Agriculture Infrastructure Fund in India, Know More About It

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Agriculture Infrastructure Fund

Agriculture Infrastructure Fund: In a significant move towards bolstering agricultural infrastructure and empowering farmers, a new financing facility has been introduced. This scheme aims to provide financial support for Agriculture Infrastructure Projects at various stages including farm-gate and aggregation points. Let’s delve into the details of this initiative.

Overview table of Agriculture Infrastructure Fund

Aspect	Details
Eligible Participants	Agri-entrepreneurs, farmers, Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Start-ups, state agencies, state-sponsored Public-Private partnerships.
Participating Entities	Scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), National Cooperative Development Corporation (NCDC).
Objective	Provide medium to long-term debt financing for investment in viable projects focusing on post-harvest management infrastructure and community farming assets.
Project Coverage	Includes supply chain services, warehouse facilities, cold chain infrastructure, primary processing centers, and more. Also supports the development of community farming assets such as organic input production.
Interest Subvention	3% per annum for loans up to ₹ 2 crores, for a maximum period of 7 years.
Scheme Duration	Operational from 2020-21 to 2032-33.
Loan Disbursement Period	Scheduled to be completed within six years, by the end of the Financial Year 2025-26.
Inclusive Benefits	Enhanced marketing infrastructure, reduced post-harvest losses, improved storage facilities, savings through community farming assets, promotion of priority sector lending, reduction in food wastage, facilitation of PPP projects, lower risk lending, larger role for cooperative banks and RRBs.
Eligibility Criteria	Determined by participating lending institutions. A portion of grants earmarked for SC/ST entrepreneurs, with emphasis on coverage of women and other weaker segments of society.
Exclusions	Public Sector Undertakings (PSUs) directly ineligible, although PPP projects sponsored by them are eligible.

Key Features of the Financing Facility

Eligible Participants: The financing facility targets a wide range of beneficiaries including agri-entrepreneurs, farmers, Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Start-ups, state agencies, and state-sponsored Public-Private partnerships.
Participating Entities: Scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), and the National Cooperative Development Corporation (NCDC) are encouraged to participate. This involvement requires the signing of a Memorandum of Understanding (MoU) with National Bank for Agriculture & Rural Development (NABARD)/Department of Agriculture & Farmers Welfare (DA&FW).
Objective: The primary objective of this scheme is to provide medium to long-term debt financing for investment in viable projects focusing on post-harvest management infrastructure and community farming assets. This support aims to enhance agriculture infrastructure across the country.
Project Coverage: The scheme covers a wide array of post-harvest management projects including supply chain services, warehouse facilities, cold chain infrastructure, primary processing centers, and more. Additionally, it supports the development of community farming assets such as organic input production and infrastructure for smart agriculture.
Interest Subvention: Loans under this scheme, up to a limit of ₹ 2 crores, will benefit from an interest subvention of 3% per annum for a maximum period of 7 years.

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Scheme Duration and Disbursement

Operational Period: The scheme will be operational from 2020-21 to 2032-33, allowing for an extensive timeline for implementation and impact.
Loan Disbursement: Loan disbursement under the scheme is scheduled to be completed within six years, by the end of the Financial Year 2025-26.

Inclusive Benefits of the Scheme

Enhanced Marketing Infrastructure: Improved marketing infrastructure facilitates direct sales from farmers to consumers, thereby increasing farmers’ value realization and overall income.
Reduced Post-Harvest Losses: Investments in logistics infrastructure aim to minimize post-harvest losses and reduce the involvement of intermediaries, empowering farmers and improving market access.
Improved Storage Facilities: Modern packaging and cold storage systems enable farmers to make informed decisions about when to sell their produce, leading to improved realization.
Savings through Community Farming Assets: Community farming assets contribute to improved productivity and optimization of inputs, resulting in substantial savings for farmers.
Promotion of Priority Sector Lending: Government support through interest subvention and incentives encourages investment in currently unviable projects, fostering innovation and private sector participation in agriculture.
Reduction in Food Wastage: Improved post-harvest infrastructure aids in reducing national food wastage, making the agriculture sector more competitive globally.
Facilitation of PPP Projects: Government agencies and local bodies can structure viable Public-Private Partnership (PPP) projects, attracting investment in agriculture infrastructure.
Lower Risk Lending: Credit guarantee, incentives, and interest subvention reduce the risk for lending institutions, enlarging their customer base and diversifying their portfolio.
Role of Cooperative Banks and RRBs: Refinance facilities enable a larger role for cooperative banks and Regional Rural Banks (RRBs) in facilitating agricultural financing.

Eligibility Criteria

Selection Criteria: Participating lending institutions will determine the eligibility criteria for borrowers based on their own policies, ensuring the viability of projects.
Inclusive Approach: A portion of the grants is earmarked for SC/ST entrepreneurs, with additional emphasis on ensuring adequate coverage of women and other weaker segments of society.

Exclusions

PSU Exclusion: Public Sector Undertakings (PSUs) are not directly eligible under the scheme, although projects sponsored by them under Public-Private Partnerships (PPP) are eligible.

Application Process for Agriculture Infrastructure Fund

The application process for availing the benefits of this scheme is facilitated through an online portal. Here’s a step-by-step guide:

Beneficiary Registration: Apply as a beneficiary on the designated website and complete registration to generate a Beneficiary ID.
Submission of DPR: Download the Detailed Project Report (DPR) template from the website and fill in the project details. Submit the DPR in the prescribed format through the portal.
Review and Appraisal: The Ministry of Agriculture & Farmers Welfare will review the applications. Eligible applications will be digitally transferred to the selected bank for credit appraisal.
Loan Sanction: The selected bank will review the project for viability and sanction the loan. The decision on the loan application will be conveyed within a maximum period of 60 days from the date of application.

Documents Required

The following documents are necessary for the application process:

1) Bank’s loan application form / Customer Request Letter for AIF Loan duly filled and signed

2) Passport size photographs of the promoter/partners/director

3) Identity proof – Voter ID card/PAN card/Aadhaar card/Driving license

4) Address Proof :

• Residence: Voter ID card/Passport/Aadhaar card/Driving license/Electricity Bill/Latest property Tax Bill

• Business Office/Registered Office: Electricity Bill/Latest Property Tax Receipt/Certificate of Incorporation in case of Companies/Certificate of Registration in ca of partnership Firms

5) Proof of Registration:

• In case of Company : Article of Association

• In case of Partnership : Certificate of Registration of Firm with Registrar of Firm

• In case of MSMEs : Certificate of Registration with District Industries Centre (DIC)/Udyog Aadhar Copy

6) Income Tax Return for last three years, If available.

7) Audited Balance Sheet of last 3 Years, If available.

8) GST Certificate, if applicable.

9) Land ownership records – title deed/lease deed. If applicable, then Permission to mortgage the Immovable Property from the Lessor in case the Property is Leasehold (for primary security)

10) ROC Search Report of the Company

11) KYC documents of the promoter/firm/company

12) Copy of Bank Statement for last one year (If available)

13) Repayment track record of existing loans (Loan Statement)

14) Net Worth Statements of promoter

15) Detailed Project Report

16) As applicable – Local authority permissions, Layout plans/estimates, Building sanction

Conclusion: Agriculture Infrastructure Fund

The introduction of this financing facility marks a significant step towards revolutionizing agriculture infrastructure in India. By providing financial support to various stakeholders and promoting inclusive growth, the scheme aims to enhance the competitiveness and sustainability of the agriculture sector. Through streamlined processes and inclusive policies, it sets the stage for a brighter future for farmers and agri-entrepreneurs across the country.

Frequently Asked Questions

Q1) Who can apply for the Agriculture Infrastructure Fund?

Ans: Eligible participants for the Agriculture Infrastructure Fund include a wide range of beneficiaries such as agri-entrepreneurs, farmers, Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Start-ups, state agencies, and state-sponsored Public-Private partnerships.

Q2) What types of projects does the financing facility cover?

Ans: The financing facility covers various stages of Agriculture Infrastructure Projects including farm-gate and aggregation points. It supports projects focusing on post-harvest management infrastructure and community farming assets, such as supply chain services, warehouse facilities, cold chain infrastructure, primary processing centers, and more.

Q3) What are the benefits of the Agriculture Infrastructure Fund scheme?

Ans: The scheme aims to enhance marketing infrastructure, reduce post-harvest losses, improve storage facilities, promote savings through community farming assets, facilitate PPP projects, reduce food wastage, and lower risk lending for financial institutions, among other benefits.

Q4) How long is the scheme operational, and what is the duration for loan disbursement?

Ans: The Agriculture Infrastructure Fund scheme is operational from 2020-21 to 2032-33. Loan disbursement under the scheme is scheduled to be completed within six years, by the end of the Financial Year 2025-26.

Q5) What is the application process for availing benefits under the Agriculture Infrastructure Fund?

Ans: The application process involves beneficiary registration, submission of a Detailed Project Report (DPR), review and appraisal by the Ministry of Agriculture & Farmers Welfare, and loan sanction by the selected bank. The application process is facilitated through an online portal.

Priti Palit

Priti Palit, an accomplished edtech writer, boasts a wealth of experience in preparing candidates for multiple government exams. With a passion for education and a keen eye for detail, she has contributed significantly to the field of online learning. Priti’s expertise and dedication continue to empower aspiring individuals in their pursuit of success in government examinations.

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