The loan will help expand agricultural value chains and facilitate better linkages for small-scale farmers with processors, agribusiness entrepreneurs, and service providers in Muzaffarpur and Patna-Nalanda regions of Bihar.
The loan is the first tranche of a $170 million multitranche financing facility under the Agribusiness Infrastructure Development Investment Program, which was approved by the ADB Board in September 2010 to boost private sector investment in agribusiness infrastructure in selected regions of Bihar and Maharashtra.
The programme will build physical and institutional links along horticulture integrated value chains (IVCs), which include farmers, processors, agribusiness entrepreneurs, and service providers, a central goal of the Indian government. This will help farmers, traders and other value chain stakeholders to improve their products and processes, become competitive and adapt to changes in end markets.
Public-private partnerships (PPP) to design, build, finance and operate the integrated value chains are a key component of the project. Private investors will provide collection services, grading, packaging, storing, processing and cold storage facilities to a range of high value chains. This will raise the value addition being done from agricultural activities, by reducing post-harvest wastes and integrating small landholders into the agribusiness value chains.
The programme would also enhance livelihoods by benefitting farmers, the landless poor and women through creation of additional employment opportunities along the integrated value chains and ancillary industries thereby raising their income, and improving off-farm income opportunities for the rural poor.
The signatories to the loan were Venu Rajamony, joint secretary (multilateral institutions), department of economic affairs, ministry of finance, on behalf of the Government of India; and Hun Kim, country director for India, on behalf of ADB. The project agreement was signed by Dr N Vijaya Lakshmi, secretary (agriculture), on behalf of the state government of Bihar.
