AGRICULTURE INFRASTRUCTURE FUND (Syllabus: GS Paper 3 - Agriculture)

Context: Only 15 percent of the Rs 1 lakh crore Agriculture Infrastructure Fund (AIF), launched in 2020 for the development of post-harvest infrastructure, has been disbursed in the first three years.

• According to the information shared by Union agriculture minister in Parliament, Rs 15,448 crore has been disbursed for 27,748 projects until now. And out of this, a total of 19,650 projects worth Rs 9,660 crore (9.66 percent of the total allocation) have been completed.
• Among the 27 states and Union Territories, Madhya Pradesh (MP) utilised the maximum funding of Rs 2,707 crore for 3,909 completed projects. 

• MP was followed by Maharashtra and Uttar Pradesh as distant second and third at Rs 901 crore with 2,424 completed projects and Rs 691 crore for 1,175 projects respectively.

Agriculture Infrastructure Fund (AIF)

• About: It is a central sector scheme that will enable a financing facility of Rs.1 lakh crore for funding agriculture infrastructure projects at farm-gate and aggregation points such as farmers producers organisations, primary agricultural cooperatives, startups and entrepreneurs in the agriculture sector.

• Origin: It was announced in May 2020 under the ambitious Atma Nirbhar Bharat Package as a dedicated Central Government scheme that provides medium-long term credit facility for investment in creation of post-harvest management infrastructure and community farming assets.

• Nodal Ministry: Ministry of Agriculture and Farmers Welfare.

• Benefits:

• Interest subvention: All loans under this financing facility will have an 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.

• Credit guarantee: Credit guarantee coverage will be available for eligible borrowers under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crore. The fee for this coverage will be paid by the Government.

• Moratorium for repayment: Moratorium for repayment under this financing facility may vary subject to a minimum of 6 months and a maximum of 2 years.

• Scheme beneficiaries: Primary Agricultural Credit Society (PACS), FPOs, Marketing Cooperative Societies, Joint Liability Groups (JLG), Self-Help Groups, Multipurpose Cooperative Societies, Startups, agri entrepreneurs, Central/State agency or Local Body sponsored Public-Private Partnership Projects.