The Centre has issued guidelines for financing under the recently announced ₹1-lakh crore Agriculture Infrastructure Fund (AIF) scheme, that seeks to facilitate creation and strengthening of post-harvest management and marketing infrastructure across the country.

Under the scheme, ₹1-lakh crore will be provided as loan by banks and financial institutions to farmers, Farmer Producer Organisations (FPOs), Primary Agriculture Co-operative Societies, agri-entrepreneurs, start-ups, and marketing co-operatives, among others, to set up agriculture infrastructure, such as supply chain services, including e-marketing platform, primary processing centres, warehouses, silos, pack houses, assaying units, sorting and grading units, cold chains, logistics facilities and ripening chambers.

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Financing under the AIF will also be extended to viable projects for building community farming assets, such as organic input production, bio-stimulant production units, infrastructure for smart and precision agriculture, projects identified for providing supply chain infrastructure for cluster of crops, including export clusters and projects promoted by central/ state/ local governments of their agencies under public-private partnerships (PPP).

The scheme will be operational from the current financial year till 2029-30. Disbursements will be made in the first four years — ₹10,000 crore in the current fiscal, and ₹30,000 crore each over the next three years. The moratorium for repayment under this scheme may vary from six months to two years, an Agriculture Ministry note said.

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All loans under this financing facility will have an interest subvention of 3 per cent per annum up to a limit of ₹2 crore. This subvention will be available for a maximum period of seven years. For loans above ₹2 crore, the subvention will be limited to ₹2 crore, the Ministry said.

The extent and percentage of funding to private entrepreneurs out of the total financing facility may be fixed by a national-level monitoring committee consisting of officials from the Agriculture Ministry, states and NABARD, that will steer, guide and implement the project.

A Credit Guarantee coverage will be available for eligible borrowers from this financing facility under the Credit Guarantee Fund Trust for Micro and Small Enterprises for loans up to ₹2 crore. The fee for this coverage will be paid by the government.

All scheduled commercial banks, scheduled co-operative banks, regional rural banks, small finance banks, NBFCs, and National Cooperative Development Corporation (NCDC) may participate in this financing facility after signing an MoU with NABARD/Department of Agriculture.

Tentatively six states — Uttar Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Gujarat and West Bengal, are being allocated over half of this ₹1-lakh crore fund. The state-wise allocation has been worked out on the basis of the total value of agriculture and allied sectors of the states.

Allocation for UP has been pegged at ₹12,831 crore, Rajasthan – ₹9,015 crore, Maharashtra – ₹8,460 crore, Madhya Pradesh – ₹7,440 crore, Gujarat – ₹7,282 crore and West Bengal – ₹7,260 crore.

Other states receiving major allocation include Andhra Pradesh – ₹6,540 crore, Tamil Nadu – ₹5,990 crore, Punjab – ₹4,713 crore, Karnataka – ₹4,525 crore, Bihar – ₹3,980 crore, Haryana – ₹3,900 crore and Telangana ₹3,075 crore.

The Agri Infra Fund will be managed and monitored through an online MIS platform, and 24 per cent of the total grant-in-aid under the scheme should be utilised for SC/ST entrepreneurs, it said.

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