Everything About Agriculture Infrastructure Fund Scheme

Table of Contents

• Introduction
• What is Agriculture Infrastructure Fund Scheme?
• Key Objectives of the AIF Scheme
• Participating Institutions and Financing Pattern
• Activities to Funded Under the AIF Scheme
• Who will Benefit from the AIF Scheme?
• Benefits of the Agriculture Infrastructure Fund Scheme
• How to Apply for Agriculture Infrastructure Fund Scheme?
• Eligibility Under the AIF Scheme
• Conclusion

Introduction

Agriculture is the backbone of Indian economy. It provides livelihood millions of Indians in rural areas and contributes around one-fifth to India’s national income. But Indian agriculture is marred by inadequate capital investment. As a result, the infrastructure creation in agriculture sector has always been a major concern. Recognising the importance of infrastructure in agriculture development, Indian government launched the Agriculture Infrastructure Fund (AIF) Scheme as Central Sector Scheme. It is one of the top 10 agriculture schemes in the country.

What is Agriculture Infrastructure Fund Scheme?

The Finance Minister of India on 15 May 2020 launched the scheme with a corpus of INR 1 lakh crore to be spent over a period of 10 years for the development of farm-gate or post-harvest infrastructure. It will help farmers to optimally store their produce and get greater value for their farm produce. Overall, it will take the agriculture production dynamics to the next level.

Key Objectives of the AIF Scheme

• It seeks to mobilise medium to long term debt financing facility for investment in community farming assets and post-harvest infrastructure through financial support and incentives.
• It envisions the allocation of INR 1 lakh crore by banks and financial institutions to provide loans with an interest subvention of 3% per annum.
• It extends credit guarantee coverage through the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to INR 2 crores.
• It provides interest subvention of 3% on loan up to INR 2 crores for a maximum of 7 years.
• The scheme is slated to operate from the financial year 2020-21 to 2032-33, with the distribution of loans expected to conclude within a six-year timeframe.

Participating Institutions and Financing Pattern

The financing under the scheme can be availed from following participating institutions:

• Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
• Farmer Producer Organisation (FPOs)
• Scheduled Commercial Banks (SCBs)
• Scheduled Cooperative Banks
• Regional Rural Banks (RRBs)
• Small Finance Banks (SFBs)
• Non-Banking Finance Companies (NBFCs)
• National Cooperative Development Corporation (NCDC)

Activities to Funded Under the AIF Scheme

The AIF scheme envisages to provide infrastructure facilities for following activities:

• Warehouses and Silos
• Pack Houses and Assaying Units
• Supply Chain Platforms, including e-marketing platform
• Logistic Facilities
• Cold Chains and Primary Processing Centres

Who Will Benefit from the AIF Scheme?

The AIF scheme intends to cover following beneficiaries or the people who will benefit from the scheme includes

• Primary Agriculture Credit Societies (PACS)
• Agriculture Produce Marketing Committees (APMCs)
• Farmers Producer Organisation (FPOs)
• Public Private Partnerships sponsored by Centre, State and Local Governments
• Joint Liabilities Groups (JLGs)

Benefits of the Agriculture Infrastructure Fund Scheme

The AIF scheme aims to provide the following benefits:

• Enhanced marketing infrastructure to enable farmers to directly sell to a wider consumer base, thereby increasing value realization and overall income for farmers.
• Investing in logistics infrastructure to reduce post-harvest losses and minimize intermediaries, promoting farmer independence and improving market access.
• Providing access to modern packaging and cold storage systems, empowering farmers to strategically time their market sales and enhance realization.
• Establishing community farming assets to boost productivity and optimize input utilization, resulting in significant cost savings for farmers.
• Directing priority sector lending to currently unviable projects by the government through interest subvention, incentives, and credit guarantees, initiating innovation and private sector investment in agriculture.
• Improving post-harvest infrastructure to reduce national food wastage, enhancing the competitiveness of the agriculture sector on a global scale.
• Providing Credit Guarantee, incentives, and interest subvention to lending institutions, enabling them to lend with lower risk, expanding their customer base and portfolio diversification.

How to Apply for Agriculture Infrastructure Fund Scheme?

Step 01

Apply as a beneficiary by the website and complete the registration process to generate a Beneficiary ID.

Step 02

Download the DPR template from the website. Log in using the Beneficiary ID created in Step 01.

Step 03

After logging in, fill in the project details on the portal and submit the DPR in the specified format along with the application.

Step 04

Following submission, the Ministry of Agriculture & Farmers Welfare will review the application. Eligible applications will be digitally transferred to the selected bank for credit appraisal.

Step 05

The bank will assess the project's viability and sanction it accordingly. The maximum time limit for conveying the decision on the loan application to the applicant is set at 60 days from the date of loan application.

Eligibility Under the AIF Scheme

• Participating lending institutions will determine the eligibility criteria for selecting borrowers based on their own policies, with a focus on the viability of the projects.
• Additionally, 24% of the total grants-in-aid allocated under the scheme should be directed towards SC/ST entrepreneurs (16% for SC and 8% for ST).
• Moreover, lending institutions will ensure prioritized loan coverage for entrepreneurs belonging to women and other marginalized segments of society.

Conclusion

The Agriculture Infrastructure Fund Scheme emerges as a beacon of hope for India's agricultural sector, promising a transformative journey towards self-reliance. By focusing on infrastructure development and encouraging innovation, the scheme lays the groundwork for a resilient and progressive agri-economy.