Agriculture Infrastructure Fund

• 09 Jul 2020

Why in News

Recently, the Union Cabinet has given approval to a pan India central sector scheme i.e. Agriculture Infrastructure Fund, 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.
• The Union Cabinet has also approved amendment to the Essential Commodities Act (ESA), 1955.

Key Points

• 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.
• Features:
  
  • Financial Support: Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans to Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers Organizations (FPOs), Self Help Group (SHG), Farmers, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs and Central/State agencies or Local Bodies sponsored by Public Private Partnership Projects.
    
    • Loans will be disbursed in four years starting with sanction of Rs. 10,000 crore in the current year and Rs. 30,000 crore each in next three financial years.
    • Moratorium for repayment may vary subject to minimum of 6 months and maximum of 2 years.
  • 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.
  • Farmer Producer Organizations: In case of FPOs the credit guarantee may be availed from the facility created under FPO promotion scheme.
• Management: The fund will be managed and monitored through an online Management Information System (MIS) platform. It will enable all the qualified entities to apply for loan under the Fund.
  
  • The National, State and District level monitoring committees will be set up to ensure real-time monitoring and effective feed-back.

Source: PIB