AIF Registration

Centre Redesigns Agriculture Infrastructure Fund to Cover FPOs

The centre redesigned the AIF scheme to cover the FPOs (Farmer Producer Organizations) to strengthen the development of the country’s agricultural sector. The redesigning of the Agriculture Infrastructure Fund (AIF) scheme progressively aims at making the AIF more attractive, impactful, and inclusive. The Centre believes these measures not only build a strong agricultural economy but also assist in achieving food security and self-reliance.

Understanding of the Agriculture Infrastructure Fund Scheme

The Agriculture Infrastructure Fund Scheme is a Central Sector Scheme launched in 2020 to ensure the financing of Agri-infra facilities for investing in viable projects. The agriculture infrastructure fund is a medium—to long-term financing facility for post-harvest management infrastructure and community farming assets. Infrastructure is crucial for the development of agriculture.

In 2020, the Prime Minister launched the Agriculture Infrastructure Fund Scheme (AIF). The AIF has supported approximately 6623 warehouses, 688 cold stores, and 21 soil projects. It has also increased the country’s additional storage capacity by around 500 LMT (lakh metric tonnes).

Key Objectives of the Agricultural Infrastructure Fund Scheme

The agriculture infrastructure fund scheme facilitating facility incorporates numerous objectives for all the stakeholders in the agricultural ecosystem. Below provided are some of the key objectives of the agricultural infrastructure fund scheme:

• Address the existing infrastructure gaps
• Mobilize investment in agriculture infrastructure
• Creation of infrastructure at the farm gate
• Long-term debt financing facility for investment
• Credit guarantee coverage
• Interest subvention of 3% per annum
• Leveraging new-age technology (IoT, AI, etc.) in the agriculture sector
• Provide better quality and prices to the stakeholders

Cabinet Redesigns AIF Scheme Expansion: A Strategic Move

On August 28, the Union Cabinet, chaired by Prime Minister Shri Narendra Modi, redesigned for the expansion of the Central Sector Scheme of financing facility under the Agriculture Infrastructure Fund. Redesigning the scheme is an impactful move to enhance and strengthen the country’s agricultural infrastructure/ farming community.

The government’s series of measures mainly aims to expand the scope of eligible projects and integrate additional support measures for a robust agricultural infrastructure ecosystem.

What is the Need for AIF Scheme Expansion?

The Union Cabinet supported the expansion of the AIF scheme to make it more attractive, impactful, and inclusive. The ultimate need for expansion of the AIF Scheme is as explained below:

• To enhance the income generated from the farm;
• To ensure holistic development of farm infrastructure;
• To expand the scope of eligible projects under the AIF scheme;
• To support the farming community in the agriculture sector;
• To foster a robust agricultural infrastructure ecosystem;
• To enhance and strengthen the agriculture infrastructure within the country;
• To improve the country’s agriculture’s growth, productivity, and overall sustainability.

Key Highlights of Agricultural Infrastructure Fund Scheme

The agriculture infrastructure scheme worth Rs. 1 lakh crores have been redesigned to enhance the financial support, security, and creditworthiness of Farmer’s Producers Organizations (FPO). Consider the following key highlights of the expansion made in the agriculture infrastructure fund scheme as discussed below:

Viable Farming Assets

The move allowed all the eligible beneficiaries to create an infrastructure project for building viable community farming assets. The expansion facilitates the development of viable projects that enhance community farming’s capabilities, potentially improving productivity and sustainability within the sector.

Integrated Processing Projects

The agricultural infrastructure fund scheme expansions further integrate the primary and secondary processing projects into the list of eligible activities underlined under the AIF. However, standalone secondary projects are ineligible and remain covered under the Ministry of Food Processing Industries (MoFPI) schemes.

Integration of PM KUSUM Component-A

The expansion made by the Union Cabinet allowed for the integration of the PM KUSUM Component A with AIF for farmers, groups of farmers, farmer producer organizations (FPO), cooperatives, and panchayats. Further, the alignment of these initiatives provides sustainable clean energy solutions for the development of agricultural infrastructure.

Expansion of Credit Guarantee Coverage

In addition to the existing Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the Union Cabinet proposed expanding the AIF credit guarantee coverage through the NABSanrakshan Trustee Company Private Ltd. The expansion intends to enhance the financial stability and creditworthiness of the FPOs and encourage more investment opportunities within the agricultural infrastructure projects.

Producer Companies can leverage the expanded Agricultural Infrastructure Fund Scheme to enhance their farming assets, integrate processing projects, and benefit from extended credit guarantee coverage. Registering as a producer company allows access to these financial and infrastructure benefits, ensuring growth and sustainability.

Impact of AIF Scheme Expansion

The impact of the expansion of the Central Sector Scheme of Agricultural Infrastructure Fund upon the FPOs and other groups of farmers are as discussed below:

Financial Support to FPOs

The expansion of the agriculture infrastructure fund has positively impacted the financial security and creditworthiness of the farmers’ producers’ organizations (FPOs). It substantially provided economic stability, attractive investment opportunities, and access to markets, technology, and other infrastructure to the farmers engaged in the organization.

Focus on Inclusivity and Impact

The principles of inclusivity and impact have made the expansion of the agriculture infrastructure fund. The scheme’s redesign integrates additional supporting measures to foster a robust agricultural ecosystem and broaden the spectrum of farming projects.

Promotes Investment Opportunities

The Centre’s redesigning to expand the agriculture infrastructure projects led to the mobilization of around Rs. 78,596 crore investments within the agriculture sector. Rs. 78,433 crore investments have been mobilized from private entities.

Ensures Employment Generation

Expanding the agriculture infrastructure projects sanctioned under the AIF scheme ensures the generation of more than 8.19 lakh rural employment opportunities, ultimately impacting rural livelihoods.

Increased Scope of Eligible Projects

The expansion of the limit of the agriculture infrastructure fund scheme has also led to an increase in the scope of AIFs, driving significant growth within the agriculture sector.

Conclusion

The Cabinet’s recent decision to redesign the Agri-Infra Fund (AIF) Scheme created more impactful and inclusive Framer’s Producers Organizations (FPOs). Expanding the ambit of the FPOs is considered a significant step towards strengthening the agricultural infrastructure across the country. The changes also markedly increased the range of projects eligible for support under the AIF. Ready to boost your agricultural investment? Take advantage of the expanded Agriculture Infrastructure Fund for FPOs. Visit our website, https://enterslice.com/, now to learn more about how the latest fund redesign can enhance your agricultural portfolio.