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.
- 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.
Agriculture Infrastructure Fund (AIF) is a dedicated initiative by the Government to boost investments in the agricultural sector. The fund is designed to support infrastructure projects such as cold storage, warehousing, processing facilities, and agri-logistics, with the aim of modernizing supply chains and reducing post-harvest losses. By providing financial backing and risk mitigation measures, AIF encourages both public and private investments, ultimately benefiting farmers, agri-businesses, and consumers.
The fund offers a range of provisions including concessional finance, structured loans, and grant-based support for eligible projects. It focuses on creating efficient agri-value chains that improve market access, reduce wastage, and enhance competitiveness. AIF also promotes innovation by of modern technologies in storage, processing, and transportation, thereby increasing productivity and ensuring sustainable growth in the sector.
Key features of AIF include its broad coverage, addressing both rural and urban infrastructure requirements, and its emphasis By leveraging public funds alongside agricultural development. Moreover, the fund is expected to spur rural development by generating employment.
To realize its full potential, effective coordination among government agencies, financial institutions, and private stakeholders is essential. Continuous monitoring, timely interventions, and policy reforms will further enhance the fund’s impact, ensuring robust development and a transformative boost for India’s agricultural landscape. This strategic approach will secure long-term, sustainable benefits.
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