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    In the Lok Sabha: Government Reports Significant Progress on Agriculture Infrastructure Fund

    AgricultureAgri-businessIn the Lok Sabha: Government Reports Significant Progress on...
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    In the Lok Sabha: Government Reports Significant Progress on Agriculture Infrastructure Fund

    The Agriculture Infrastructure Fund scheme will remain operational until 2032-33, with loan disbursements set to conclude by 2025-26. The government aims to expand participation, particularly in states and Union Territories with low adoption rates.

    The Minister of State for Agriculture and Farmers’ Welfare, Ramnath Thakur, on Tuesday provided an update on the Agriculture Infrastructure Fund (AIF) in a written reply to the Lok Sabha. The minister highlighted the scheme’s achievements, emphasizing its role in strengthening post-harvest management infrastructure and boosting farmers’ income.

    Launched in 2020-21, the flagship scheme aims to enhance farm-gate storage, logistics, and processing infrastructure, allowing farmers to minimize post-harvest losses and obtain better prices for their produce. Thakur said that, as of January 26, 2025, the scheme has generated more than 9 lakh employment opportunities, with 97 per cent of the projects established in rural areas, fostering rural investment and job creation.

    The government has allocated Rs. 1 Lakh crore through lending institutions for AIF projects, with an interest subvention of 3 per cent per annum on loans up to Rs. 2 crore. The scheme has a total budgetary support of Rs. 10,636 crore, including:

    • Interest Subvention Cost: Rs. 7,907 crore
    • Credit Guarantee Cost: Rs. 2,629 crore
    • Administration Cost of PMU: Rs. 100 crore

    Over the past three years, AIF has sanctioned 55,683 projects with a total funding of Rs. 36,250 crore. The top-performing states include:

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    • Madhya Pradesh: 7,701 projects worth Rs. 5,853 crore
    • Maharashtra: 6,860 projects worth Rs. 4,151 crore
    • Rajasthan: 1,802 projects worth Rs. 2,310 crore
    • Gujarat: 2,072 projects worth Rs. 2,215 crore
    • Uttar Pradesh: 3,854 projects worth Rs. 3,636 crore

    Certain states and Union Territories, such as Nagaland, Mizoram, Sikkim, Ladakh, and Lakshadweep, have yet to secure projects under AIF, highlighting the need for further outreach.

    Impact of AIF

    Thakur cited a study conducted by the Agro Economic Research Centre at Gokhale Institute of Politics and Economics in December 2023, which detailed AIF’s impact:

    1. Employment Boost: More than 9 lakh jobs have been created, with 97 per cent of projects in rural areas.
    2. Storage Expansion: 550 lakh metric tonnes (LMT) of storage capacity have been added, including 510.6 LMT of dry storage and 39.4 LMT of cold storage, preventing food grain losses of up to 20.4 LMT annually.
    3. Value Addition & Loss Reduction: Agro-processing centers have increased farmers’ income by up to 20 per cent while reducing post-harvest losses.
    4. Farm Mechanization: Custom hiring centers established under AIF are improving mechanization and sustainable crop residue management practices.
    5. Government Subsidies: About 31 per cent of AIF units have benefited from additional government subsidies.
    6. Key Role of AIF Loans: For 85 per cent of the beneficiaries, AIF loans were the primary reason for setting up their units.

    Beneficiaries and Loan Structure

    The scheme supports farmers, Farmer Producer Organizations (FPOs), cooperatives, start-ups, and public-private partnerships. Funding is available through scheduled commercial banks, cooperative banks, regional rural banks, small finance banks, NBFCs, and the National Cooperative Development Corporation (NCDC). NABARD provides refinancing support when needed.

    Eligible projects include warehouses, silos, cold chains, logistics facilities, and smart precision agriculture infrastructure. Loan applicants must contribute at least 10 per cent of the project cost, and an entity can apply for up to 25 projects, each eligible for a loan of up to Rs. 2 crore.

    To promote inclusivity, 24 per cent of total grants-in-aid are allocated for SC/ST entrepreneurs (16 per cent for SC and 8 per cent for ST). Additionally, women and marginalized groups receive priority in loan disbursement.

    The AIF scheme will remain operational until 2032-33, with loan disbursements set to conclude by 2025-26. The government aims to expand participation, particularly in states and Union Territories with low adoption rates. Awareness initiatives will be crucial in ensuring accessibility for marginalized farming communities.

    The Agriculture Infrastructure Fund is playing a pivotal role in transforming India’s agricultural sector. By reducing post-harvest losses, enhancing storage capacity, and increasing farmers’ earnings, AIF is fostering rural development and food security. As the program progresses, continuous evaluation and policy refinements will be key to maximizing its impact on India’s agricultural landscape.

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