work. Expert guidance will help in decisionmaking process. It will be useful to acquire first-hand information from institutions to get a clear picture of the entire exercise. A table below shows various sources of information for a new entrepreneur. They need not contact all agencies except the relevant ones. However, they must contact at least the following agencies to have knowledge about small scale industries and the procedures: Sources of Information for a New Entrepreneur Directorate/Commissioner of Industries Office State Financial Corporation Technical Consultancy Organisation and Agencies Conducting Entrepreneurship Development Programmes Whom to contact and for what Information Sr. No. Areas of assistance Source 1 For Selection of a Project SISI, DIC, TCOs, SFCs 2 Registration DIC 3 Finance Banks, SFCs, NSIC 4 Technical guidance DIC, TCOs, CFTRI, SISI, NSIC, DFRI 5 Training ED Inst., SISI, TCOs, DICs, CFTRI, NGOs 6 Infrastructure DIC, IDCs, LA 7 Raw Materials DIC 8 Plant & Machinery DIC, NSIC, SISI 9 Marketing information DIC, TCOs, EPC, (APEDA, MPEDA) Institute for Integrated Rural Development- IIRD, Shimla 34

35 Abbreviation used DIC = SISI = TCOs = SFCs = NSIC = DFRI = ED Inst. = CFTRI = DCs = LA = EPC (APEDA, MPEDA) = District Industries Centre Small Industries Service Institute Technical Consultancy Organisations State Financial Corporations National Small Industries Corporation Defense Food Research Laboratory Entrepreneurship Development Organisations Central Food Technology Research Institute Infrastructure Development Corporations Local Authorities like Municipalities Export Promotion Council (Agriculture and Processed Food Export Development Authority, Marine Products Export Development Authority) Institute for Integrated Rural Development- IIRD, Shimla 35

36 SECTION 2 Planning for Small Scale Food Processing Industry This Session was covered by Dr Ajit Singh Planning of a project is very critical these days. If we have the knowledge of all the resources available around us which can provide information for the project planning, then the implementation of the project is possible in very short time. Planning of the project involves following steps: 1. Project Identification It is the first and the foremost important step in the planning. Be always aware of the resources available around you on which you can base your project. The decision for establishing a project mainly depends on some factors, but there is not any set rule for this. It can be decided on the available market for a project, availability of some specific raw material in a particular area, high and regular demand of a specific product in the area, scope of some export oriented unit in the area. Apart from these factors it is advised that do not make harsh decision on the projects or don t go for a project already present in the area. If planning for some new project then a market survey for the demand of the project is also necessary. Identification of a sustainable project is considered as half battle won. A good business opportunity is that which is a techno-economically and commercially viable and feasible and environmentally sustainable. Every entrepreneur needs to identify a sound opportunity. To identify an opportunity, one need to follow these steps:- Collect basic information on local resource base, e.g. agriculture, forest and mines Take help from the DIC, Banks and other financial organizations for the opportunity identification (OI) exercises done earlier Discuss with octroi and sales tax officials about the inflow of goods Collect negative list of banned items for financing List out poor performing industry and try to know the reason of their failure Collect information on availability of infrastructure like power, water and transport etc. Specifically for food processing industries identification of business opportunity can be done on following parameters Institute for Integrated Rural Development- IIRD, Shimla 36

37 Natural Resource-Based Opportunities: such as the ones based on cereals, cash crops, fruits and vegetables, agro-wastes, animals, marine-based, processing of food products like cereals and pulses fruit preservation, pickles, honey, etc. Local Industry Based: those dealing in supply of intermediary raw material, ancillarisation, jobwork, recycling of industrial wastes, by-products, etc. Local Demand Based: which may include products like bread, biscuits, flour, spices etc. Export Based: any local product, which is being exported; or resources available locally to manufacture the items, which have good export potential. 2. Market Survey Markets are changing rapidly, becoming complex and competitive. It is difficult to keep pace with the rapidly changing demand and supply patterns as an entrepreneur is unable to respond quickly to a new environment. He needs better market understanding and a market survey puts him in contact with the market. A systematic use of this tool can reduce risks in decision-making. Markets are changing rapidly, becoming complex and competitive. It is difficult to keep pace with the rapidly changing demand and supply patterns as an entrepreneur is unable to respond quickly to a new environment. He needs better market understanding and a market survey puts him in contact with the market. A systematic use of this tool can reduce risks in decision-making. Market survey is a valuable tool to help minimise risks and increase the probability of success. However, that doesn t mean it is a sure-shot way to eliminate risk and guarantee complete success. You should undertake market assessment with a survey before you finalise marketing plans for your product or service. Conducting a market survey does not always mean contacting people directly. There may be information in the form of reports, published material or documents of trade/industry associations. Data may be collected from two sources: Primary data sources: Information coming straight from those in the specified market, e.g. in the toy market, information obtained from toy manufacturers and traders. Secondary data sources: Data existing in reports or in a published form and may not have been collected for specific purpose. Such information can also be had from census office, banks, traders and manufacturers association or published anywhere. Institute for Integrated Rural Development- IIRD, Shimla 37

38 3. Project Report Making After the project identification another step is to make a project report which is considered as a forecast plan for the project which shows the financial and technical requirement of the project. A feasible project report includes the following information: Background of the entrepreneur and constitution of the business Market potential and marketing strategy Selection of location Requirements of land and building Manufacturing process Requirements of plant and machinery Requirement of utilities Requirement of raw material Estimated cost of the project Proposed means of finance Cost of production and profitability Break-even point Cash flow statement Internal rate of return Institute for Integrated Rural Development- IIRD, Shimla 38

39 Some prerequisites and requirements to start the projects 1. Selection of Location The location should be decided according to the proximity to sources of raw materials, consumption centres, availability of infrastructure, necessary skills in surrounding areas and availability of incentives. However all these requirements may not available at one place but in this case decision should; be made on the basis of raw material availability, availability of the market, availability of transport on priority. Some cases show most entrepreneurs attaching more importance to available financial incentives and ignoring other important aspects guiding the selection of the location. Such misplaced emphasis may render the project unviable in the long run. Your decision on the location, therefore, should not just be based on incentives, but more on availability of infrastructure and skills. 2. Land and Building Before assessing land requirements, you must draw up a plant layout based on the type of facilities proposed to be installed. Normally, the land should not exceed five to six times the built-up area; but it all finally depends upon the project. Land in excess of the requirement will block up funds, which could otherwise be utilized for productive purposes. The land should be free from any encumbrances and should be non-agricultural. 3. Selecting the right manufacturing method Suitable manufacturing processes have to be identified for production. Some products may need a particular process depending upon raw material availability, the prices and the quality requirement of the end product. 4. Finance in hand To start any enterprise you must have some financial backup to cope up some immediate need. If you are going for a loan from the bank finance is needed in the form of margin money etc. 5. Government formalities and procedures i) Constitution of the Business: You should decide on the organizational form of your business, viz. if it should be a proprietorship, partnership or a private limited company, Institute for Integrated Rural Development- IIRD, Shimla 39

40 according to the size of its operations and the degree of risk involved. In proprietorship, the gains and losses of the business rest with the proprietor, while in partnership, all the partners share the gains and the losses except the minor partners, who are exempt from bearing the losses. In a private limited company, the members take the gain or losses as per their holding in the company, for it is considered to be a separate legal entity. Once the business constitution is decided, you may undertake necessary formalities for registering the firm accordingly ii) SSI Registration: Required for the Records - Though SSI registration is not mandatory according to recent changes in the rules, it is advisable that you register your small-scale unit with the District Industries Centre (DIC) of the district where your project will be located. The government requires this registration to plan for future needs of the industry and it is in your interest to register your unit. iii) Acquisition of Infrastructure Facilities: If you plan to locate your project in an industrial estate promoted by a government agency, you may apply for a built-up shed or a plot of land. You can start your activities once the shed/plot is offered. If you have been allotted plot, you can start construction after your building plans are approved. In either case, you have to apply for power connection to the State Electricity Board and for water to the authorities concerned. iv) Pollution Control Clearance: Obtain NOC or Consent: You should also apply for obtaining an NOC from the State Pollution Control Board (PCB). If your unit is likely to be a pollution hazard or may discharge effluents, the PCB first issues an NOC with certain conditions to install facilities to check air or water pollution to specific levels. After you have installed the necessary facilities and they are satisfied, the PCB gives its consent to start operations. v) Arrangement of Finance for Fixed Assets and Current Assets: After taking these clearances, you may apply for a term loan either to a state level financial institution or a commercial bank, with a techno-economic feasibility report, including market survey, and all documentary evidence justifying your claim for the project being feasible. Once the loan is sanctioned, you may have to execute necessary legal documents mortgaging your assets. The disbursement of the term loan usually starts after you have fulfilled all the conditions and also after 50 per cent of your own capital is raised and invested in the project. The institutions Institute for Integrated Rural Development- IIRD, Shimla 40

41 generally disburse 75 per cent of the loan sanctioned on a matching basis. Thereafter, you should raise and invest the rest of your contribution to stake your claim for disbursal of the balance term loan. Simultaneously, you can also negotiate with your bankers to sanction the working capital requirements. The bankers would, however, consider the working capital loan only after the term loan is sanctioned. If you propose to locate your project in developing areas eligible for state incentives, you will need to apply for registration and sanction with the state authority to avail the incentives. Only after you get the sanctions can you start implementing your project. Institute for Integrated Rural Development- IIRD, Shimla 41

42 SECTION 3 Role of different Financial Institutes in setting of the Food Enterprise This Session was conducted by Dr. Tasi Kaye, Assistant Professor, Department of Commerce, Rajiv Gandhi University, Itanagar Dr. Tashi Kaye delivering his lecture 1. Role of Banks Under a broad categorisation, approximately 77 percent of the total turnover of the MSME sector is linked to various industries in the manufacturing sector (agri and food products, textiles, metals etc.) and the balance is contributed by the entities linked to the services sector (agriculture, trade, retail, maintenance, IT, etc.). MSMEs in Eastern Indian and particularly North Eastern States have been lagging behind the other states in terms of access to financing from the banks. Low access to infrastructure and electricity and roads has significantly hindered the growth of the MSME industries in these regions and consequently their access to organized lending from banks. Small Industries Development Bank of India (SIDBI) The Small Industries Development Bank of India Act, 1989 envisaged SIDBI to be the principal financial institution for the promotion, financing and development of industry in the small-scale sector Institute for Integrated Rural Development- IIRD, Shimla 42

43 and to co-ordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector and for matters connected therewith or incidental thereto. Over the years, SIDBI has put in place financing schemes either through its direct financing mechanism or through indirect assistance mechanism and special focus programmes under its P&D initiatives. In its approach, SIDBI has struck a good balance between financing and providing other support services. Four basic objectives are set out in the SIDBI Charter, which are as: Financing Promotion Development Co-ordination For orderly growth of industry in the small scale sector. The Charter has provided SIDBI considerable flexibility in adopting appropriate operational strategies to meet these objectives. The activities of SIDBI, as they have evolved over the period of time, now meet almost all the requirements of small scale industries which fall into a wide spectrum constituting modern and technologically superior units at one end and traditional units at the other. a) Different schemes of SIDBI i) Loan Facilitation & Syndication Service Under this initiative, SIDBI facilitates Bank loans for new as well as existing manufacturing and service sector units. It is SIDBI s initiative in partnership with Banks, Rating Agencies (RAs) and Accredited Consultants (ACs). It s a transparent, structured mechanism for timely consideration of loan applications. ii) Growth Capital & Equity Assistance This scheme is mainly for the Existing Small and Medium Businesses in need of Capital for Growth. Growth Capital and Equity Assistance Scheme provides assistance in form of Mezzanine/ Convertible Instruments, Subordinated debt and Equity (in deserving cases).this quasi assistance has a higher moratorium on repayment and a flexible structuring. Institute for Integrated Rural Development- IIRD, Shimla 43

44 iii) Flexible Assistance for Capital Expenditure This scheme is mainly for the Existing MSME planning to Modernize, Upgrade Technology, Diversify by making large Investments in land/ building. Finance for up gradation and modernization - SIDBI Understands your need to adopt modern technological processes and undertake capacity expansion as per your business needs. SIDBI has been identified as a Nodal Agency for the releasing of assistance, monitoring, interface and coordination with Financial Institutions, Banks and the Government. SIDBI help New as well as Existing Small and Medium Enterprises benefit from the following Schemes: iv) FPTUFS Scheme for Food Processing Industries- This scheme was launched by the ministry of food processing industries with the up-gradation of processing capabilities of food processing industry in India. This scheme covers technology up-gradation/setting up/modernization/ expansion of food processing industries In fruit and vegetables, milk products, meat poultry, fisheries, cereal, other consumer food products, oilseed products, rice milling, flour milling, pulse processing and such other agri-horticulture sectors including food flavours and colours, oleoresins, spices, coconut, mushrooms and hops etc leading to value addition and shelf life enhancement. Eligibility - New as well as existing unit setup as sole propriety, partnership, cooperative societies are eligible for subsidy. Unit setup by women, schedule caste and schedule tribe are given priority for consideration of subsidy. Pattern of assistance - The scheme provides subsidy to a quantum of 25% of cost of eligible plant & machinery and technical civil works subject to a maximum of 50 lakh in general areas and 33% or upto 75 lakh in difficult areas (Jammu and Kashmir, Himachal Pradesh, Andaman and Nicobar islands, North Eastern states and Lakshadeep) and integrated tribal development project areas. Only new plant and machineries are eligible for the subsidy. The time and validity of this scheme is revised and updated time to time. Marketing fund for women - The assistance under the Fund is available to women entrepreneurs and organisations involved in marketing of products manufactured by women entrepreneurs to increase their reach, both in domestic and international markets. Institute for Integrated Rural Development- IIRD, Shimla 44

45 SECTION 1 DAY 3 Section 1 and 2 were covered by Ms. Devi Baruah, Assistant Professor, Department of Commerce, Rajiv Gandhi University, Itanagar Ms. Devi Baruah conducting her session Role of District Industries Centre (DIC) The 'District Industries Centre' (DICs) programme was started by the central government in 1978 with the objective of providing a focal point for promoting small, tiny, cottage and village industries and to make available to them all necessary services and facilities at one place. To facilitate the process of small enterprise development, DICs have been entrusted with most of the administrative and financial powers under the 'Directorate of Micro & Small Scale Enterprises'. DIC is headed by a General Manager who is assisted by managers, Dy managers, IDOs and other officers & staffs. Block level assistances are provided through IDOs at the Blocks. Basically the District Industries Centre is a promotional agency and acts as facilitation centre. Temporary and permanent registration of the enterprises in the form of EM 1 and EM2 respectively Implementation of various schemes and programmes for employment generation and extend welfare schemes. Co-ordination and liaison with various district bodies/ authorities. Institute for Integrated Rural Development- IIRD, Shimla 45

46 Assisting other Govt. departments with regard to industrial information/ surveys etc. Creation Project data banks Acts as the focal point of the industrialization of the district through promotional programmes. Opportunity guidance to entrepreneurs. Compilation of information about local sources of raw materials and their availability. Manpower assessment with respect to skilled, semi-skilled workers. Assessment of availability of infrastructure facilities like quality testing, research and development, transport, prototype development, warehouse etc. Organises entrepreneurship development training programs. Provides information about various government schemes, subsidies, grants and assistance available from the other corporations set up for promotion of industries. Advices the entrepreneurs on investments. Acts as a link between the entrepreneurs and the lead bank of the district. Implements government sponsored schemes for educated unemployed people. Helps entrepreneurs in obtaining licenses from the Electricity Board, Water Supply Board, No Objection Certificates etc. Assist the entrepreneur to procure imported machinery and raw materials. Organises fairs, marketing outlets in liaison with other government agencies. In Arunachal Pradesh these Institutions are providing services like identification of suitable schemes, preparation of project report, arrangement for providing required plant and machineries and raw-material for entrepreneurs and marketing opportunities. The DICs and sub-dics assists the entrepreneurs to avail themselves a series of packages, incentives and facilities provided by both Central and State Govt. towards the rapid industrialization in the State. The DICs and Sub-DICs are not only acting as a coordinating agency but also maintaining close liaison with all Development Department and Financial Institutions in providing various assistances to the prospective entrepreneurs. There are two Industrial Training Institutes and one Rural Industries Development Centre that are functioning in the State technical manpower in the State. Besides, these Institutes are also helping the local youth to generate selfemployment. DIC schemes for Small Scale Industries Any rural service and cottage industry is eligible to get the benefit under the scheme Institute for Integrated Rural Development- IIRD, Shimla 46

47 2 Soft loan from D.I.C for general categories 20% upto Rs.40,000/- and 30% for the SC/ST category upto Rs.60,000/- against the project cost approved by the Financial Institutions. The value of Plant & Machinery should not be more than Rs.2.lakhs.Soft loan is 4% interest p.a. Role of National Bank for Agriculture and Rural Development (NABARD) The bank came into existence on 12 July 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC). NABARD was dedicated to the service of the nation by the late Prime Minister Smt. Indira Gandhi on 05 November The National Bank for Agriculture and Rural Development (NABARD) was set up in July It became the apex institution to play a pivotal role in the sphere of policy planning and providing refinance facilities to rural financial institutions and for augmenting their resource base. 1. Main functions of NABARD Main functions of NABARD are given as under Providing finance and also refinance for production and marketing in the rural areas. Coordinating and advising the operations of institutions engaged in rural credit. Promoting research in agriculture and rural development. Promotion of kissan credit cards and swarozgar credit card loan products. 2. Schemes of NABARD i) Rupay Kissan Credit Card - The Kisan Credit Card (KCC) has emerged as an innovative credit delivery mechanism to meet the production credit requirements of the farmers in a timely and hassle-free manner. As per the revised guidelines for KCC, the KCC should be a smart card cum debit card which could be used in the ATMs/Hand held Swipe Machines etc. RuPay is a new card payment scheme launched by the National Payments Corporation of India (NPCI), has been conceived to fulfill RBI s vision to offer a domestic, open-loop, multilateral system which will allow all Indian banks and financial institutions in India to Institute for Integrated Rural Development- IIRD, Shimla 47

48 participate in electronic payments. RuPay has come out with its RuPay KCC offering which leverages the benefits of both KCC and RuPay. ii) Adivasi Development Programmes(ADP) - NABARD has been closely associated with tribal development through concessional rates of refinance, general line of credit for tribal development agencies such as Girijan Cooperative Corporation, and sustainable livelihoods through orchard based farming systems. As an integral component of NABARD s Natural Resource Management policy of providing sustainable livelihoods, NABARD laid special emphasis on providing support for holistic development of tribal communities with orchard cultivation as the core element. The implementation of comprehensive Adivasi Development Programmes (ADP) in Gujarat since 1995 and in Maharashtra since 2000 had provided several insights for NABARD in framing strategies for holistic development of tribal regions. The Adivasi Devlopment Programmes were externally supported by German bank, KfW who have chosen NABARD as Indian partner. The programme implementation at ground level has been taken up by BAIF, one of the renowned nongovernmental organization in natural resource management sector. The central focus of ADPs is wadi (small orchard) together with suitable soil conservation, water resource development measures and other measures for improving the quality of tribal life such as community health & sanitation, women development, institutional development, etc. The wadi model of tribal development has been acclaimed worldwide as a sustainable and replicable model for poverty alleviation. iii) Dairy entrepreneur development scheme - Dairy Entrepreneurship Development Scheme (DEDS) has come into effect from 1 September Some features of this scheme are as under: Small dairy farms cross bred cows, graded buffaloes (upto 10 animals) Rs 5 lakh Vermicompost (with milch animals unit) Heifer calf rearing upto 20 calves Rs 4.80 lakh Purchase of milking machines/milk testers/dulk milk coolers (upto lr capacity) Rs 18 lakh Indigenous milk product manufacturing units upto Rs 12 lakh. Dairy product transport facilities and cold chain Rs 24 lakh. Institute for Integrated Rural Development- IIRD, Shimla 48

49 Cold storage for milk/milk products Rs 30 lakh Private veterinary clinic Rs 2.4 lakh Dairy parlour Rs iv) Production Units Of Bio-fertilizers - Under the scheme, each unit of Bio-fertilizers Biopesticides will be provided with a 25% of the capital cost of the project subject to a ceiling of Rs.40 lakh and each unit of fruit and vegetable waste compost production unit will be provided with a 33% of the capital cost of the project subject to a ceiling of Rs.60 lakh. The remaining cost will be met through term loan from banks and margin money. The subsidy will be credit linked and back ended. Institute for Integrated Rural Development- IIRD, Shimla 49

50 SECTION 2 Role of Krishi Vigyan Kendra (KVK) A large number of appropriate farm technologies have been developed at the research stations. But only a few of them have been adopted at the farm level. It is more so with the small and marginal farmers. It is essential to see the so developed technology should reach grass root level farmers for whom it was developed. For this purpose mainly the KVK were established. 1. Functions of KVK The main objective of the KVK is to provide a strong training support for bringing about production breakthrough in agriculture. The specific objectives are as follows: i. Planning and conducting Survey of the operational area to prepare a resource inventory with special reference to identify the training needs of the farming community. ii. Compile all the relevant information regarding recommendations/packages of practices for the district to be meaningfully utilized in the training courses, and the follow up of extension programmes. iii. Plan and conduct production-oriented, need based short and long duration training programme, both on the campus, as well as in the villages for various targeted groups with priority on the weaker and poorer sections. iv. Organize farm science clubs, both in rural schools, and in villages to encourage the younger generation, a liking for and an interest in agricultural and allied sciences and for scientific farming through supervised projects. To develop and maintain the campus farms and demonstration units on scientific lines, as the facilities for providing work-experience to the trainees as also dissemination of latest technical knowledge. v. Provide practical training facilities of the Kendras to the teachers and the students of vocational agriculture of higher secondary schools. vi. Imparts some general education to rural illiterates and school dropouts, in order to make them good farmers and better citizens. Institute for Integrated Rural Development- IIRD, Shimla 50

51 vii. Provided training facilities in home-making and nutrition education for rural community and extending to other important areas such as home crafts and cottage industries related to the rural development. The three fundamental principles of the KVK are (i) agricultural production as the prime goal, (ii) workexperience as the main method of imparting training (iii) Priority to weaker sections of the society, are the backbone. Need based training courses are designed, for different types of farmers. Courses are based on the information received through family and village survey. No certificate or diploma is awarded irrespective of the duration of the courses. After the training, follow-up extension programmes are organized for converting the acquired skills of the trainees into practice. While designing the courses, the concept of farming system is taken into account to make the enterprises commercially viable. The training starts from farmers production units such as fields, farms, dairy units, poultry units, sheep units, goat units, pig units, workshop etc. and terminates in discussion assembly. The training programmes takes into account all the methods and means which will result in skill development in trainees in the areas of their interest. It can be informal, formal or non- formal or a combination of all three, depending upon the needs and resources of the farmers. Table. List of KVK in Arunachal Pradesh Sr. No. Address of KVKs Host Organization 1. Krishi Vigyan Kendra, Distt. Lohit Director, NRC on Yak, Dirang, West Kameng District, Arunachal Pradesh 2. Krishi Vigyan Kendra, Distt. Upper Subansiri 3. Krishi Vigyan Kendra, Jachhapa, (Yachuli), Distt. Lower Subansiri 4. Krishi Vigyan Kendra, Karsingsa Animal Husbandry Farm, Distt. Papumpare 5. Krishi Vigyan Kendra, Korak (Geku township) Distt. Upper Siang 6. Krishi Vigyan Kendra, Pampoli, PO. Seppa, Distt. East Kameng Director, Directorate of Agriculture, Govt. of Arunachal Pradesh Naharlagun , Itanagar Director, Directorate of Agriculture, Govt. of Arunachal Pradesh, Naharlagun , Itanagar Director, Department of Animal Husbandry and Veterinary, Govt. of Arunachal Pradesh, Nirjuli, Naharlagun , Itanagar. Director, Directorate of Agriculture, Govt. of Arunachal Pradesh, Naharlagun , Itanagar. Director, Department of Agriculture, Govt. of Arunachal Pradesh, Naharlagun , Itanagar. 7. Krishi Vigyan Kendra, Distt. Tawang Director, Directorate of Agriculture, Govt. of Arunachal Pradesh, Naharlagun , Itanagar Institute for Integrated Rural Development- IIRD, Shimla 51

52 8. Krishi Vigyan Kendra, College of Horticulture & Forestry, CAU, PasighAt , Distt. East Siang 9. Krishi Vigyan Kendra, Dirang, Distt. West Kameng 10. Krishi Vigyan Kendra, Tirap, PO.Deomali, Distt. Tirap , 11. Krishi Vigyan Kendra, Distt. Agril. Officer, Roing, Distt. Lower Dibang Valley 12. Krishi Vigyan Kendra, Basar, Distt. West Siang Krishi Vigyan Kendra Jairampur, Distt.- Changlang (Arunachal Pradesh) Vice-Chancellor, Central Agricultural University, Imphal Director, Directorate of Agriculture, Govt. of Arunachal Pradesh, Naharlagun , Itanagar Director, Directorate of Agriculture, Govt. of Arunachal Pradesh, Naharlagun , Itanagar Director, Directorate of Agriculture, Govt. of Arunachal Pradesh, Naharlagun (Arunachal Pradesh) Director, ICAR Complex for NEH Region, Umroi Road, Barapani Meghalaya Director of Agriculture, Department of Agriculture, Govt. of Arunachal Pradesh, Naharlagun National Small Industries Corporation (NSIC) National Small Industries Corporation Ltd. (NSIC), is an ISO certified Government of India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME). NSIC has been working to fulfill its mission of promoting, aiding and fostering the growth of small industries and industry related micro, small and medium enterprises in the country. NSIC operates through countrywide network of offices and Technical Centres in the Country. NSIC carries forward its mission to assist small enterprises with a set of specially tailored schemes designed to put them in a competitive and advantageous position. The schemes consist of facilitating marketing support, credit support, technology support and other support services. 1. Functions of NSIC NSIC acts as a facilitator to promote small industries products and has devised a number of schemes to support small enterprises in their marketing efforts, both in an outside the country. These schemes are briefly described as under: a. Consortia and Tender Marketing: Small Enterprises in their individual capacity face problems to procure & execute large orders, which inhibit and restrict their growth. NSIC, accordingly Institute for Integrated Rural Development- IIRD, Shimla 52

53 adopts Consortia approach and forms consortia of units manufacturing the same products, thereby easing out marketing problems of SSIs. b. Single point Registration for Government Purchase: NSIC operates a single Point Registration Scheme under the Government Purchase Programme, wherein the registered SSI units get purchase preference in Government purchase programme, exemption from payment of Earnest Money Deposit etc. Issue of the Tender Sets free of cost; Exemption from payment of Earnest Money Deposit (EMD), In tender participating MSEs quoting price within price band of L1+15 per cent shall also be allowed to supply a portion upto 20% of requirement by bringing down their price to L1 Price where L1 is non MSEs. c. NSIC Infomediary is a Business-to-Business (B2B) Portal that has been established to give online services for small and medium time importers, exporters and service providers in India. d. To showcase the competencies of Indian SSIs and to capture market opportunities, NSIC participates in select International and National Exhibitions and Trade Fairs every year. NSIC facilitates the participation of the small enterprises by providing concessions in rental etc. Participation in these events exposes SSI units to international practices and enhances their business prowess. e. Bulk and departmental buyers such as the Railways, Defense, Communication departments and large companies are invited to participate in buyer-seller meets to enrich small enterprises knowledge regarding terms and conditions, quality standards, etc required by the buyer. f. NSIC's Raw Material Assistance Scheme aims at helping Small Enterprises by way of financing the purchase of Raw Material (both indigenous & imported). The salient features are Financial Assistance for procurement of Raw Materials upto 90 days. Bulk purchase of basic raw materials at competitive rates. NSIC facilitates import of scares raw materials. g. NSIC takes care of all the procedures, documentation & issue of letter of credit in case of imports. Institute for Integrated Rural Development- IIRD, Shimla 53

54 h. In order to ensure smooth credit flow to small enterprises, NSIC is entering into strategic alliances with commercial banks to facilitate long term / working capital financing of the small enterprises across the country. i. NSIC offers small enterprises the following support services through its Technical Services Centres and Extension Centres. Advise on application of new techniques Material testing facilities through accredited laboratories Product design including CAD Common facility support in machining, EDM, CNC, etc. Energy and environment services at selected centres Classroom and practical training for skill upgadation j. Incubation of unemployed youth for setting up of New Micro & Small enterprises This programme facilitates setting up of new enterprises all over the country by creating selfemployment opportunities for the unemployed persons. The objective of this scheme is to facilitate establishment of new small enterprises by way of providing integrated services in the areas of training for entrepreneurial skill development, selection of small projects, preparation of project profiles/reports, identification and sourcing of plant, machinery and equipments, facilitating sanction of credit facility and providing other support services in order to boost the development of small enterprises in manufacturing and services sectors. k. Bill discounting scheme- The Scheme covers purchase / discounting of bills arising out of genuine trade transactions i.e. purchase of supplies made by small scale units to reputed Public Limited Companies / State and Central Govt. Departments / Undertakings. Ministry of Small and Medium Enterprise (MSME) The Ministry of Micro, Small and Medium Enterprises, a branch of the Government of India, is the apex body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. The MSMEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial production and exports. In India too, the MSMEs play a pivotal role in the overall industrial economy of the country. In recent years the MSME sector has consistently registered Institute for Integrated Rural Development- IIRD, Shimla 54

55 higher growth rate compared to the overall industrial sector. With its agility and dynamism, the sector has shown admirable innovativeness and adaptability to survive the recent economic downturn and recession. In India, the enterprises have been classified broadly into two categories: Manufacturing; and Those engaged in providing/rendering of services. Both categories of enterprises have been further classified into micro, small and medium enterprises based on their investment in plant and machinery (for manufacturing enterprises) or on equipments (in case of enterprises providing or rendering services). The present ceiling on investment to be classified as micro, small or medium enterprises is as under: Investment Ceiling for Plant, Machinery or Category Manufacturing Enterprises Service Enterprises Micro Up to Rs.25 lakh ($50 thousand) Small Above Rs.25 lakh ($50 thousand) Medium Above Rs.5 crore ($1 million) up to Rs.10 crore ($2 million) Up to Rs.10 lakh ($20 thousand) Above Rs.10 lakh ($20 thousand) & up to Rs.2 crore ($0.40 million) Above Rs.2 crore ($0.40 million) up to Rs.5 crore ($1 million) 1. Role and Functions of MSME i. Fee-based consultancy services and training in the following areas: Capacity Building of Entrepreneurs and Technical Manpower of SMEs; Policy & Institutional Framework for SME Promotion, Development and Enhancing Competitiveness; Entrepreneurship Development; Business Development Services. ii. Establishment of Turnkey Projects for setting up manufacturing MSMEs on commercial terms. iii. Skill upgradation programmes in selected areas such as CNC Machining, Sheet-Metal Technologies, CAD & Institute for Integrated Rural Development- IIRD, Shimla 55

56 iv. CAM Designing, Wool Processing & Weaving, Leather Technology, Plastic Technology, Wood Working, etc. v. Conducting surveys and studies to identify the tooling and related skill requirements in specific areas or regions like hilly/backward/indigenous. vi. Providing turnkey assistance to set up Tool Rooms & Training Centres. vii. Providing consultancy to existing manufacturing SME in upgrading their production facilities, selection of machine tools, design consultancy for tools, moulds, dies, jigs & fixtures, etc. viii. Providing specialized/tailor-made training courses for specific target groups. ix. Providing consultancy to existing training institutes in course design and curriculum development including trainers training programmes. x. Assistance in product design, tool design and manufacturing of intricate toolings. xi. High precision tools, moulds, dies, jigs & fixtures etc. as per design/specifications of local industry. xii. Product development & rapid prototyping services. 2. Schemes of MSME Some of the important schemes of MSME are given as under - i. Micro & Small Enterprise Cluster Development Programme (MSE-CDP) The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI) has adopted the cluster development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. Clustering of units also enables providers of various services to them, including banks and credit agencies, to provide their services more economically, thus reducing costs and improving the availability of services for these enterprises. ii. Credit Linked Capital Subsidy Scheme For Technology Upgradation (CLCSS)-The Scheme was launched in October, 2000 and revised w.e.f The revised scheme aims at facilitating Technology Upgradation of Micro and Small Enterprises by providing 15% capital subsidy (12% prior to 2005) on institutional finance availed by them for induction of well established and improved technology in approved sub-sectors/products. The admissible capital Institute for Integrated Rural Development- IIRD, Shimla 56

57 subsidy under the revised scheme is calculated with reference to purchase price of Plant and Machinery. Maximum limit of eligible loan for calculation of subsidy under the revised scheme has also been raised from Rs. 40 lakhs to Rs. 100 lakh w.e.f iii. Rajiv Gandhi Udyami Mitra Yojna (RGUMY) The objectives of Rajiv Gandhi Udyami Mitra Yojna (GGUMY) is to provide handholding support and assistance to the potential first generation entrepreneurs, who have already successfully completed EDP/SDP/EDSP or vocational trainings from it, through the selected lead agency i.e. Udyami Mitras in the establishment and management of the new enterprise, in dealing with procedural and legal hurdles and in completion of various formalities required for setting up and running of the enterprise. Institute for Integrated Rural Development- IIRD, Shimla 57

58 SECTION 3 Section-3 and 4 was conducted by Ms. Sunita Singh, IIRD- Shimla Ministry of Food Processing Industries (MoFPI) The Ministry of Food Processing Industries is concerned with formulation and implementation of the policies & plans for the food processing industries within the overall national priorities and objectives. A strong and dynamic food processing sector plays a vital role in reduction in the wastage of perishable agricultural produce, enhancing shelf life of food products, ensuring value addition to agricultural produce, diversification &commercialization of agriculture, generation of employment, enhancing income of farmers and creating surplus for the export of agro & processed foods. In the era of economic liberalization, all segments including; private, public and co-operative sectors have defined roles to play and the Ministry promotes their active participation. 1. Role of MOFPI The Ministry of Food Processing Industries, the Nodal Ministry of the Government of India for the sector has a clear goal of attaining these objectives by facilitating and acting as a catalyst to attract quality investments from within India and abroad into this sector with the aim of making food processing a national initiative. With this overall objective, the Ministry aims at: Better utilization and value addition of agricultural produce for enhancement of income of farmers; Minimizing wastage at all stages in the food processing chain by the development of infrastructure for storage, transportation and processing of agro-food produce; Induction of modern technology into the food processing industries from both domestic and external sources; Encourage R&D in food processing for product and process development and improved packaging; Provide policy support, and support for creation of Infrastructure, capacity expansion/ Upgradation and other supportive measures form the growth of this sectors; Promote export of processed food products. Institute for Integrated Rural Development- IIRD, Shimla 58

59 2. Schemes of MoFPI Ministry of food processing has launched several schemes to promote and encourage the new and old entrepreneurs in the field of food processing. Some of the schemes are listed below:- i. Mega food park The scheme aims to facilitate the establishment of a strong food processing industry backed by an efficient supply chain, which includes collection centres, Primary Processing Centers (PPC), Central Processing Center (CPC) and cold chain infrastructure. The CPC have need based common infrastructure required for processing, packaging, environmental protection systems, quality control labs, trade facilitation centres, etc. The extent of land required for establishing the CPC is estimated to be between acres, though the actual requirement of land would depend upon the business plan, which may vary from region to region. CPC is supported by farm proximate to Primary Processing Centers (PPC) and Collection Centres (CCs) in identified locations based on a techno-feasibility study, adequate to meet the requirements of the CPC. The land required for setting up of PPCs and CCs at various locations is in addition to land required for setting up CPC. It is expected that on an average, each project will have around Food Processing Units with a collective investment of Rs 250 crore that would eventually lead to annual turnover of about Rs crore and creation of direct and indirect employment to about 30,000 persons. The aggregate investment in CPC, PPCs and CCs should be proportionate and commensurate to the size of the total project keeping in view the economies of scale. Pattern of assistance - The scheme envisages a onetime capital grant of 50% of the project cost (excluding land cost) subject to a maximum of Rs. 50 crore in general areas and 75% of the project cost (excluding land cost)subject to a ceiling of Rs. 50 crore in difficult and hilly areas i.e. North East Region including Sikkim, J&K, Himachal Pradesh, Uttarakhand and ITDP notified areas of the States. ii) Scheme for cold chain The objective of the scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities without any break from the farm gate to the consumer. It covers pre-cooling facilities at production sites, reefer vans, mobile cooling units as well as value addition centres which includes infrastructural facilities like Processing/ Multi-line Processing/ Collection Centres, etc. for horticulture, organic produce, marine, dairy, meat and poultry etc. Individual or group of entrepreneurs can set up integrated cold chain and preservation infrastructure with business interest in cold chain solutions. It can also be set up by those who manage supply chain enabling inking groups of producers to the processors and market through well-equipped supply chain and cold chain. Institute for Integrated Rural Development- IIRD, Shimla 59

60 Pattern of assistance - Financial assistance(grant-in-aid) of 50% the total cost of plant and machinery and technical civil works in General areas and 75% for NE region including Sikkim and difficult areas (J&K, Himachal Pradesh and Uttarakhand) subject to a maximum of Rs.10 crore. iii) Scheme of abattoirs The Ministry of Food Processing Industries (MOFPI) has launched the scheme of Setting up of New/ Modernization of existing Abattoirs with a view to ensure scientific, hygienic slaughtering of the animals and supply of quality meat and meat products. The scheme will be implemented preferably under PPP mode with the involvement of local bodies (Municipal Corporations and Panchayats)/ Public Sector Undertakings/ Co-operatives/ Boards under Government and will have flexibility for involvement of private investors/ exporters on a Build-Operate-Own (BOO)/ Build-Operate-Transfer(BOT)/ Joint Venture (JV) basis. Regulatory functions will continue to be discharged by the local bodies. The salient features of the scheme are as under: Scientific and hygienic slaughtering of animals; Application of modern technology for slaughter waste management and pollution control; Humane treatment of animals/ minimizing transportation of animals Better-by- product utilization/ value addition Provision of chilling facility to prevent microbial activity in slaughtered animals Better hygiene, safety and retail cold chain management;(vii) Better forward linkage facilities for finished meat & meat products. Pattern of assistance- The scheme envisages a grant of 50% of the cost of plant and machinery and technical civil work and other eligible items subject to a maximum of Rs Crores in general areas and 75% of the cost of plant and machinery and technical civil work and other eligible items subject to a maximum of Rs Crores in difficult areas (NE states including Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarakhand and Integrated Tribal Development [ITDP] notified areas of the States) per abattoir. iv) Scheme of R&D, quality assurance and promotional activity Quality and Food Safety have become competitive edge in the global market for the enterprises producing and marketing foods products. For a successful food processing sector in the country, various aspect of Total Quality Management (TQM) such as quality control, quality system and quality assurance should function in a horizontal fashion for total success. Further, in the processed Food Institute for Integrated Rural Development- IIRD, Shimla 60

61 Sector, R & D is an important area where focused attention is required as it is related to improvement of production, quality, consumer safety and public health. There is need for R&D for development and upgradation of products, processes and technologies in the processed food sector. The Scheme has the following components: Setting up/up gradation of quality control/ food testing laboratory Implementation of HACCPA/ ISO 22000, ISO 14000/GHP/GMP Etc Research & development in the food processing sector Promotional activities. v) Setting up/up gradation of quality control/ food testing laboratory The Scheme for setting up/up-gradation of food testing laboratories would benefit all stake holders including domestic industry (Domestic and exports), entrepreneurs, small and medium enterprises, food standards setting bodies and Government. The other objectives of the scheme are: To analyse the samples received from food processing industries and others stake holders. To reduce the time of analysis of samples by reducing transportation time of samples. To ensure compliance of standards in case of exports as well as imports. To establish a surveillance system for monitoring the quality and composition of food. Pattern of assistance - Central/State Government and its organizations/ Universities (including deemed universities) are eligible for grant-in-aid of entire cost of laboratory equipments required for labs and 25%of the cost of technical civil works to house the equipments and furniture and the fixtures associated with the equipments for general areas and 33% for difficult areas (J&K, Himachal Pradesh, Uttaranchal, Sikkim, North-Eastern States, Andaman & Nicobar Islands, Lakshadweep, Integrated Tribal Development Projects (ITDP) area. Eligibility - All other implementing agencies/private sector organizations are eligible for grant-in-aid of 50% of cost of laboratory equipments and 25% of the cost of technical civil works to house the equipments and furniture and fixtures associated with the equipment for general areas and 70% of cost of lab equipment and 33% of technical civil works for difficult areas. Agency (PMA) engaged for providing advisory and implementation services to Food testing/quality Control Laboratories and follow up actions. Institute for Integrated Rural Development- IIRD, Shimla 61

62 vi) Implementation of HACCP/ ISO 22000, ISO 14000/GHP/GMP Etc HACCP, ISO Standards are necessary condition for improving the overall quality of food safety & hygiene in the country and also to increase India's share in global food trade. This component of quality assurance is intended to benefit stakeholders, including domestic industry, small and medium enterprises, exporters, importers of food products, food standards setting bodies and Government. Pattern of assistance - Under this component, assistance in the form of re-imbursement of expenditure is provided to Central/ State Government Organizations, IITs and Universities and private sector units to the extent of 50%of the cost of consultant fee, fee charged by Certification Agency, plant and machinery, technical civil works and other expenditure towards implementation of Total Quality Management System including ISO 14000, ISO 22000, HACCP, GMP & GHP in general areas subject to maximum limit of Rs. 15 lakh and 75% in difficult areas subject to a maximum of Rs. 20 lakh. vii) Research & development in the food processing sector The main objective of the Scheme is the development of new products and new cost effective technologies for preservation and packaging of food products, standardization of various factors such as additives, coloring agents, preservatives, pesticide residue etc. All Universities, IITs, Central/State Government Institutions, Public and Private Funded Organizations and CSIR recognized R&D units in private sector. Pattern of assistance - For Private Organizations, grant to the tune of 50% of equipment cost in general areas and 70% in the difficult areas ( J&K, Himachal Pradesh, Uttaranchal, Sikkim, North-Eastern States, Andaman & Nicobar Islands, Lakshadweep and Integrated Tribal Development Projects (ITDP) area. viii) Promotional activities The promotional activities of the Ministry are aimed at generating awareness about food processing sector, its growth potential and attractiveness of this sector as an investment destination. Under the scheme, financial assistance is provided for organizing Seminars/Workshops, Studies / Surveys, Exhibitions/Fairs and Study Tours. Scheme also provides for participation of the Ministry in National/International exhibitions/fairs to disseminate information regarding food processing industries, familiarizing the entrepreneurs in modern technologies of production and packaging, development of market and popularization of products as well as attracting investments into the sector etc. Government/Academic Bodies, Industry Associations, NGOs, Cooperatives and other private agencies etc. are eligible to seek assistance under the scheme. Institute for Integrated Rural Development- IIRD, Shimla 62

63 Pattern of assistance - Under the scheme, financial assistance is provided up-to 50% of the total cost subject to a maximum of Rs.3.00 lakhs for organizing seminar/workshop and conducting studies/surveys etc. When the Ministry sponsors or commissions such events, the financial ceiling does not apply. Depending upon the merit, the Ministry also provides financial assistance for organizing exhibitions/ fairs and/ or participates in national/ international exhibitions/fairs on its own or in close association with APEDA, CFTRI, Industry Associations etc. Institute for Integrated Rural Development- IIRD, Shimla 63

64 SECTION 4 National Mission on Food Processing (NMFP)- A centrally sponsored scheme of MoFPI Ministry of Food Processing Industries (MOFPI) launched a new Centrally Sponsored Scheme (CSS) - NMFP on April 1, 2012 for implementation through State/ UT Governments. With the commissioning of NMFP, a number of scheme which were implemented by MOFPI during XI Plan period were subsumed with the Mission. The NMFP envisages establishment of a National Mission as well as corresponding Missions in the State and District level. The basic objective of NMFP is decentralization of implementation of food processing related schemes for ensuring substantial participation of State/ UT Governments. 1. Objectives of NMFP To promote facilities for post-harvest operations including setting up of food processing industries; To undertake decentralization in the implementation of the schemes so far implemented by the MOFPI in order to take into account the requirements suitable to the local needs; To augment the capacity of food processors working to upscale their operations through capital infusion, technology transfer, skill upgradation and handholding support; To support established self-help groups working in food processing sector to facilitate them to achieve SME status; Capacity development and skill upgradation through institutional training to ensure sustainable employment opportunities to the people and also to reduce the gap in requirement and availability of skilled manpower in food processing sector; To raise the standards of food safety and hygiene in order to meet the norms setup by FSSAI; To facilitate food processing industries to adopt HACCP and ISO certification norms; To augment farm gate infrastructure, supply chain logistics, storage and processing capacity; To provide better support system to organized food processing sector. 2. Schemes of NMFP The major programmes/schemes to be implemented under NMFP are given as under Institute for Integrated Rural Development- IIRD, Shimla 64

65 Scheme for technology up-gradation/ establishment/modernization of food processing industries Scheme for cold chain, value addition and preservation infrastructure for non-horticulture products Setting up/ modernization/ expansion of abboiters Scheme of human resource development (HRD). a. Creation of infrastructure facility for running degree/diploma/certificate courses in food processing technology b. Entrepreneurship development program (EDP) c. Food processing training centres (FPTC) d. Training at recognized institutes and sensitization cum awareness programme. Scheme for promotional activities:- a. Organizing seminar/workshops. b. Conducting studies/surveys. c. Support to exhibition/fairs. d. Advertisement 7 publicity. Scheme for creating primary processing processing centres / collection centre in rural areas Modernization of meat shops Reefer vehicles i) Scheme for technology up-gradation/ establishment/modernization of food processing industries The main objective of the scheme is to increase the level of processing, reduction of wastage, value addition, enhance the income of farmers as well as increase exports thereby resulting in overall development of food processing sector. The scheme envisages to extend the financial assistance for establishment of new food processing units as well as Technology Up gradation and Expansion of existing units in the country. Eligibility - All implementing agencies / organizations such as Govt. / PSUs / Joint Ventures / NGOs / Cooperatives / SHG s / Private Sector / individuals engaged in establishment / up-gradation/ modernization of food processing units would be eligible for financial assistance under the scheme. Pattern of assistance - The scheme envisages financial assistance to food processing units in the form of grant-in-aid : Institute for Integrated Rural Development- IIRD, Shimla 65

66 25% of the cost of Plant & machinery and technical civil works, subject to a maximum of Rs. 50 lakhs in general areas 33.33% of the cost of Plant & machinery and technical civil works, subject to a maximum of Rs. 75 lakhs in difficult areas(i.e. Jammu & Kashmir, Himachal Pradesh, Uttarakhand, Andaman & Nicobar Islands and Lakshadweep) and Integrated Tribal Development Project (ITDP) areas. 50% of the cost of Plant & machinery and technical civil works, subject to a maximum of Rs.100 lakhs for North Eastern States including Sikkim. Procedure for application - Applicants seeking financial assistance are required to submit their applications to the designated authority / State Mission Directorate of NMFP. Applicants must submit their applications at least 2 months before the date of start of Commercial production in prescribed format along with the enclosures / documents. ii) Scheme of Cold Chain, Value Addition and Preservation Infrastructure (for nonhorticultural products) The objective of the scheme is to provide integrated and complete cold chain and preservation infrastructure facilities from the farm gate to the consumer or from the production site to the market. Precooling facilities at production sites, reefer vans, and mobile cooling can be assisted under the Scheme. This Scheme may also help to link groups of producers to the processors and markets through wellequipped supply chain. Eligible sectors following sectors may be covered under this scheme: Dairy all milk and milk products etc Meat all meat and meat products etc Aquaculture and marine products like prawns, seafood, fish and their processed products etc Any other non-horticultural food products requiring integrated cold chain. Eligibility This scheme is mainly for individuals or groups of entrepreneurs interested in supply chain management, organization such as PSUs/Govt./ joint ventures/ngos/ cooperatives/ SHGs etc. the applicant should have sound financial back ground. The net worth of the applicants should be more than 1.5 times of the grant applied for. iii) Guidelines for implementation of human resources development scheme Institute for Integrated Rural Development- IIRD, Shimla 66

67 The Scheme for Human Resources Development aims at augmenting the supply of trained manpower/personnel at all levels for food processing sector namely entrepreneurs, managers, sales persons, floor workers etc. The scheme comprises of the following four components: a) Creation of Infrastructure facilities for running Degree / Diploma Course in food processing technology To cater to the growing need of the food processing industries for trained manpower (including entrepreneurs, managers, technologists, skilled workers) and also keep abreast with latest technology & diversification and new ways of managing and marketing to face global competition. Eligibility All recognizeduniversities/institutions/colleges,whetheringovt.sector or private sector, will be eligible for grant-in-aid. Duly recognized B.Tech / M.Tech Degree in Food Technology or Food Processing or Food Science or Management in Food technology or Food safety/ 3yearsB.Sc. /2yearsMSc.Food Technology or Food Processing or Food Science or Management in Food technology or Food safety/1year postgraduate diploma or 1year Diploma course in Food Technology / Food Processing/ Food Science or Management in Food technology or Food safety and UG/PG programmes in Dairy products Processing Technology, Meat processing Technology and Fisheries processing Technology will be eligible for financial assistance for starting the course as well as for up-gradation of existing infrastructure facilities for above courses. Pattern of assistance - MaximumeligibleamountofRs.100Lakhs. To be released in two equal installments of 50% each. The assistance will be for pilot plants, laboratory equipments required as per the syllabus of the proposed course, technical/ academic books/journals including online publications etc. Procedure for application - The applications have to be submitted to designated State Mission Directorate set up under National Mission on Food Processing (NMFP), in prescribed format, with complete details of project indicating cost of land, building, equipments and recurring expenditure, copy of quotations for equipments and duly forwarded by Vice Chancellor/ Registrar of University or Director of Institution/ Organization. b) Entrepreneurship development programs The objectives of the Entrepreneurship Development programme is to enable trainees to establish commercially viable enterprises in Agri. and Horti. based food processing : Eligibility Following organizations are eligible for this EDP programmes - Institute for Integrated Rural Development- IIRD, Shimla 67

68 Central/State Govt. organizations, Institutions, Universities etc. National level Institutes like EDII, NIFTEM, IICPT, CFTRI etc. Professional Institutes for Entrepreneurship Development. State Level Consultancy Organizations formed by State Govt./financial institutions. Industry Organizations/Associations Reputed Non-Government Organizations including self-help groups with professional competency & experience in organizing EDPs. Such organizations compulsorily to have a minimum of revenue/ income of Rs lakhs (other than Grants/ donations). Procedure for application - The applicant organization seeking financial assistance are required to submit their applications to the designated officer/ Mission Director of NMFP in State as may be decided by SLEC. The applicant may submit the application in prescribed format along with all the enclosures/ documents to the designated authority as may be specified by the respective State/UT. c) Food processing training centres Development of Rural Entrepreneurship and transfer of technology for processing of food products by utilizing locally grown raw material and providing Hands-on experience at such production cum training centres, while according priority to SC/ST/OBC/women and minority candidates. Eligibility Central or State Government Organizations, Educational & Training institutions, Schools and Colleges, ITIs, NGOs, Co-operatives and Self-help groups (SHGs)will be eligible for grant to setup FPTC. Pattern of assistance - Grants-in-aid would be available to the FPTCs only to the following extent Single product line centre (for any group of processing activities) Multi product line centre (for more than one group of processing activities) Rs 6 lakh for fixed capital cost and Rs 3 lakh as revolving seed capital Rs 15 lakhs for fixed capital cost and Rs 5 lakhs as revolving seed capital Procedure for application - Applications have to be submitted in the prescribed format with complete details of the project indicating cost of land, building, equipments and recurring expenditure, copy of quotation for equipments, to the Competent Authority of the State/ UT Govt. Organizations may seek Institute for Integrated Rural Development- IIRD, Shimla 68

69 assistance for single or multiproduct line FPTC. While submitting applications the following documents may have to be enclosed. d) Training at recognized institutes such as CFTRI /DFRL/IICPT/NIFTEM any other reputed State/National level training institute of GOI/ State Govt. This scheme has following objectives - To impart specialized training to EDP trainees who are in the advanced stage of setting up their own food processing units including higher levels of training after periodic intervals. To upgrade the knowledge/ skill level of entrepreneurs who are already running their Food Processing units but are desirous to expand/modernize their unit. Eligibility Grant will be provided to the State/ National level recognized training institutions or any other reputed State/ National level institutions selected by State Mission Directorate of NMFP for such training programme. Submission of application - The applicant organization seeking financial assistance are required to submit their applications to the designated officer/ Mission Director of NMFP in the State. The applicant may submit the application in prescribed format along with all the enclosures/ documents to the designated authority as may be specified by the respective State/UT. Pattern of assistance The quantum of assistance will vary with the number of trainees and duration of training subject to a maximum of Rs.1,00,000 per training programme for 20 trainees for 10 working days or Maximum Rs. 5,000 per trainee for the specialized training programmes in food processing. iv) Guidelines for implementation of scheme of promotional activities The scheme of promotional activities aims at development of the Food processing sector by creating awareness, disseminate information regarding food processing industries, familiarizing the existing and prospective entrepreneurs with modern techniques of production and packaging, development of market and popularisation of products, attracting investments and participation in National exhibitions / fairs. The scheme also aims at assessing food processing potential as well as impact of the scheme /policies etc. and exposure of the sector through study tours. The scheme has the following four components: a) Seminars / Workshops. b) Studies / Surveys. c) Exhibitions/Fairs. Institute for Integrated Rural Development- IIRD, Shimla 69

70 d) Study tours a) Seminars / workshops The main objectives of this scheme are as under - To create awareness. To disseminate information. To attract investments. And, focus attention on the development of Food Processing Industries Eligibility -Government/Autonomous/Statutory Bodies/ Academic Institutions/Bodies, Cooperative Societies, Industry Associations, Private Bodies, SHGs, NGOs etc., are eligible to seek assistance for organizing conference/seminars/workshops etc. The event must benefit the food processing sector in the State. Pattern of assistance - For organizing the conferences/seminars/ workshops, applicants will be eligible for a financial assistance up to 50% of the cost, subject to a maximum of Rs lakhs. When the State Mission Directorate of NMFP sponsors/co-sponsors such events, there would be no financial ceilings. Procedure for application - Applicants may apply for organizing Conferences/Seminars/Workshops with required/necessary documents as per prescribed format to the State Mission Directorate of NMFP normally 3 months in advance from the date of the event. b) Studies / Surveys/ Feasibility Reports main objectives of this scheme are as under To provide financial assistance for conducting studies/ surveys or preparation of feasibility reports/ Detailed Project Reports (DPR) relating to food processing sector. To commission/conduct studies/surveys to address food processing potential in the State. To conduct evaluation/impact study of food processing related schemes/ policies of the State. To assess the losses/wastage of various crops (including fruits & vegetables) post-harvest including supply chain. Eligibility - Government/ Autonomous/ Statutory Bodies/ Academic Institutions/ Bodies, Cooperative Societies, Industry Associations, Private Bodies, SHGs, NGOs etc., are eligible to seek assistance for conducting studies/surveys/feasibility reports/ DPR etc. The studies/surveys/feasibility reports must benefit the food processing sector in the State. Pattern of assistance - cost, subject to a maximum of Rs lakhs. When the State Mission Directorate of NMFP commissions the study/ survey, there will be no financial ceilings. Institute for Integrated Rural Development- IIRD, Shimla 70

71 Procedure for application - Applicants may apply for conducting studies/surveys/feasibility reports/dprs with required/necessary documents as per prescribed format to the State Mission Directorate of NMFP normally 3 months in advance from the date of the event. c. Exhibition/fairs The main objectives of this scheme are as under - To familiarize the existing and prospective entrepreneurs with modern techniques of food processing, packaging and product development. Development of market and popularisation of food products. Attracting investments in Food Processing Sector. To disseminate information regarding food processing industry. Eligibility - Government/Autonomous/Statutory Bodies/Academic Institutions/Bodies, Cooperative Societies, Industry Associations, Private Bodies, SHGs, NGOs etc., are eligible to seek assistance for conducting Exhibition and Fair etc. The exhibition/fair must benefit the food processing sector in the State Pattern of assistance - In case of organizing a fair/exhibition, quantum of assistance would be decided on merits of the proposal. The State / UTs may also directly participate in national exhibitions /fairs like, Aahar Fair at Delhi, Regional edition(s) of Aahar Fair, Food Pro Fair and Food & Beverages Exhibition by CII, Annapoorna- World of Food India by FICCI etc. either through its own officials/resources or by engaging the services of an Event Management Agency through a transparent procedure Procedure of application - Applicants may apply for organizing exhibitions/fairs with required/necessary documents as per prescribed format to the State Mission Directorate of NMFP normally 3 months in advance from the date of the event. d. Study tours Assistance may also be provided for organizing domestic study tours for exposure to various aspects of Food Processing. Participants could be representatives from the Government, Food Industry associations/organizations/entrepreneurs. The organization seeking the assistance for organizing a study tour may submit a proposal indicating objectives of the study tour, place(s) to be visited during the tour, Institute for Integrated Rural Development- IIRD, Shimla 71

72 composition of the study team, bio-data of the members of the study team, detailed justification for the study tour, total estimated expenditure on the tour along with its break-up, assistance sought, contribution from the organizers and sources of funding. Pattern of assistance - Each study tour group may consist of upto 25 persons in a batch not more than 2 (two) such tours may be undertaken in a year. The financial ceiling shall not exceed Rs lakhs per batch. The expenditure in a financial year shall not exceed Rs lakhs under this component of the scheme. v) Guidelines for implementation of Setting up of Primary Processing Centres/Collection Centres in the Rural Areas The objective of the scheme is creation of effective backward linkages and empowerment of farmers. This can be achieved by providing processing and preservation facilities at village level to help the farmers to enhance shelf life of perishable produce resulting in better remunerative prices for their agricultural produce. Salient features of the scheme - The Scheme of setting up of PPCs/CCs will have the following components: Minimum land requirement will be 1-2 acres. Minimum Processing Facilities at the firm level which may include facilities for weighing, cleaning, sorting, grading, packing, pre-cooling, Controlled Atmosphere (CA)/ Modified Atmosphere (MA), Cold Storage, Dry Warehouses and IQF. Mobile Pre-cooling trucks and reefer trucks which may be suitable for transportation of the perishable agricultural produce/horticulture/dairy/meat/fish produce. Eligibility - The applicant should have some financial back ground to implement the project The Proposals for the project should be duly appraised by the Bank/ Financial Institutions. The appraisal report should contain the entire project components for which grant are sought. Date of commercial operations should not be prior to the date of submission of application. No second proposal from the same applicant/ organization Pattern of Assistance: Maximum of amount of grant-in-aid admissible under the scheme is Rs.2.50 crore as per details given below: i). Grant-in-aid for PPC/CC will be 50% of the eligible project cost for the general areas and 75% in North-East, ITDP & Difficult Areas (NE States including Sikkim, notified ITDP areas and hilly states like H.P., J&K, Uttarakhand), respectively. ii). Cost of land, Institute for Integrated Rural Development- IIRD, Shimla 72

73 preoperative expenses, margin money for working capital and contingency, non-technical civil works and plants & machinery not directly related to the PPC/CC will not be eligible for calculating eligible product cost Procedure of application - Applicants seeking financial assistance are required to submit their applications in prescribed format to State NMFP Director or in the manner to be decided by the State Level Empowered Committee (SLEC), which will also decide the modus operandi, processing / approval / release of grants-in-aid to the sanctioned projects vi) Guidelines for implementation of Scheme of Modernization of Meat Shops The scheme aims at improving the overall hygiene in the meat shops by providing basic infrastructure and equipment. This will also ensure food safety rules and regulation compliances as per FSS Act, 2006 and caters to public health concerns as a whole. This in turn will provide wholesome meat to the consumers. Modernization of meat shops will also help to protect and sustain the livelihoods of people involved. Eligibility All implementing agencies/organizations such as Government/PSUs/Joint Ventures/NGOs/Cooperatives/SHGs/Private Sector/Individuals engaged in the operations of meat shops would be eligible for financial assistance under the scheme. Procedure for application - Applicants seeking financial assistance are required to submit their applications in the manner to be decided by the SLEC which will also decide the modus operandi for processing/approval/release of grants-in-aid to the sanctioned projects. vii) Guidelines for implementation of the scheme of reefer vehicles - The objective of the scheme is to provide financial assistance to standalone reefer vehicle/s and mobile pre-cooling van/s (reefer unit and refer cabinet permanently mounted on the vehicle) for carrying & transporting both Horticultural & non-horticultural produce. Standalone reefer vehicle/s can be purchased under the scheme. This scheme will enable linking groups of producers to the processors and markets through well-equipped supply chain management Eligibility - The assistance will be available to the individual Entrepreneurs, Partnership firms, Regd. Societies, Co-operatives, NGOs, SHGs, Companies and Corporations etc. The applicant/beneficiary should have sound financial back ground and the Projects necessarily be supported by Bank/FIs by way of term loan. Institute for Integrated Rural Development- IIRD, Shimla 73

74 Pattern of assistance - Reefer Vehicles/ Mobile pre-cooling vans: Credit linked back ended 50% of the cost of New Reefer Vehicle(s)/ Mobile pre-cooling van(s)upto a maximum of Rs lakh. The reefer unit and refer cabinet permanently mounted on the vehicle are eligible. Procedure for application - Applicants/firms seeking financial assistance are required to submit their applications in the manner to be decided by the State Level Empowered Committee (SLEC), which will also decide the modus operandi of processing/approval/release of grants-in-aid to the sanctioned projects. Institute for Integrated Rural Development- IIRD, Shimla 74

75 SECTION 1 DAY 4 Role of National Horticulture Board (NHB) Resource Person for this Session- Mr. Sunil Koijam, Assistant Professor, Rajiv Gandhi University, Itanagar National Horticulture Board (NHB) was set up by the Government of India in 1984 as an autonomous society under the Societies Registration Act Board has its Head Quarter in Institutional Area, Sector 18, Gurgaon, Haryana. 1. Objectives of NHB The broad aims & objectives of all the above mentioned schemes are as under : - Development of hi-tech commercial horticulture in identified belts Development of modern post-harvest management infrastructure as integral part of area expansion projects or as common facility for cluster of projects Development of integrated, energy efficient cold chain infrastructure for fresh horticulture produce, Popularization of identified new technologies / tools / techniques for commercialization / adoption, after carrying out technology need assessment, Assistance in securing availability of quality planting material by promoting setting up of scion and root stock banks / mother plant nurseries, carrying out accreditation/ rating of horticulture nurseries and need based imports of planting material Promotion and market development of fresh horticulture produce Promotion of field trials of newly developed/ imported planting materials and other farm inputs, production technology, PHM protocols, INM and IPM protocols, and applied R&D programmes for commercialization of proven technology 2. Schemes of national horticulture board(nhb) Some of the scheme of NHB are as under : Institute for Integrated Rural Development- IIRD, Shimla 75

76 a) Scheme of development of commercial horticulture through production and post harvest management of horticulture crops This scheme is further divided into two schemes: i) For production - Credit linked projects relating to establishment of hi-tech commercial production units involving any the following items are eligible for assistance under this component: High quality commercial horticulture crops Indigenous crops /produce, herbs, spices Aromatic & medicinal Plants. Seed & Nursery Bio-Technology, micro-biology, bio-chemistry, bio-diversity & tissue culture Protected cultivators Bio-pesticides Organic fertilizers, organic foods, vermicompost Establishment of Horticultural Health clinics /laboratories Hydroponics, Aeroponics Beekeeping and its products Mushrooms and its products Nuts and its products Pattern of Assistance credit linked % of the total project cost limited to Rs 25 lakh per project in general; area and Rs 30 lakh in NE Region, hilly region. However for high value crops like date palm, olive and saffron subsidy will 25% of the project cost with ceiling of 50 lakhs and 33 % in the case of hilly areas and NE states. ii) For primary processing Credit linked projects involving the following items are eligible for assistance under this component Washing drying, sorting, grading, packing and freezing units Pre-cooling units Reefer vans Retail outlets Ripening/curing chamber Institute for Integrated Rural Development- IIRD, Shimla 76

77 Primary processing of products (fermentation, extraction, distillation, juice vending, dressing, cutting, chopping, dehydration etc) Products out of horticulture waste Adoption of quality assurance system (HACCP,TQM,ISO) Pattern of assistance credit linked 40 % of the total project cost limited to Rs 50 lakh per project in general areas of project cost limited to Rs 60 lakh in hilly and NE states. b. Capital investment subsidy scheme for construction/ expansion/ modernization of cold storages of horticulture produce Credit liked projects relating to cold storages including controlled atmosphere (CA) and modified atmosphere (MA) stores, pre-cooling units and their modernization are eligible for assistance under this scheme. Pattern of assistance the assistance will be credit linked % of the capital cost of project in general areas and 55% I case of hilly areas for a maximum storage capacity of 5000MT c. Scheme for technology development and transfer for promotion of horticulture This scheme have many components. Some of the important ones are given as under i) Introduction of new technology under this scheme undertaking pilot project for introduction of new farm inputs and new technologies or promoting high quality commercial production. R&D projects for solving specific problems relating to production, packaging, storage, handling and transport on merit basis. Pattern of assistance introduction of new technologies shall be carried out by NHB by in house efforts. ii) Technology Awareness under this scheme, extension related events shall be organized with field demonstration and evaluation of extension effort. iii) Organizing/Participating in seminars/ symposiums/ exhibitions to organize demonstration of modern scientific techniques/technologies and improved high yielding varieties of fruits and vegetables etc. Institute for Integrated Rural Development- IIRD, Shimla 77

78 Pattern of assistance The financial assistance would be limited to Rs 3 lakh for organizing state level event and up to 5 lakh for organizing national level event. d. Scheme of horticulture promotion service Under this scheme specialized studies and surveys shall be carried and study/survey report shall be brought out for use by targeted beneficiaries. Pattern of assistance 100% cost of the study shall be borne by the board. North Eastern Regional Agricultural Marketing Corporation Limited (NERAMAC) NERAMAC was set up to support farmers/producers of north east getting remunerative prices for their produce and thereby bridge the gap between the farmers and the market and also to enhance the agricultural, procurement, processing and marketing infrastructure of the North-Eastern Region of India. To fulfill its prime objectives, NERAMAC is offering helping hand in sourcing and procuring cash crops of the producers by intervening in the market and provide them remunerative prices. It also helps processing units by providing raw materials and arranging packaging materials. NERAMAC has a few retail outlets within the North East region which directly sell various processed and value added products produced locally in the region. 1. Objectives The main objectives of NERAMAC are as following: To purchase the marketable surplus of fruits and vegetables from the growers of the north eastern India To make necessary arrangement for its processing and marketing To support farmers and producers through input supplies for better productivity under the aegis of central sector schemes. Over the years, NERAMAC has also been actively involved in marketing of cashew nut, maize, sesame and other oilseeds, spices like ginger, black pepper etc. and major forest product jharu. The corporation has also take up sourcing and marketing of agro-horticultural products like fertilizers, pesticides, seed, agricultural tools and equipments keeping in view of overall agro-horticulture development. Institute for Integrated Rural Development- IIRD, Shimla 78

79 2. Schemes of NERAMAC a. NERAMAC markets cashew nut processed by different processing units in Mankachar District of Assam and Phulbari region of Meghalaya. b. NERAMAC is making attempts to generate employment by providing Juice Vending Machines on franchise basis. This scheme is aimed at, apart from employment generation, creation of alternate marketing structure for natural juice and other processed products and fresh fruits & vegetables of NE Region. c. NERAMAC is also providing training on Post Harvest Management and fruit processing from time to time to develop entrepreneurs for value addition of the agro-horticultural produces grown in the region in collaboration with institutions like Central Food Technological Research Institute (CFTRI), Mysore and other constituents Laboratories of CSIR/Agricultural Universities etc. Institute for Integrated Rural Development- IIRD, Shimla 79

80 SECTION 2 Business Opportunity Guidance Dr. Ajit Singh from IIRD Shimla; conducting the session The purpose of the session was to explain: What is a business opportunity? The factors that contribute to selection of a business opportunity. The processes which help an entrepreneur to decide which business opportunity could be selected. What is a Business Opportunity? We should realize that a business idea is not necessarily a business opportunity.an idea becomes an opportunity only when there is ample scope of implementing it profitably. So the opportunity identification process should be a two step process. Generating idea is the first step and it should be followed by a plan by which it can be implemented profitably. An entrepreneur could be defined as person who invests his resources (which not only include his money, land and other inanimate objects but also himself) in an enterprise which he controls and tries to make a monetary profit which shows whether he has been successful or not. The enterprise by our definition could be a manufacturing unit or a service unit or a trading unit. The success of the business opportunity is measured by the monetary profit and not by the extent of service it renders to the general public or by the amount of goodwill it may generate. For example the person or persons who invented the Linux system of computer operations have done a great service to the general public and yet it has no monetary significance whereas Bill Gates not only developed his windows system but also created Microsoft which makes significant monetary profit using his System. So when we say a business opportunity in the manufacturing sector we are speaking of a product which can be manufactured at a certain cost and can be sold at a price higher than the cost. The cost calculations play the vital role in this scenario. The situation is different when we look at the service sector. Suppose a software engineer announces that he will offer software solutions to your computer problems. His monetary investment could be very low Institute for Integrated Rural Development- IIRD, Shimla 80

81 but his personal investment would be very high. Suppose the money that he makes this way is less than the salary he was earning.in such a situation it could be a problem to work out what his monetary profit is. One may say that he is actually making a loss as, if he had worked for someone else he would have made more money. Moreover the work may give the person immense pleasure and that is one commodity which is impossible to evaluate in monetary terms. So, business opportunity cannot take into consideration intangible experiences. The situation is still different for a food processing entrepreneur. In this case the entrepreneur does both the things. He invests money in acquiring the goods and has to sell them with value addition which means full time personal involvement. However in all the 3 cases undeniably the money / assets that the enterprise accumulates over a period time are the criteria for deciding the success or failure of the enterprise. Therefore when the would-be entrepreneur is looking for a suitable product his chief concern must be the monetary gain. So a business opportunity is that entity which appears to gain more money than the resource invested by the entrepreneur. I must stress again that the cost of certain resources for example the time invested is not easy to calculate but we will ignore that aspect for the time being. Factors that Contribute to a Business Opportunity The success or failure of a business depends on many factors. The entrepreneur with his strengths and weaknesses is certainly one of the main factors. However he does operate in an environment and the environment plays equally significant part. We can broadly categorize the factors that contribute to business opportunity as Personality factors and Environment factors. Personality The opportunity search invariably starts with the entrepreneur himself.a lot of research has been done on the entrepreneurial personality with varying conclusions. Doctor David McClelland s research on achievement motivation is well known and in fact forms the backbone of the Entrepreneurial Personality Development mentioned above. The entrepreneur needs to take a critical self analysis and assess his strengths and weaknesses objectively. The psychological factors like Achievement Motivation or Risk Taking Ability are of course a prerequisite for choosing the entrepreneurial career but having made up one s mind to become an entrepreneur the person must check what strengths one has. When I say personal strengths I not only Institute for Integrated Rural Development- IIRD, Shimla 81

82 mean Education or Experience or Communication skills but I also mean skills like the ability to make friends who may provide resources. Creativity and problem solving are the two personal traits which an entrepreneur needs more than anything else. Creativity generates ideas and problem solving skills are needed to develop this idea into a profitable business opportunity. Environment The environment plays the key part in selection of business opportunity and its implementation. For any economic activity there has to be a demand and the entrepreneur simply tries to meet this demand. The demand depends upon the consumers and their needs. So the Entrepreneur must constantly strive to locate the NEED and the demand generated by the need and the gap between Demand and Supply. He must keep his eyes and ears open and look at all things around and wonder if this could give rise to a business idea Now the needs of the people are almost infinite.one may just look at one s own daily routine. We get up we need toothpaste, tooth brush, Soap, towel, oil, clothes, footwear, food. We need services like tuition classes for children, laundry service. Internet service, ticketing service.. Again the list could well be unending. We need things like groceries, vegetables, stationery You may add to this too. So whether manufacturing sector or food processing sector or trading the business opportunities are all around us. Yet choosing a business opportunity which one can successfully that is profitably pursue is the most vital job. So how does one go about choosing a suitable business opportunity from the plethora of business ideas available? We will repeat here something that we have already said before. A business idea is not necessarily a business opportunity. An idea becomes an opportunity only when one can implement it profitably. So the opportunity identification process should be a two step process. Generate idea and then try to work out a plan by which it can be implemented profitably. Some Pathways to successful Idea Generation We will first look at some idea generators and later see what we need to do to convert that idea into an opportunity. Institute for Integrated Rural Development- IIRD, Shimla 82

83 Ideas in the immediate surroundings Me Too Pathway: The person looking for a business opportunity may look around to identify business persons who had background similar to oneself. A lady may see that someone else has started a take away eatery and she may say to herself If she can do it so can I. A person who sees someone trading in readymade clothes may decide that I too can buy and sell readymade clothes. The point here is that the feeling, if someone else like me is doing it successfully then I too can do it is a comfortable feeling and one can expand on the idea without much stress. I can add something pathway: Here the potential entrepreneur sees what someone else is doing and decides to add something extra.for example the lady in the example above may decide to add extra items or may decide to give home delivery thus adding something extra whereas the readymade clothes man may also start offering accessories with the clothes. Ideas not from immediate surroundings Let me scan and ponder pathway: Just reading the daily newspaper can generate ideas. For example you may read in the newspaper about a rickshaw accident involving school children and it may generate the idea of a transport fleet catering exclusively to school children and college students. You may read in the paper that the population of old people is becoming larger and larger and this may give you an idea to start homes for old people.one can study trade magazines, franchise ads and similar literature and it may lead to the elusive opportunity. Internet is a huge source of information but needs to be carefully studied regarding the authenticity of the source. The changing environment pathway: If one scans with discerning eyes one sees that people and society are changing. This gives rise to needs which are new or needs which are in a state of transition. As for example Ecology is getting more and more attention these days. You may think of providing or distributing ecofriendly products. For example you may offer paper bags to replace plastic bags or leaf cups / plates instead of plastic cups or plates or new of new ecofriendly packaging options. Ideas from personal experience or skills Let me use my talent for my profit Pathway: One entrepreneur I know was working on the machine floor of a big engineering company. He knew about the component needs of the company and Institute for Integrated Rural Development- IIRD, Shimla 83

84 could see how he could set up his own workshop to cater to the needs of not only the company he was working for but also for other similar companies. A person who likes food can always innovate and improve the food processing techniques available and make an impact on the food processing industry. It is possible to get an idea first and then to acquire the talent/skill needed to implement it by joining some special training program. It is necessary to generate as many ideas as possible and to identify a few among them for further study. Ideas from skills of other people Let us help each other Pathway: You may know an individual or a group of people who have talent of making artistic or useful commodities. For example a group of tribals may be renowned for their innovative food products but may not know how to market these or a group of housewives can make tasty snacks and you may start an enterprise with their talents and your marketing skills. Idea or Opportunity? It is then necessary for the entrepreneur to see if his idea is workable. Can it actually generate profit? Only then can it be considered an opportunity. So what are the factors that need to be examined before we can call a business idea, a business opportunity? To resolve this issue an entrepreneur must prepare a business plan and check whether the idea is feasible and whether the idea can be successfully implemented at least on paper. Depending on the idea an entrepreneur will need to check the following three feasibilities: The Market Feasibility The Technical Feasibility The Financial Feasibility The Market Feasibility It is highly recommended that the entrepreneur before embarking on any other activity spend some time researching his market. The tool to study the market is known as Market Survey. It is a very useful tool to understand various important things like the present size of the market, the quality norms, the buying pattern, the existing pricing policy and the possibility of the future Growth. A detailed discussion of Market Survey objectives or techniques is beyond the scope of this session but it is still necessary to Institute for Integrated Rural Development- IIRD, Shimla 84

85 examine how the market survey will help to distinguish between the Business Idea and Business Opportunity. The market survey gathers information about the following aspects of Market Customers Raw materials Machinery / Equipment Competitors Man Power Packaging Pricing Some of the important things the Entrepreneur needs to know from his interaction and discussion with customers at this stage are Size of demand and possibility of increase in demand Quality that customers expect The interface between customer and entrepreneur This will help the entrepreneur to take a decision regarding whether the size of market share for him and will help him to evolve strategies regarding reaching his market and increasing his market share. The Entrepreneur also needs to know about the competitors and their strengths and weaknesses especially the add-ons they may be offering. This will help him to take a decision regarding whether he can cope with the competition and help him to work out strategies to overcome the competition. Once the Entrepreneur is convinced that he has a marketable idea / project, he takes the next step which is technical feasibility. Technical Feasibility The Entrepreneur on the basis of the data he has collected on manpower requirement / availability and the machinery requirement takes a decision as to whether it is technically feasible for him to implement the Institute for Integrated Rural Development- IIRD, Shimla 85

86 project. The Entrepreneur needs to address questions like availability of power and whether skilled manpower is required. Once the Entrepreneur is convinced of the marketing and financial feasibility of the idea he may examine the financial feasibility. Financial Feasibility A financial feasibility study is an assessment of the financial aspects of the business idea. It is a study of financial resources required for starting and running a business. It considers start-up capital, the sources of start-up capital, expenses, revenues, and investor income. When the Entrepreneur is convinced of feasibility of all 3 aspects marketing, Technical and Financial feasibility then we may call his business idea, business opportunity. Institute for Integrated Rural Development- IIRD, Shimla 86

87 SECTION 3 Brainstorming on Product Identification of Food Processing The Brainstorming session on Product Identification was conducted with food processing experts from Bosco Integrated Development Centre (Yupia, Papum Pare Distict, Arunachal Pradesh) Dr. Ajit Singh, Mr. Danda Baishya, Food Processing Expert & Mr. Fanuel Kashop, Marketing Officer Bosco Integrated Development Centre during the Brainstorming Session Mr. Danda Baishya Food processing expert from Bosco Integrated development Centre narrated his personal experience regarding his training for food processing from Shillong. During his talk he stressed on the importance of hygiene during the food processing process, the importance of wearing an apron, hand gloves, face mask etc. to protect the food from hair etc. He also enlightened the participants regarding the importance of knowing every ingredient in your processed food and to ensure that it will be safe for the consumers. Mr. Fanuel Kashop Marketing Officer Bosco Integrated Development Centre also narrated his personal experience when they started their food processing venture. He made the participants aware of the importance of packaging and the available options for packaging various food products. The problems that he faced during marketing were also discussed. He advised the participants to slowly build on trust of the consumers and since food has got deep linkages with the culture and local practices of the people it is best to have knowledge about the local culture and practices. Institute for Integrated Rural Development- IIRD, Shimla 87

88 The participants also expressed their opinions regarding the viability of entering into the food processing Industry. Most of the participants were enthusiastic and expressed their interest in venturing into food processing in the following areas: Frozen meat Industry Fruit pickles Raja Chilli (Capsicum frutescens) pickles Fermented Bamboo products Processed Mushrooms Bamboo Shoot products Institute for Integrated Rural Development- IIRD, Shimla 88

89 SECTION - 1 DAY - 5 Individual Counseling on Product Identification in Food Processing This Session was conducted by Ms. Sunita Singh from IIRD Shimla along with the subject experts from Bosco Integrated Development Centre Mr. Fanuel Kashop and Mr. Danda Baishya.. Institute for Integrated Rural Development- IIRD, Shimla 89

90 SECTION - 2 Preliminary Project Writing Profile PPR Formulation & Discussion Template for Preparing Project Proposals Project Cover sheet include contact information, project director, project period, indigenous population that your organization represents or works with, and project summary Organizational history, mission, vision and structure include a few brief paragraphs explaining how your organization was established, its mission, vision and structure, as well as its record of working on indigenous issues Background and analysis of the problem to be addressed provide an an analysis of the field, what are the existing gaps and challenges, and what exactly is the problem to be addressed? Which indigenous peoples are affected by this problem and how can the proposed project/program help address the issue? Proposed goal, objectives, target population and implementation plan What is the overall goal of the program/project, and what are the objectives? How will the project be implemented? Annual project budget - provide a line item budget in US$ with short narrative explanations for each line item, which can be footnoted to the budget. A sample budget is attached on the following page. Attachments: Overall organizational budget (operating budget) List of other potential sources of support (if any) By-laws of association/organization, where appropriate Institute for Integrated Rural Development- IIRD, Shimla 90

91 Project Profile for Food Processing Unit Example Summary: Sr. No. Project Food Processing Unit 1. Proposed Location KSIDC s Industrial Growth Centre, Pallippuram, Cherthala, Alappuzha District 2. Proposed capacity 7200 tonnes per annum 3. Project Cost Rs.800 lakhs 4. Sales Turnover (At optimum capacity utilization) Rs.2000 lakhs 5. Major Raw materials Various edible items 6. Land Requirement 1 acre 7. Man Power 200 Nos. 8. PBT (At optimum capacity) Rs.230 lakhs 9. PAT Rs.170 lakhs Format for Submitting Project Proposal discussed with Participants Section 1: Project Summary Give project title, Principal Investigator (PI) name, Co-PI from the Institute/Organisation, Name of Institution (s) involved before writing the summary. The summary should give a short account of (a) research objectives (b) methodology to be adopted and (c) expected outcome of the project. Section 2: Origin of the Proposal Identify the stimuli, which prompted preparations and submission of the project proposal. The source of stimuli could be other published reports, proceedings of a special workshop/ seminar, government on Thrust Areas, earlier project etc. In all such cases, give specific details so that the source is clearly identifiable. If the project has no such origin, please state so. Institute for Integrated Rural Development- IIRD, Shimla 91

92 Section 3: Definition of the Problem Give precise technical statement of only those problems which the project is expected to cover with the specified duration (normally 3 years). Do not include statement, instead, a straightforward definition of the problem. Section 4: Objectives Instead of an essay, it is suggested that the objectives be spelled out point by point in shot keeping in view the definition of the problem outlined in section 3. Section 5: International Status & National Status Please indicate the recent development in the proposed field of work, both in the country and in the other part of the world. This should be in 2 separate parts (namely Indian and international situations) and based on literature survey, inclusion of list of important review articles, if available, is recommended. The section will enable the referees to appreciate the effort that has been put in preparing the project proposal. Section 6: Relevance of the proposal in Indian/ISRO context The importance of the project should be brought out in this section in the light of the Indian context. Any improvement that can best help in adaptation of any specific technology to the Indian context will be given extra weightage. Indicate the matters relating to scientific and technical advancement of knowledge, issues concerning application of the new knowledge to the needs of the country. Section 7: Review of the available expertise within the investigation group/ institution The section is essentially to summarize the background of the investigators. Bio-data of the Principal Investigators who are already in position and available for the project are to be given here, to establish credential for undertaking the project and to highlight relevance of the project to the work already going on in the sponsoring institution. While providing the list of publications include (a) name(s) of Journal/Publisher etc. Institute for Integrated Rural Development- IIRD, Shimla 92

93 Summary of details of the projects (completed/on-going or proposed) with different Investigators may be given. Section 8: Work plan/ Methodology It is essential that from this statement the other experts in the field should get a clear understanding of the research technique to be employed in the project as distinct from data/sample collection activities and routine activities. Further, the description should indicate precisely how the stated objectives will be achieved. Discuss different methods of approach in order of priority. Section 9: Time schedule On the basis of work elements identified earlier, the time schedule should be drawn. Here specific indications of milestone will help in periodic evaluation of the progress of the project. It is once again cleared here that lead-time for creation of infrastructural facilities be computed on realistic basis. Section 10: Summary of the Budget Summary of the budget (year wise) may be prepared after filling on Budget for manpower and Budget for permanent equipment. Give realistic estimate of costs of different items involved. While doing so, please ensure that all the constraints have been taken note of and time of different activities properly estimated. All costs are to be expressed in rupees only. Section10.1. A: Budget for Manpower While major part of the project work is to be carried out by the principal Investigator and Co- Investigators. Some additional technical personnel may be asked for working full time on the project. Please assess your additional requirements carefully taking into account the level of personnel required and their likely availability for working on the project. You may like to select your requirement from amongst the following categories of personnel: (i) (ii) Personnel with two to three years of food processing experience Fresh Post-graduates or equivalent (iii) Technical staff Institute for Integrated Rural Development- IIRD, Shimla 93

94 (iv) Secretariat Salaries payable are to be expressed in lump-sum indicating the regular scale of pay. Full-time personnel are those who would be recruited fresh or employed from existing staff of the institute full time for the project (and their salaries /wages debited to project account). People who are already in position and whose honorarium/ job-rate payment/over-time allowance/ part of salary is to be debited to project account, may be classified under part-time personnel. For both categories of personnel, the extent of involvement, especially for computation of budget estimates, may be expressed in terms of man-months per year. Please prepare the list in descending order of salary. Personnel with same designation but with different salary are to be shown separately. B: Justification for Salaries & Wages Justification for number and level of stuff to be recruited, their year of deployment and comments on whether personnel from institutions will be deployed on deputation basis. Section A : Budget for other costs Some projects may have special requirements not covered under section 10.1 costs for such requirements are to be indicated in this section specifying the item under i & ii. Contingencies are meant to cover incidental and other miscellaneous expenditure. B: Justification for other costs Please specify the special requirements. These requirements could be of computer time, payments for using specialized instrumentation facilities etc. The basis of calculating the costs should be clearly stated. Section A: Budget for permanent equipments Specifically list all items of permanent equipment required for the project or requiring import. Other minor items may be clubbed. Institute for Integrated Rural Development- IIRD, Shimla 94

95 Be as specific as possible while naming, the equipment. Indication of the make and model will help identifying the exact nature of the equipment better. Include provisions for installation charge, inland transport insurance etc. in the estimated cost. B: Justification for permanent equipment Justification for each item of equipment (including their accessories, specific characteristics, resolution etc. in relation to specific experiments/measurements/tests) contemplated in the project is to be given. State what efforts will be made to utilize existing equipment in your department, other departments of the institution, other institutions in the neighborhood. In case of a demand for import of equipment, give reasons why indigenous models, if available cannot be used. Institute for Integrated Rural Development- IIRD, Shimla 95

96 VALEDICTORY SESSION The valedictory session was graced by the presence of the Chief Guest, Mr. Pradeep Kumar Chief Editor of Arunachal Front. He is one of the founding members of the Mass Communication Department at RGU- Itanagar and a pioneering and renowned personalities in the Media of Arunachal Pradesh. Dr. Nawaj Khan has attended the occasion as the Guest of Honour. The Chief Guest delivered an inspiring speech to the participants and reminded them that Arunachal has lots of opportunities in the sector of food processing and citing the huge success of the large cardamom project initiated by the Arunachal government. After the short speech the participants of the EDP program was presented with a certificate for attending the training program. The valedictory function of the EDP programme held at RGU Itanagar Institute for Integrated Rural Development- IIRD, Shimla 96

97 Industrial visit of Local Food Processing Industries The participants of the training programme were taken for an Industrial Visit to one of the local Food Processing Industries, namely at the Bosco Integrated Development Centre located at Yupia/ Tigdo, Papum Pare district, Arunachal Pradesh. They were exposed to the various food processing activities of this centre including Jam making, pickling, fruit juice processing, chutney making. The equipments required for all this processes are also demonstrated to the participants. Practical tips for the processing of the various food products are also provided to the participants. The small Organic farm maintained by the Institute was also visited during the tour. Industrial visit to Food Processing Unit of Bosco Integrated Development Center at Yupia Institute for Integrated Rural Development- IIRD, Shimla 97

98 CONCLUSION The Institute for Integrated Rural Development (IIRD) Shimla has successful organized the Entrepreneurship Development Program (EDP) in Food processing for a group of young and enthusiastic participants at Itanagar, Arunachal Pradesh. The participants were exposed in regards of the key steps in startup venturing process and equipped with adequate knowledge to initiate a venture in Food Processing and Agro-based technologies and/or services. They were also made equipped with requisite skills, knowledge and competencies to convert their startup idea into a viable business entity. After the training programme it seems that most of the participants were interested to develop bankable project reports to get an opportunity to present the same for incubation support or appropriate funding support. The trainees were prepared to meet the growing need of the food processing industries and also remained up-to-date with latest technologies & diversifications and new ways of managing and marketing to face global competition. This EDP Programme also has increased the options for getting sustainable employment opportunities to the youths and also to reduce the gap in requirement and availability of skilled manpower in food processing sector. Institute for Integrated Rural Development- IIRD, Shimla 98

99 ANNEXURES Annexure1. Press cuttings related to the Programme Institute for Integrated Rural Development- IIRD, Shimla 99

100 Institute for Integrated Rural Development- IIRD, Shimla 100