Agriculture Infrastructure Fund

- The Government of India launched the Central Sector Scheme of financing facility under the Agriculture Infrastructure Fund (AIF) in 2020.
- AIF is a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee.
- AIF aims at bringing farmers & agribusinesses together with newer partnership models emerging for the creation of distributed infra near farm-gate in a hub & spoke model. These assets will enable farmers to get greater value for their produce as they will be able to store and sell at higher prices, reduce wastage, and increase processing and value addition.
- The duration of the scheme is from FY2020 to FY2029 (10 years).
- Under the scheme, Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans with interest subvention of 3% per annum and credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 Crores.

Launched in 2000, CGTMSE makes available collateral-free credit to the micro and small enterprise sector. The corpus of CGTMSE is being contributed by the Government of India and SIDBI in the ratio of 4:1 respectively.

Eligible beneficiaries: Farmers, Farmer Producer Organizations (FPOs), Primary Agricultural Credit Society (PACS), Marketing Cooperative Societies, Self Help Groups (SHGs), Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Start-ups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects.

The Union Cabinet has approved modifications in the guidelines of the Rs 1-lakh-crore Agriculture Infrastructure Fund.
Eligibility to avail loans from AIF has now been extended to state agencies/Agricultural Produce Market Committees (APMCs), national and state federations of cooperatives, federations of farmers producers organisations (FPOs) and federations of self-help groups (SHGs).
If an eligible entity takes up projects in different locations, all such efforts will be eligible for ‘interest subvention’ for loans up to Rs.2 crore. However, there will be a maximum limit of 25 such projects for a private sector unit.

The overall period of the scheme has been extended from 10 years to 13 years up to 2032-33.
So far, the government has sanctioned projects worth Rs 4,300 crore from AIF.

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