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Agriculture Infrastructure Fund (AIF): Meaning, Provisions, Features And Challenges

Agriculture Infrastructure

Agriculture Infrastructure Fund (AIF): Meaning, Provisions, Features And Challenges

The Agriculture Infrastructure Fund (AIF), launched for the 2020-2029 financial year, has exceeded the 8000 crore mark. The central government released the fund in July 2020, aiming to provide medium- and long-term debt financing facilities and post-harvest management infrastructure projects.

The government also released guidelines for the fund, which will be provided as packaging units and e-market points linked with e-trading platforms. The AIF offers a 3% interest subvention annually and guaranteed credit with a limit of fees of up to two crore rupees. The AIF is a crucial step toward reducing post-harvest losses, and increasing farmers’ income. However are essential for maximizing its effectiveness.

The loan will be disbursed in four years, starting with a sanction of Rs 10,000 crore in the same year and remaining money available in the next three financial years. The loan’s interest rate will be low for farmers, with a maximum duration of seven years.

The fund features a memorandum of understanding, eligibility and availability, and provision of targets. However, challenges include an inadequate number of farmers’ producer organizations (FPO), lack of capital for FPO, and missing agri-futures market.

The Agriculture Infrastructure Fund (AIF) is a financing facility launched by the Government of India in 2020 to provide medium-to-long-term loans for infrastructure development in the agriculture sector. The objective is to strengthen post-harvest management and build community farming assets to improve farmers’ income and reduce wastage.

Provisions and Features

  • Financial Outlay: ₹1 lakh crore to be disbursed over A on loans up to ₹2 crore for a maximum period of Credit guarantee coverage under for eligible borrowers. Farmers, FPOs (Farmer Producer Organizations), PACS (Primary Agricultural Credit Societies), startups, cooperatives, agribusinesses, and state agencies.
  • Eligible Activities: Includes to minimize post-harvest losses. Managed by with loans sanctioned through scheduled commercial banks, regional rural banks, and cooperative banks. Despite its potential, the fund’s disbursement has been lower than expected due to complex approval processes. Many small and marginal farmers lack awareness or access to information about AIF benefits.
  1. Collateral Requirements: Although credit guarantees are available, some small entities still struggle to secure loans due to rigid bank requirements. Issues like slow down infrastructure development. Effective coordination between AIF and other schemes like PM-Kisan, e-NAM, and Agri-Export Policy is necessary for better impact.

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