Current AffairsEconomics

Agriculture Infrastructure Fund (AIF) Schemes

The Centre has decided to allow state-run market yards to access financing facilities through its Agricultural Infrastructure Fund to calm the fears of protesting farmers that such market yards are being weakened

About AIF?

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.

Target beneficiaries

The beneficiaries will include farmers:

  • PACS, Marketing Cooperative Societies, FPOs, SHGs, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects

What are the new changes?

  • The Union Cabinet decided to extend the AIF to State agencies and Agricultural Produce Marketing Committees (APMCs), as well as federations of cooperative organizations, Farmers Producers Organizations and self-help groups.
  • They will now be eligible for interest subvention for loans up to ₹2 crores, with APMCs allowed to access separate loans for different kinds of infrastructure projects to build cold storage, silos, sorting, grading and assaying units in their market yards.
  • The scheme has also been extended to 2032-33.


Tags: Current Affairs, Economics

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