Ministry sends proposed subsidy plan for co-ops to Cabinet
KATHMANDU, MAR 17 -
The Ministry of Agriculture and Cooperatives submitted to the Cabinet on Wednesday the final draft of the guidelines on providing financial grants and discounts to cooperatives. Under the proposal, cooperatives and their central associations will be provided subsidies and customs duty exemptions.
The guidelines have been drafted by a seven-member committee headed by the agriculture secretary. The plan has recommended that the government provide up to 50 percent of the investment required to set up cooperative farming. The maximum limit of the subsidy, which will not apply to land purchase, has been set at Rs 1.5 million.
Similarly, the government can provide subsidies on machinery of up to 50 percent of the total cost to agriculture processing factories. The upper limit of the funding has been fixed at Rs 1 million. The government had announced during the budget presentation that subsidies would be provided to purchase machinery for agriculture processing factories that are used for processing products such as cardamom, tea, coffee, orange, betel nut, honey, hog plum and dairy items.
The Department of Cooperatives (DoC) has been complaining that it has not been able to provide grants to eligible cooperatives as the cabinet has delayed giving the go-ahead to the guidelines. “We will start distributing funds as per the guidelines after the Cabinet gives its approval,” said Bishnu Prasad Ghimire, under secretary at the DoC.
The DoC has received Rs 87.5 million from the Ministry of Finance out of the pledged Rs 140 million for the purpose. It plans to seek additional funds after the guidelines are approved. The amount includes a grant of Rs 10 million to be provided to the National Cooperatives Federation and subsidies and grants meant for other cooperatives and their central associations.
Ghimire said they had received applications for funding from around 1,000 cooperatives from across the country. “We will select the eligible cooperatives after doing an overall assessment,” he added.
Cooperatives seeking grants are required to submit a working plan of the proposed enterprise and its scheme and potential. Likewise, 80 percent of the raw materials must be domestic and local manpower should be employed for a cooperative to be eligible to receive funding. Cooperatives are allowed to operate a production plant jointly. However, a cooperative engaged in more than one production unit will be barred from getting the subsidy, according to the working procedure.
Similarly, cooperatives that have had their transactions audited will be recommended for exemption of customs duty on the import of machinery and vehicles.
Likewise, the working procedures has provisioned that the committee can recommend exempting customs duty on the import of tractors and other agricultural machinery for cooperatives that are engaged in collective farming. However, the farm should have a minimum area of 50 ropanis in the mountain and hill regions and 8 bighas in the Tarai.
Cooperatives receiving grants from the government are not allowed to sell their production plant for the next 10 years. If it is necessary to sell the machinery, they have to obtain the approval of the Department of Cooperatives.
