What is Agriculture Infrastructure Fund?

Abha Toppo
Abha Toppo

In July 2020, the Union Cabinet approved a new pan India Central Sector Scheme known as ‘Agriculture Infrastructure Fund’. Now let’s understand what exactly this fund is and how it will be useful to the agriculture sector?

Agriculture Infrastructure Fund is basically a medium - long term debt financing facility for investment in viable ventures for post-harvest management infrastructure as well as community farming assets through interest subvention & credit guarantee. The duration of this scheme is from FY2020 to FY2029 i.e. 10 years.

It must be noted that the Central government last week launched the financing facility of Rs one lakh crore under the Agriculture Infrastructure Fund through video conferencing.

Who will be the Intended beneficiaries?

Under the scheme, Rs. 1 Lakh Cr will be offered by banks & financial institutions as loans to the Farmers, Farmer Producers Organizations (FPOs), Self Help Group (SHG), Agri-entrepreneurs, Startups, Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Aggregation Infrastructure Providers & Central/State agency or Local Body sponsored Public-Private Partnership Project.

Benefits of Agriculture Infrastructure Fund

All loans under this financing facility would have interest subvention of 3 percent/ annum up to a limit of Rs 2 cr. The interest subvention would be available for a maximum period of 7 years.

In addition, credit guarantee coverage would be available for eligible borrowers from this financing facility under the Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE) scheme for loan up to Rs. 2 cr.

The fee for this coverage would be given by the Government.

For Farmer Producer Organizations, the credit guarantee could be availed from the facility made under FPO promotion scheme of the Department of Agriculture, Cooperation and Farmers Welfare or DACFW.

The moratorium for repayment under this financing facility could differ subject to a minimum of six months & a maximum of two years.

Like this article?

Hey! I am Abha Toppo. Did you liked this article and have suggestions to improve this article? Mail me your suggestions and feedback.

Share your comments

Subscribe to our Newsletter. You choose the topics of your interest and we'll send you handpicked news and latest updates based on your choice.

Subscribe Newsletters