• 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 ‚Äď 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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