How The Government is Investing In The Future Of Indian Agriculture With The Agricultural Infrastructure Scheme

The recently introduced Agriculture Infrastructure Fund (AIF) government scheme aims to address the issue of lack of financial stability and support in agriculture, by reworking debt financing and loans to set up post-harvest facilities and community farming assets.

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What Is The AIF Scheme?

The AIF is a financing facility that was established by the Ministry of Agriculture and Farmers Welfare. It is a form of government loan scheme that aims to provide affordable loan facilities to eligible farmers through interest grants and credit.

The scheme was implemented in 2020 and will continue till the year 2032, to develop technology and machinery in the agriculture field, as well as common facilities that serve groups of farmers.

Projects backed by public-private partnerships as well as state and central agencies are also under the financing of AIF. Aiming for agriculture to be backed up by all the powerhouses for a greater future.

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Key Project Areas Of The AIF

There are two main categories of projects covered by the AIF:

• Individual projects: This includes activities like on-farm crop storage structures, organic input production units, agro-processing units, and equipment banks. Emerging technologies such as sensor-based farming, and artificial intelligence, help in modernising and revolutionizing the agriculture sector

• Community projects: Cooperative societies, farmer-producer organizations (FPOs), and self-help groups can seek loans to set up common infrastructure like pulping, drying and grading units, greenhouse farming, and logistics facilities. Loans provided can help the farmers significantly and help improve harvest as well.

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Benefits For Borrowers In The AIF Scheme

The AIF offers attractive terms for eligible farmers and enterprises:

• Interest subvention of 3% for loans up to Rs. 2 crore, with subvention provided for 7 years.

• Credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 crore, with the guarantee fee paid by the government.

• The suspension period on repayment ranges from 6 months to 2 years.

• Relaxed collateral requirements for FPOs and farmer groups.

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How To Apply?

Applications for AIF loans are made through:

• participating banks, financial institutions and cooperative credit societies.
• Applicants need to submit documents verifying their identity, land records, income details, and project proposals.
• The process can now be completed fully online through a portal.
• Final sanctions will be issued based on an appraisal of viability by the lending institution.

Conclusion

The AIF is a timely and well-structured initiative to bolster agricultural productivity through targeted infrastructure investments.

With its scope covering vital pre- and post-harvest supply chain gaps, the fund has the potential for high impact if implemented effectively to reach peasants at the last mile. It could go a long way in modernising India's farms by facilitating access to credit, assets, and markets for millions of rural families.

Potential applicants can reach out to the helpline number at 011-23604888 for further inquiries or visit https://agriinfra.dac.gov.in for further information.