A financing facility amounting to Rs 1 lakh crores has been launched by Prime Minister Narendra Modi under Agriculture Infrastructure Fund which is a part of the 20 lakh crore stimulus package announced in response to Covid-19 crisis. The scheme is expected to help farmers, PACS, FPOs, agri-entrepreneurs, etc. build assets for community farming and post-harvest agriculture infrastructure. The government believes that by using the assets, farmers will get better value for their produce as the assets and infrastructure will augment and strengthen their storage capabilities, thus reducing wastage and enabling better processing and sale of the produce.
According to the information disseminated by the Prime Minister’s office, the first sanction of Rs 1000 crores has been made today to 2280 farmer societies, 30 days after the approval of the scheme by the Cabinet. The event conducted through video conference was attended by farmers, FPOs, cooperatives, PACs, and citizens from across the country.
The duration of the agri-infra fund is 10 years. It will provide medium-to-long term debt financing facility for the aforementioned aim of providing financial support for boosting post-harvest infrastructure and building community farming assets till 2029. Under the scheme, the amount of Rs 1 lakh crores will be disbursed in partnership with multiple lending institutions as loans to agri-credit societies, farmer groups, farmer producer organizations, agri-entrepreneurs and agri-tech players.
To ensure that the projects are viable, an interest subvention of 3 percent and a credit guarantee of up to Rs 2 crores will be provided to beneficiaries, as per a PTI report. Borrowers will also be able to avail credit guarantee coverage through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for a loan of up to Rs 2 crores. The fee for the coverage will be bore by the government.
Loans received through the fund could be used for setting up of cold stores and chains, warehousing, silos, assaying, grading, packaging units, e-marketing points linked to e-trading platforms and ripening chambers, apart from PPP projects for crop aggregation. A total of 10000 crores will be disbursed in the current financial year, followed by 30000 crores each for three consecutive years.