National Agriculture Infra Financing Facility
The role of infrastructure is crucial for agriculture development and for taking the production dynamics to the next level. It is only through the development of infrastructure, especially at the post-harvest stage that the product can be optimally utilized with opportunity for value addition and a fair deal for the farmers. Development of such infrastructure shall also address the vagaries of nature, the regional disparities, the development of human resources, and the realization of the full potential of our limited land resources.
Role of Infrastructure
The role of infrastructure is crucial for agriculture development and for taking the production dynamics to the next level. It is only through the development of infrastructure, especially at the post-harvest stage that the product can be optimally utilized with opportunity for value addition and a fair deal for the farmers. Development of such infrastructure shall also address the vagaries of nature, the regional disparities, the development of human resources, and the realization of the full potential of our limited land resources.
Financing Facility of Rs. 1,00,000 crore
Finance Minister announced on 15.05.2020, a 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers. Financing facility of Rs. 1,00,000 crore will be provided for funding Agriculture Infrastructure Projects at farm-gate & aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Agriculture entrepreneurs, Start-ups, etc.). The impetus for the development of farm gate & aggregation point, affordable and financially viable Post Harvest Management infrastructure.
Accordingly, DA&FW has formulated the Central Sector Scheme to mobilize a medium - long term debt financing facility for investment in viable projects relating to postharvest management Infrastructure and community farming assets through incentives and financial support.
Subsequently, in the budget announcement made on 01.02.2021, it was decided to extend the benefit of the scheme to APMCs. Accordingly, modifications in the scheme were carried out with the approval of the Cabinet to make it more inclusive.
Credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for loans up to ₹ 2 crores. The fee for this coverage will be paid by the Government. In the case of FPOs, the credit guarantee may be availed from the facility created under the FPO promotion scheme of DA&FW.
All loans under this financing facility will have an interest subvention of 3% per annum up to a limit of ₹ 2 crores. This subvention will be available for a maximum period of 7 years. In the case of loans beyond ₹ 2 crores, then interest subvention will be limited up to ₹ 2 crores. The extent and percentage of funding to private entrepreneurs out of the total financing facility may be fixed by the National Monitoring Committee.
The Scheme is operational from 2020-21 to 2032-33. Loan disbursement under the scheme will complete in six years.
