What is Agriculture Infrastructure Fund?

Cabinet gave its approval to the following modifications in the Central Sector Scheme of Financing Facility under the ‘Agriculture Infrastructure Fund’:

• Eligibility has now been extended to State Agencies/APMCs, National & State Federations of Cooperatives, Federations of Farmers Producers Organizations (FPOs) and Federations of Self Help Groups (SHGs).
• At present Interest subvention for a loan up to Rs. 2 crore in one location is eligible under the scheme.

1. In case, one eligible entity puts up projects in different locations then all such projects will now be eligible for interest subvention for loans up to Rs. 2 crores.
2. However, for a private sector entity, there will be a limit of a maximum of 25 such projects.
3. This limitation of 25 projects will not be applicable to state agencies, national and state federations of cooperatives, federations of FPOs and federations of SHGs.
4. Location will mean the physical boundary of a village or town having a distinct LGD (Local Government Directory) code. Each of such projects should be in a location having a separate LGD code.

• For APMCs, interest subvention for a loan up to Rs. 2 crores will be provided for each project of different infrastructure types e.g. cold storage, sorting, grading and assaying units, silos, et within the same market yard.
• The power has been delegated to Hon’ble Minister of Agriculture & Farmers Welfare to make necessary changes with regard to the addition or deletion of the beneficiary in such a manner so that the basic spirit of the scheme is not altered
• The period of the financial facility has been extended from 4 to 6 years up to 2025-26 and the overall period of the scheme has been extended from 10 to 13 up to 2032-33.
• The modifications in the Scheme will help to achieve a multiplier effect in generating investments while ensuring that the benefits reach small and marginal farmers. APMC markets are set up to provide market linkages and create an ecosystem of post-harvest public infrastructure open to all farmers.

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Agriculture Infrastructure Fund

• It is a part of the over Rs. 20 lakh crore stimulus package announced in response to the Covid-19 crisis. For FY 2020-2029.
• Aim: To provide medium - long term debt financing facility for investment in viable projects for post-harvest management Infrastructure and community farming assets.
• The funds will be provided for setting up cold stores and chains, warehousing, silos, assaying, grading and packaging units, e-marketing points linked to e-trading platforms and ripening chambers, besides PPP projects for crop aggregation sponsored by central/state/local bodies.
• Financial Support: Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans to Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group (SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs and Central/State agencies or Local Bodies sponsored by Public-Private Partnership Projects.
• Loans will be disbursed in four years starting with a sanction of Rs. 10,000 crore in the current year and Rs. 30,000 crore each in the next three financial years.
• CGTMSE Scheme: A credit guarantee coverage will be available for eligible borrowers from the scheme under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crores.
• In the case of FPOs, the credit guarantee may be availed from the facility created under the FPO promotion scheme.
• The moratorium for repayment may vary subject to a minimum of 6 months and a maximum of 2 years.
• Loans will have interest subvention of 3% per annum up to a limit of Rs. 2 crores. This subvention will be available for a maximum period of seven years.
• The fund will be managed and monitored through an online Management Information System (MIS) platform. It will enable all the qualified entities to apply for loans under the Fund.
• The National, State and District level monitoring committees will be set up to ensure real-time monitoring and effective feed-back.