Agriculture Infrastructure Fund

Agriculture Infrastructure Fund crosses the Rs 30,000-cr mark of capital mobilisation for projects in the agriculture sector.

Key Takeaway
- With a 3% interest subsidy and credit guarantee backing through CGTMSE for loans up to Rs.2 crore.
- AIF provides broad financial support to farmers, agri-entrepreneurs, and farmer groups like Farmer Producer Organisations (FPOs), Self Help Groups (SHGs), Joint Liability Groups (JLGs) etc.
- To create post-harvest management infrastructure and build community farming assets throughout the country.

About
- It is a pan-India Central Sector Scheme that will be implemented in 2020.
- It aims to provide a medium-long-term debt financing facility for investment in viable projects for post-harvest management infrastructure.
  - In addition, community farming assets through interest subvention and financial support.
- Its term has been increased to 13 years (FY2020 to FY2032).
Intended beneficiaries
- Primary Agricultural Credit Societies (PACS)
- Marketing Cooperative Societies
- Farmer Producers Organizations (FPOs)
- Self-Help Group (SHG)
- Farmers
- Multipurpose Cooperative Societies
- Agri-entrepreneurs
- Startups
- Aggregation Infrastructure Providers
- Central/State agency or Local Body sponsored PPP Project.

This interest subsidy is offered for seven years.
It offers risk-sharing and market access opportunities to farmers and value chain participants.
Farmers can sell their produce directly if the marketing infrastructure is improved.
Post-harvest losses can be mitigated by investing in logistical infrastructure.
The repayment moratorium under this financing instrument may vary between a minimum of 6 months and a maximum of 2 years.
It also includes state-specific APMC targeting and the upkeep of sanitary and phytosanitary requirements for organic food marketing and exports.
Monitoring committees at the district, state, and national levels will shorten file processing to fewer than 60 days.
The project aims to reduce spatial and temporal hazards in the agricultural ecosystem by providing suitable post-harvest infrastructure.

Objectives for Farmers
- Improved marketing infrastructure allows farmers to sell directly to a more significant base of consumers, increasing value realisation.
- Because of investments in logistical infrastructure, there are fewer intermediaries and fewer post-harvest losses.
  - Due to this, farmers will be more self-sufficient and have better access to markets.
- Improved realisation due to contemporary packaging and cold storage system access, as farmers can sell when they choose.
- Community agricultural assets for increased productivity and input optimisation will result in significant savings.
Objectives for Government
- Direct priority sector lending in unviable projects through interest subsidy, incentive, and credit guarantee.
  - This will spur agricultural innovation and private-sector investment.
- The government will be able to lower national food waste percentages due to improvements in post-harvest infrastructure.
  - It allows the agriculture sector to compete at current global levels.
- Create viable PPP initiatives to attract investment in agricultural infrastructure.
Objectives for Consumers
- A more significant proportion of the product will reach the market, allowing consumers to benefit from higher quality and lower pricing.

The AIF is a financial tool for developing post-harvest infrastructure and communal agricultural assets.
The Union Ministry of Agriculture has organised several conclaves and seminars to raise awareness about the AIF among various stakeholders.

Pic Courtesy: Journals of India

Content Source: PIB