Project Development Objective:

“To support the development of inclusive and competitive agriculture value chains, focusing on smallholder farmers and Agri entrepreneurs in Maharashtra.”

Strategy

• Build state capacity for evidence-based agribusiness reforms
• Expand market access
• Strengthen risk mitigation mechanism

Unique Implementation arrangement: 

The project is seeking Private Sector Financing through VSTF and technical and managerial expertise in agribusiness from the private sector.

State Departments Involved (5): Agriculture; Marketing; Cooperation; Animal Husbandry & Rural Development

Maharashtra Village Social Transformation Foundation (VSTF) has been established in 2017 to transform 1000 villages in Maharashtra by converging CSR efforts of the private sector and various schemes of Union and State Govt. VSTF has been able to converge government schemes amounting to Rs 518 Cr against Rs 40 Cr CSR funding owing to a multiplying effect of 13x. Due to this expansion of the program to 5000 villages is being considered by GoM. 

To realize the Honourable Prime Minister’s vision of doubling the income of farmers by 2022, the Government of Maharashtra (GoM) has committed to the development of market-led, inclusive and competitive value chains. GoM has initiated the State of Maharashtra’s Agribusiness and Rural Transformation (SMART) project, assisted by the World Bank, to support value chains in post-harvest segments of agriculture, facilitate agribusiness investment & expand access to new and organised markets for 1000 Community Based Organizations (CBO) benefitting approximately 10 lakh farmers. This project was recently approved by the State Cabinet on 9th September 2019.

The project will support market-led interventions like

• Productive Partnerships Plans: Support, developing and partially finance Productive Partnerships (PP) between CBOs and pre-identified buyers, agri-SMEs and lead firms to develop a long-term, voluntary and commercial relationship that will help the participating partners to improve their competitiveness in terms of price, cost, productivity, quality, and sales volume. 
• Market Access Plans (MAPs): Finance CBO and Agri – enterprise federations for the adoption of access to potential markets with improved varieties, skills training and extension services for adoption of Good Agricultural practices (GAP), Good Hygiene Practices (GHP), Good Manufacturing Practices (GMP), and other relevant global standards;

The project will support regional infrastructures such as collection centres and Common Facility Centers; adoption of improved technologies in post-harvest storage and processing; adoption of food safety standards of target markets; and customer acquisition through trade fairs and pitches to buyers. We are happy to report that 30 such pilot Productive Partnership and Market Access plans have been prepared by the SMART project as per the guidance of the World Bank.

The SMART project will include a number of actions for Maximizing Finance for Development (MFD) by 

• Improving the policy and regulatory environment for private sector investments in the agricultural sector
• Reducing transaction costs and risks by supporting partnerships between agribusiness producers, enterprises and lead firms; and working with innovative agri-services start-ups and producers to expand service provision
• Forging innovative partnerships for leveraging funding, including Corporate Social Responsibility (CSR) funding through the Village Social Transformation Foundation (VSTF), with private sector participation and financing, to catalyze rural transformation. 
• Leveraging private sector capabilities, through VSTF financed secondments of competent and professional staff for project management and agribusiness

SMART project is proposed to be implemented in the state with financial support from the World Bank (International Bank for Reconstruction and Development). The proposed overall financial structure is as follows-

• Project implementation period – 7 years
• Total Project Cost – USD 300 Million (Rs. 2100 Crores)
• IBRD Loan – USD 210 Million (Rs. 1470 Crores – 70%)
• State Contribution - USD 70 Million (Rs. 560 Crores – 26.67%)
• VSTF Contribution - USD 10 Million (Rs. 70 Crores – 3.33%)

VSTF being one of the Project Implementation Unit (PIU’s) for the SMART project is in a unique position to leverage the resources, skill & expertise of the Private sector for Government initiatives in agriculture and raise the $10 million private-sector funding. The Private sector funding will be largely used to fund Productive partnership plans and Market access plans in and around VSTF villages in a cluster approach.

Component A: Enhancing Institutional Capacity for Agribusiness and Value Chain Development 

A1: Strengthening Institutional Capacity – DoA, DLI based

A2: Strengthening Institutional Capacity – DoM and AHD

A3: Establishing Stewardship Councils 

Component B: Supporting Enterprise Growth and Expanding Market Access

B1: Market Access Support (PP, MAP, and Innovations) 

B2: Support Enterprise Development 

B3: Urban Food Pilot

B4: Access to Finance

Component C: Building Risk Mitigation Mechanisms

C1: Enhanced Market Information and Intelligence services 

C2: Strengthening the warehouse receipts systems. 

C3: Price Risk Management 

Component D: Project Management, Monitoring and Learning

D1: Project Management 

D2: Inclusion and Gender D3: MIS & M&E

Wide range of project beneficiaries – Producers, Community Based Organisations (viz., CLFs, CMRCs, FPOs and PACS), Agri enterprises and other value chain participants.