Vegetable clusters near cities government called for EoI to select agencies

National Horticulture Board Revises Cluster Development Program to Tackle Supply Chain Issues

The National Horticulture Board (NHB) has released updated guidelines for its Cluster Development Programme (CDP). This move aims to solve key challenges in India’s horticulture sector such as high post-harvest losses, poor supply chain infrastructure, and fluctuating prices in the domestic market. NHB has also called for Expressions of Interest (EoI) to select agencies that will implement this programme.

These selected agencies will be responsible for developing two main types of clusters:

1. High-Value Multi-Commodity Horticulture Clusters (HMCs)

2. Peri-Urban Vegetable Clusters

Why This Program?

In 2021, NHB ran a pilot project for horticulture crops. Based on its success, the program has now been redesigned to make India’s horticulture clusters more globally competitive.

The Peri-Urban Vegetable Clusters are meant to improve supply chains and reduce price fluctuations for key vegetables like tomatoes, onions, and potatoes (TOP) in major urban areas such as Delhi NCR, Mumbai, Kolkata, Bangalore, Hyderabad, Pune, and Chennai.

The government noted several problems in current supply chains:

• Lack of direct links between farmers and consumers

• Poor crop planning

• No proper forecasting of supply and demand

• Lack of adherence to good agricultural practices

• Too many middlemen

• High distribution costs and wastage

About the Scheme

The central government will invest ₹2,000 crore over five years under a central sector scheme. The goal is to grow vegetables near urban areas—within:

• 50 km for cities with under 10 lakh population

• 80 km for cities with 10–15 lakh population

• 100 km for cities with over 15 lakh population

The implementing agency must ensure that at least 50% of the vegetables supplied to cities under this program come from within the cluster. In addition to the main TOP crops, the cluster should include at least 10 other fruits or vegetables.

High-Value Multi-Commodity Clusters (HMCs)

Unlike peri-urban clusters, HMC projects will be selected through a competitive process. Interested agencies must identify the clusters themselves and prove their plan is viable under the CDP framework.

These clusters can either:

• Be existing clusters

• Be induced clusters, where new crops not currently grown are introduced based on market potential

A horticulture cluster refers to a region focused on growing specific crops and specializing in various parts of the value chain like production, storage, marketing, and export.

The NHB has set a minimum requirement: the farm gate value (FGV) of the main crop in the cluster must be at least ₹100 crore annually, calculated using this formula:
Acreage × Productivity × Price

Some experts believe this ₹100 crore limit might discourage innovation, especially since many successful horticulture clusters have developed naturally without such restrictions. They suggest the programme should focus more on encouraging innovation rather than setting rigid criteria.

Scope for Updates

The guidelines can be revised anytime by the agriculture ministry. A Guideline and Cost Norm Committee, headed by the additional secretary for horticulture, will oversee such changes. Members include officials from the agriculture and food processing ministries and the Deputy Director General (Horticulture) of ICAR.

Despite India achieving a record horticulture production of 352.23 million tonnes in 2023–24 (with vegetables making up 58% and fruits 32%), the supply chain has not kept pace, leading to major price volatility. The revamped CDP aims to fix that.