Understanding the Agri-Infrastructure Fund (AIF)

Understanding the Agri-Infrastructure Fund (AIF)

The Agri-Infrastructure Fund (AIF), launched in May 2020, is a significant initiative aimed at upgrading post-harvest infrastructure across India. With an impressive budget of ₹58,000 crore, the fund has approved over 92,000 projects to date.

Investment Mobilization

Since its inception, the AIF has successfully mobilized investments totaling ₹91,856 crore. This financial backing empowers various stakeholders in the agricultural sector, providing loans of up to ₹2 crore. The fund also offers a 3% interest subvention for beneficiaries, along with credit guarantee reimbursement, making it an attractive option for those looking to invest in agricultural infrastructure.

Objectives and Benefits

The primary goal of the AIF is to significantly reduce post-harvest losses, which can severely impact farmers' incomes. By improving rural logistics and market connectivity, AIF aims to create a more robust agricultural ecosystem that benefits both farmers and entrepreneurs.

• Enhanced Infrastructure: The fund focuses on developing essential post-harvest facilities such as warehouses and cold storage units.
• Reduced Losses: By strengthening the supply chain, AIF aims to save approximately 1.86 million tonnes of post-harvest losses annually.
• Market Access: Improved logistics will empower farmers to sell their products directly, increasing their profit margins.
• Support for Entrepreneurs: Organizations and farmer groups engaged in rural industrialization can also benefit from the fund.

Financial Assistance Offered

The AIF provides substantial financial benefits to its beneficiaries:

• Loans of up to ₹2 crore with a repayment period of 7 years.
• A 3% interest subvention, capped at 9%.
• Reimbursement of credit guarantee fees paid by banks.

Eligibility Criteria

Entrepreneurs, farmer organizations, and various entities focusing on rural industrialization and post-harvest logistics can avail themselves of the AIF benefits. This broad eligibility ensures that a wide range of stakeholders can contribute to and benefit from agricultural development.

Projected Impact

The AIF is expected to bring about significant changes in the agricultural landscape:

• Annual savings of 1.86 million tonnes in post-harvest losses.
• Strengthened market connectivity, which allows farmers to engage directly with consumers.
• Collaboration with other government schemes like PM-KUSUM and Pradhan Mantri Formalisation of Micro Food Processing Enterprises for enhanced sustainability.

Frequently Asked Questions (FAQs)

Q1. What is the objective of the Agri-Infrastructure Fund (AIF)?
Answer: The AIF aims to develop post-harvest infrastructure like warehouses, cold stores, and logistics to reduce losses, increase farmer incomes, and support entrepreneurs.

Q2. How much investment has been mobilized under the scheme?
Answer: ₹91,856 crore has been mobilized for over 92,000 projects since AIF’s inception, enhancing agricultural infrastructure.

Q3. What are the financial benefits offered by the AIF?
Answer: The AIF offers loans up to ₹2 crore with a 7-year repayment period, 3% interest subvention, and credit guarantee fee reimbursement.

Q4. Who can avail the benefits of AIF?
Answer: Entrepreneurs, farmer groups, and organizations focusing on rural industrialization and post-harvest logistics are eligible for AIF benefits.

Q5. What are the projected benefits of AIF?
Answer: The AIF is projected to save 1.86 million tonnes of post-harvest losses annually and enhance market connectivity for farmers.

UPSC Practice MCQs

Question 1: What is the primary aim of the Agri-Infrastructure Fund (AIF)?
A) To provide direct subsidies to farmers
B) To enhance post-harvest infrastructure
C) To fund agricultural research
D) To regulate agricultural prices
Correct Answer: B

Question 2: How much can an individual borrow from the AIF?
A) ₹1 crore
B) ₹2 crore
C) ₹5 crore
D) ₹10 crore
Correct Answer: B

Question 3: What is the interest subvention offered by AIF?
A) 1%
B) 2%
C) 3%
D) 4%
Correct Answer: C

Question 4: Who is eligible to benefit from the AIF?
A) Only large corporations
B) Only individual farmers
C) Entrepreneurs and farmer groups
D) Only government agencies
Correct Answer: C

Question 5: What is one of the expected impacts of the AIF?
A) Increased urban migration
B) Enhanced market connectivity for farmers
C) Reduction in agricultural exports
D) Decrease in rural employment
Correct Answer: B