TAG: GS 3: ECONOMY
THE CONTEXT: The Union Cabinet, in a significant policy shift recently, announced the expansion of the Agricultural Infrastructure Fund (AIF).
EXPLANATION:
- This scheme, valued at ₹1 lakh crore, will now encompass financial support for Farmers’ Producers Organisations (FPOs).
- This move is aimed at enhancing the financial security and creditworthiness of FPOs, thereby strengthening the agricultural infrastructure in India.
Key Features of the AIF Expansion
- Financial Support for FPOs
- The redesign of the AIF to include FPOs is expected to provide a substantial boost to these organizations.
- By extending financial support to FPOs, the government aims to enhance their financial stability, making them more attractive to investors and improving their creditworthiness.
- This, in turn, is expected to result in better access to markets, technology, and infrastructure for farmers who are part of these organizations.
- Focus on Inclusivity and Impact
- The Centre’s decision to expand the AIF is guided by the principles of inclusivity and impact.
- The revised scheme is designed to be more attractive to stakeholders, ensuring that a broader spectrum of agricultural projects can benefit.
- The government emphasized that these initiatives are not just about expanding the scope of eligible projects but also about integrating additional supportive measures that can foster a robust agricultural infrastructure ecosystem.
- Investment and Employment Generation
- To date, the AIF has sanctioned ₹47,575 crore for 74,508 projects. These projects have mobilized an investment of ₹78,596 crore in the agriculture sector.
- Notably, out of this total investment, ₹78,433 crore has been mobilized from private entities, underscoring the strong involvement of private players in enhancing agricultural infrastructure.
- The infrastructure projects sanctioned under AIF have played a pivotal role in generating more than 8.19 lakh rural employment opportunities, showcasing the scheme’s direct impact on rural livelihoods.
Objectives of the AIF Expansion
- The expanded scope of the AIF is expected to drive significant growth in the agricultural sector.
- By providing financial support to FPOs and other stakeholders, the scheme aims to improve agricultural productivity, enhance farm incomes, and contribute to the overall sustainability of agriculture in the country.
- The Centre believes that these measures will not only bolster the agricultural economy but also help in achieving food security and self-reliance.
- The government’s vision for the AIF expansion is to build a sustainable and resilient agricultural infrastructure ecosystem.
- By supporting a wide range of projects, including post-harvest management, storage, and processing facilities, the scheme aims to reduce post-harvest losses, improve supply chain efficiency, and ensure that farmers receive fair prices for their produce.
- This holistic approach is expected to create a more sustainable agricultural sector that can withstand market fluctuations and climatic challenges.
Agricultural Infrastructure Fund (AIF) Scheme
- It is a Central Sector Scheme which was launched in 2020.
- The scheme shall provide a medium- to long-term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support.
- The duration of the Scheme shall be from FY2020 to FY2032 (10 years).
- Who are eligible?
- Primary Agricultural Credit Societies (PACS)
- Marketing Cooperative Societies
- Farmer Producers Organizations (FPOs)
- Farmers
- Self Help Group (SHG)
- Joint Liability Groups (JLG)
- Multipurpose Cooperative Societies
- Agri-entrepreneurs and Startups
- Central/State agency or Local Body sponsored Public-Private Partnership Projects.
- Public Sector Undertakings (PSU’s) are directly not eligible under the scheme, but projects sponsored by the munder PPP are eligible.
- All scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), and National Cooperative Development Corporation (NCDC) may participate to provide this financing facility.