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Agriculture Infrastructure Fund

  • IASbaba
  • July 9, 2021
  • 0
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Agriculture Infrastructure Fund

Part of: GS Prelims and GS -II – Policies and interventions

In news: Some modifications were approved by the Union Cabinet in Central Sector Scheme of Financing Facility under ‘Agriculture Infrastructure Fund’.

  • The modifications in the Scheme will help to achieve a multiplier effect in generating investments while ensuring that the benefits reach small and marginal farmers.  

What is Agriculture Infrastructure Fund?

  • It is a Central Sector Scheme under Union Ministry of Agriculture to inject formal credit into farm and farm-processing based activities.
  • It is a part of the over Rs. 20 lakh crore stimulus package announced in response to the Covid-19 crisis.
  • Aim: To provide medium – long term debt financing facility for investment in viable projects for post-harvest management Infrastructure and community farming assets.
    • The funds will be provided for setting up of cold stores and chains, warehousing, silos, assaying, grading and packaging units, e-marketing points linked to e-trading platforms and ripening chambers, besides PPP projects for crop aggregation sponsored by central/state/local bodies.
  • Duration: Financial Year 2020 to 2029.
  • Target Beneficiaries: 
    • 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. 
  • Features:
    • Financial Support: Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans to be provided for Agriculture Infrastructure projects.
    • Interest Subvention: Loans will have interest subvention of 3% per annum up to a limit of Rs. 2 crore. This subvention will be available for a maximum period of seven years.
    • CGTMSE Scheme: A credit guarantee coverage will be available for eligible borrowers from the scheme under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crore.
  • Management: The fund will be managed and monitored through an online Management Information System (MIS) platform.
    • The National, State and District level monitoring committees will be set up to ensure real-time monitoring and effective feed-back.

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