Agriculture Infrastructure Fund (AIF)

The Agriculture Infrastructure Fund (AIF) was announced in May 2020 by the Government of India for farm-gate infrastructure for farmers. Government schemes, especially for the agriculture sector, are important for the UPSC exam prelims and mains. In this article, you can get all the relevant information on the Agriculture Infrastructure Fund.

What is the Agriculture Infrastructure Fund?

Agriculture Infrastructure Fund 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.

The scheme provides medium to long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support/credit guarantee.

It is meant for building processing and storage facilities, and for helping farmers, FPOs, etc. build post-harvest agriculture infrastructure and community farming assets.

These facilities should help farmers get a higher price for their produce as they will be able to reduce wastage, store, process and give value addition to their products.

The scheme was initially set to run for ten years from 2020 to 2029. But, it has been extended by three years till 2032-33 in July 2021.

Under this, banks and financial institutions provide loans with an interest subvention of 3% per annum.

The scheme also entails providing credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 Crore.

NABARD will steer this initiative in association with the Ministry of Agriculture and Farmers’ Welfare. Read more on NABARD.

For APMCs, interest subvention for a loan up to Rs. 2 crore will be provided for each project of different infrastructure types e.g. cold storage, sorting, grading and assaying units, silos, etc. within the same market yard.

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.


 

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