• It is a Central Sector Scheme approved by the Union Cabinet in 2020.
  • It aims to provide a 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 of 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.
  • The duration of the Scheme shall be from FY 2020 to FY 2032.
  • Power has been delegated to Union Agriculture Minister to make necessary changes with regard to addition ordeletion of beneficiary.
  • Eligible beneficiaries include farmers, FPOs, PACS, Marketing Cooperative Societies, SHGs, Joint Liability Groups, Agri-entrepreneurs, Start-ups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects.
  • Features:
    • 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 sanction of Rs. 10,000 crore in the current year and Rs. 30,000 crore each in next three financial years.
      • Moratorium for repayment may vary subject to minimum of 6 months and maximum of 2 years.
    • Interest Subvention: Loans will have interest subvention of 3% per annum up to a limit of Rs. 2 crore. This subvention will be available for a maximum period of seven 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 crore.
    • Farmer Producer Organizations: In case of FPOs the credit guarantee may be availed from the facility created under FPO promotion scheme.
  • Management: 
    • 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 loan under the Fund.
      • The National, State and District level monitoring committees will be set up to ensure real-time monitoring and effective feed-back.
  • Limitation – However, for a private sector entity there will be a limit of a maximum of 25 such projects.
    • This limitation will not be applicable to state agencies, national and state federations of cooperatives, federations of FPOs and federation of SHGs.
  • Location will mean 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.
  • It also provides targeting State-specific APMCs and maintenance of sanitary and phytosanitary standards for organic produce marketing and exports.
  • District, state or national level monitoring committees will reduce the turnaround time for file processing to less than 60 days.
  • The scheme tries to mitigate spatial and temporal risks in the agribusiness ecosystem through adequate postharvest infrastructure facilities.

Need for Agriculture Infrastructure Fund

  • For approximately 58% of the people of the country, agriculture and allied activities are the chief sources of income.
  • About 85% of farmers manage 45% of the agricultural land, being smallholder farmers (less than 2 hectares of land under cultivation). As such, the annual incomes of most of the farmers in the country are low.
  • Low connectivity and limited infrastructure connecting farmers and markets mean that 15 – 20% of the output is wasted, which is much higher than in other countries. Investment in agriculture has also been stagnant. 
  • All the above factors mean that a scheme dedicated to improving post-harvest management infrastructure and farming infrastructure is the need of the hour.

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