Agriculture Infrastructure Fund (AIF)

GS 3 – ECONOMY

Context:

Punjab has successfully utilized its allocation under the Agriculture Infrastructure Fund (AIF) scheme.

Overview of the AIF Scheme

• Launch & Duration: Approved in 2020 as a Central Sector Scheme, running until FY2032.
• Objective: Provides medium to long-term financing for post-harvest management and community farming assets.
• Total Fund Allocation: ₹1 lakh crore, distributed through banks and financial institutions. NABARD provides need-based refinance support to eligible lending entities.

Financial Support Under AIF

• Interest Subvention: 3% interest subvention on eligible loans.
• Credit Guarantee: Loans up to ₹2 crore are backed by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
• Loan Limits:
  • Private entities (farmers, agri-entrepreneurs, startups) can apply for up to 25 projects, each eligible for a ₹2 crore loan.
  • State agencies, cooperatives, FPOs, and SHGs have no limit on the number of projects.

Eligible and Ineligible Entities

• Eligible Beneficiaries: Farmers, FPOs, PACs, SHGs, startups, agri-entrepreneurs, cooperative societies.
• Exclusions: Public Sector Undertakings (PSUs) are not directly eligible but can sponsor projects under Public-Private Partnership (PPP) models.

Scope of Projects Covered

• Post-harvest processing: Includes primary and secondary processing.
• Modern storage facilities: Warehouses, silos, and logistics infrastructure.
• Value addition: Enhancing agricultural produce quality.

Monitoring & Implementation

• Governance Structure: Monitoring committees at district, state, and national levels ensure project execution within 60 days.

Significance of AIF

• Enhances Market Access: Strengthens farmer-market linkages through improved marketing infrastructure.
• Reduces Post-Harvest Losses: Mitigates risks in agribusiness operations.
• Boosts Agribusiness: Supports logistics, cold storage, and agricultural value chains.
• Promotes Exports: Improves sanitary and phytosanitary standards, benefiting organic produce exports.
• Ensures Efficient Execution: Streamlined monitoring facilitates timely project implementation.