Establishment and Modernisation of Rural Slaughterhouses

Meat sector in India has great potential to drive revenue and bring in more employment opportunities in the country yet gotten limited attention over the years. With the implementation of Food safety Act 2006, the standard of the industry and hygiene of the slaughterhouses were improved. The Ministry of Food processing has launched yet another credit linked scheme for the establishment/modernisation of slaughterhouses in the rural areas. The scheme focuses on the small and marginal slaughterhouses in the rural areas and helps the animal owners in improving their livelihood by providing direct linkages to the market. The scheme encourages entrepreneurs in rural areas to take up the activities in the slaughterhouse and turn them into a successful enterprise.

Objective of the Scheme

The scheme targets on achieving the following goals:

Setting up a new structure for the slaughter of livestock
Establishing link of cold chain and distribution of livestock on a profitable basis
Involving private small and medium entrepreneurs from rural and semi-urban areas with a population of less than 50,000 in forming slaughterhouses
Assisting the livestock owners in the rural areas in securing better income through value addition to the products and minimising the wastage of products obtained from the slaughterhouses
Guaranteeing hygiene in meat production through the establishment of cold chain and distribution system. Reducing illegal slaughtering and creating a pollution-free environment

Targeted Areas under the Scheme

The Ministry of Food Processing launches the scheme during the XI Five Year Plan Period mainly in the areas of three main states; Andhra Pradesh, Meghalaya and Uttar Pradesh on a first come first serve basis.

Eligibility Criteria

The eligible beneficiaries who can apply and get benefitted under the scheme are as follows:

Small and Medium entrepreneurs
Any public, private or partnership organisation and NGOs from the rural and semi-urban areas who are interested in setting up or renovate the already existing slaughterhouses.

Prerequisites

The conditions on which the beneficiaries can apply under the scheme are as follows:

They should have obtained the approval from the authorities of their respected municipal or rural local bodies.
Each beneficiary or entrepreneur can obtain benefits for two of their units in the state and can prolong up to a maximum of four groups.
The eligible applicants should prepare a detailed project report for the formation of new slaughterhouses or for the upgradation of the already existing ones. The report should contain all the details regarding the value of the land purchased/borrowed by the entrepreneurs for the utilisation of the projects.
Eligible entrepreneurs should provide the details of the veterinary doctors performing antemortem and postmortem of the animals brought for slaughter.
The slaughterhouses should have a slaughter disposal and treatment plants.
They should have obtained clearance certificate from local administration and pollution control board.

Assistance Allocated under the Scheme

The credit limit subsidy for the beneficiaries or the entrepreneur are scheduled into the following forms:

Establishing Small, Medium Large slaughterhouses
The newly identified slaughterhouses are provided with the maximum capital subsidy under the scheme as per the guidelines and the models established below:
- Under Model I, for the slaughterhouses up to 50 small ruminants with the total financial project cost up to Rs.66 lakhs, 50% of the expenditure or the maximum amount of Rs.30 Lakhs is reimbursed as the back ended subsidy to the beneficiaries.
- Under Model II, for the slaughterhouses up to 25 large ruminants and 50 small ruminants with the total financial project cost up to Rs.99 lakhs, 50% of the project expenditure or the maximum amount of Rs.45 Lakhs is reimbursed as the back ended subsidy to the beneficiaries.
- Under Model III, for the slaughterhouses up to 50 large ruminants and 200 small ruminants with the total financial project cost up to Rs.483 lakhs, 50% of the project expenditure or the maximum amount of Rs.200 Lakhs is reimbursed as the back ended subsidy to the beneficiaries.
- For the poultry dressing units, 50% of the total project expenditure or the ceiling amount of Rs.200 Lakhs is allocated as a back-ended subsidy under the scheme.
Upgradation of existing facilities - 50% of the total financial project cost or the maximum amount of Rs.200 Lakhs is disbursed as the back ended subsidy to the beneficiaries for the modernisation of the already existing slaughterhouses.
Byproducts operation plants - 50% of the total financial project cost or the maximum amount of Rs.30 Lakhs is disbursed as the back ended subsidy to the beneficiaries for the upgradation of the by-product facilitation centres. The total financial cost may vary depending upon the capacity of the by-products used.
Cold storage and cold chain
50% of the total financial project cost or the maximum amount of Rs.30 Lakhs is disbursed as the back ended subsidy to the beneficiaries for the establishment/upgradation of the cold storage and cold chain facilities in the slaughterhouses. The total project cost may vary depending upon the capacity of the cold storage.
Certification on quality - Rs.2 Lakhs per unit is disbursed as a subsidy to the beneficiaries to acquire the quality certification for their slaughterhouses.

Funding Arrangement

The slaughterhouses with higher capacities and outlays covered under the scheme are subjected to their achievability and capability. The fund allocated is shared as per the following pattern:

Entrepreneurs supply 25% of the total project expenditure
50% of the amount is offered as a back-ended capital subsidy by the Ministry
The remaining 25% of the total project amount should be contributed by the entrepreneurs or can be obtained in the form of loans from any of the following eligible financial institutions,
Commercial Banks
Regional Rural Banks
State Cooperative Banks
State Cooperative Agriculture and Rural Development Banks and
Other Financial Institutions which are eligible for refinancing from NABARD

Monitoring Committee

The Central Monitoring Committee reviews the progress of the projects on a half-yearly basis, and the SLSMC committee reviews the performance of the project on a quarterly basis. Banks would conduct the inspections of the units on a regular basis and generate a report to be submitted to NABARD and therein to the Department of Animal Husbandry, Dairying and Fisheries.

Implementation Procedure

Projects submitted by the eligible applicants are evaluated and approved as per the following procedures:

The Detailed Project Reports (DPR) prepared by the entrepreneurs should be forwarded to the banks for verification and sanction.
Banks, after the verification of the projects, would approve and sanction the loan for the entrepreneurs, if found eligible. It forwards the sanction letter, appraisal report and the project to the respective Regional Office of NABARD for the disbursement of the subsidy.
NABARD sets up the meeting with the State Level Sanction and Monitoring Committee (SLSMC) and the respective banks to review the progress of the scheme.
SLSMC reviews the projects presented from the banks and sanctions the projects with the cost of Rs.2 Crores, and in case of projects exceeding the costs, it is forwarded to the National Level Monitoring Committee through NABARD Head Office.
The Joint Monitoring Committee (JMC) at National Level reviews the projects submitted by the SLSMC and authorises the banks to release the first instalment of the loan to the entrepreneurs and approach the respective Regional Office of NABARD for the release of the first instalment of the grant.
NABARD releases the 50% of the advance subsidy to the respective banks to be reserved in the Subsidy Reserve Fund A/c on receiving the claim form.
NABARD team, local animal husbandry department and the financing bank would conduct a field observation of the project and submit the report for the final disbursement of the subsidy.
Banks submit the Utilisation Certificate to NABARD to acknowledge the receipt of final instalment and utilisation of the subsidy.
The capital subsidy disbursed under the scheme is back-ended with a minimum of 3 years lock-in period and would be adjusted against the last few instalments of bank loan.
It should be refunded by the entrepreneurs if the account becomes an NPA.

Repayment of the Loan

Entrepreneurs should repay their loans within 5-9 years or as per the time duration fixed by their banks depending upon the activities involved in their projects.
Repayment is made on the total amount of the loan, including the subsidy in such a way that the subsidy amount is altered after closing of net bank loan, excluding subsidy.

Other Conditions

The projects should be completed within 9 months from the date of release of the first instalment of bank loan and can be extended for 3 more months in case of vindication from the financial institutions.
If the entrepreneur fails to complete the project within the stipulated time, he/she will not be entitled to obtain subsidy under the scheme, and the advance subsidy amount from the Subsidy Reserve Bank A/c must be returned by the respective banks to NABARD.

A display board stating “Assisted by Department of Animal Husbandry Dairying and Fisheries, Ministry of Agriculture, Government of India through NABARD” should be presented in front of the unit.