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Home » The need for the Agriculture Infrastructure Fund: Objective, benefits and the Key features

The need for the Agriculture Infrastructure Fund: Objective, benefits and the Key features

Agriculture Infrastructure Fund

Agriculture Infrastructure Fund: The programme aims to offer a medium-long term debt financing facility for investments in workable post-harvest infrastructure projects and community farming assets through interest subsidy and financial support.

The foundation of the Indian economy is agriculture, which makes a significant contribution to it. It not only promotes economic expansion but also assists with employment creation. The development of agriculture and increasing the degree of production dynamics both depend critically on infrastructure. Construction of infrastructure, particularly in the post-harvest phase, is the only method to use the food as efficiently as possible while offering the possibility of value addition and a fair deal for the farmers.

Such infrastructure development must also take into account the changing colours of nature, regional variations, the increase of human resources, and the efficient use of our limited land resources.

The programme comprises projects for post-harvest management such as supply chain services like e-marketing platforms, warehouses, silos, packhouses, assaying units, sorting & grading units, cold chain, logistics facilities, primary processing centres, ripening chambers, and other suitable projects for creating community agricultural assets like organic input production, bio-stimulant production units, infrastructure for smart and precision agriculture, supply chain infra, and so on.

What is the Purpose of the Agricultural Infrastructure Fund?

The agriculture infrastructure fund is established to construct cold storage, warehouses, silos, packing units, assaying/grading, logistics facilities, main processing centres, packing units, ripening chambers/waxing plants, etc.

The Agriculture Infrastructure Fund (AIF) initiative aims to mobilise a medium-long term debt financing facility for investment in financially sound projects for community farming assets and post-harvest management infrastructure through incentives and financial support to enhance agriculture infrastructure in the country.

Benefits of the Scheme: Following are some of the benefits of the Agriculture Infrastructure Fund

Interest on all loans made using this financing facility would be subsidised by 3% annually, up to a maximum of Rs. 2 crores. It will be possible to receive this subsidy for a maximum of seven years.

Additionally, under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, qualifying borrowers from this financing facility will have access to credit guarantee coverage for loans up to Rs. 2 crores. The Government will bear the cost of this coverage.

For FPOs, the facility established under the Department of Agriculture, Cooperation & Farmers Welfare’s FPO Promotion Scheme may be used to obtain the credit guarantee (DACFW).

Key Features of agriculture Infrastructure Fund

Under the agriculture infrastructure Fund, there will be a 3% annual interest subvention on all loans up to a maximum of 2 crores.

The interest subvention is only available for loans up to a maximum of Rs. 2 crores.

This subsidy will be offered for a maximum of seven years. • The moratorium period might last up to two years and varies from project to project.

The moratorium might last no more than two years and varies depending on the project.

The interest subsidy will be available for a maximum of seven years, including the moratorium period.

A candidate may submit up to 25 projects, each of which is qualified for a loan under the programme of up to Rs. 2 crores and may be installed in up to 25 different locations.

The restriction of only 25 projects does not apply to state agencies, national and state federations of cooperatives, federations of FPOs, and federations of SHGs.

The moratorium period will vary from project to project and up to a maximum period of two years.

The length of the moratorium varies from project to project and is limited to a maximum of two years.

Including the moratorium period, the interest subsidy will be offered for a maximum of seven years.

An applicant may submit up to 25 projects, each of which is eligible for a loan of up to Rs. 2 crores under the programme and may be placed in up to 25 different places.

State agencies, national and state federations of cooperatives, federations of FPOs, and federations of SHGs are exempt from the restriction of 25 projects

A physical town or village boundary with a unique LGD (Local Government Directory) number is referred to as having a “different location.”Each of these projects ought to be located in a place with its LGD (Local Government Directory) Code.

Within their defined market region, APMCs are qualified to participate in a variety of projects (including various forms of infrastructure).

There is no minimum or maximum loan cap under the programme.

The maximum loan benefit available to an eligible beneficiary is 2 crores per project.

Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) plan, credit guarantee coverage will be offered to qualified borrowers from this financing facility for loans up to Rs. 2 crores.

The Government will bear the cost of this coverage.

For FPOs, the facility established under the DA&FW FPO promotion plan may be used to get the credit guarantee.

The maximum rate of interest will be 06 monthly/annual MCLR plus 100 basis points (floating), up to a maximum of 9.00%, as per the MoUs signed with lending institutions (whichever is lower).

For each project including various infrastructure types, such as cold storage, sorting, grading, assaying units, silos, etc., inside the same market yard, APMCs will receive an interest subsidy for a loan of up to Rs. 2 crores.

Due to the ability to store, process, and add value to their crops, these facilities should enable farmers to sell their harvest for a greater price.

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