Agriculture Minister Narendra Singh Tomar said on Saturday that his ministry will soon seek Cabinet approval for a proposal to grant access to the Rs 1 lakh crore Agriculture Infrastructure Fund to emerging technology-based farm projects such as hydroponics.
The Agriculture Infrastructure Fund (AIF), established in 2020, provides a financing facility for the establishment of post-harvest infrastructure projects at farm-gate and aggregation points. Loans are available at a 3% annual interest subsidy up to a limit of Rs 2 crore. The subvention is valid for a maximum of seven years.
"We are considering allowing more projects under AIF, for which we will soon seek Cabinet approval," Tomar said after awarding the best performing banks under AIF. AIF changes have been proposed in order to allow emerging technology-based farm projects such as hydroponics to borrow from AIF.
The last time the government changed AIF was in July 2021. The government had previously allowed APMCs, state agencies, federations, farmer cooperatives, and self-help groups to apply for funding for infrastructure development projects.
Tomar believes that AIF infrastructure projects should be located near farm gates so that farmers can reap the most benefits. While the country has made strides in farm productivity, the emphasis is now on increasing farmer income. As a result, he believes that the farming community should have access to the necessary post-harvest infrastructure in order to increase their income.
Tomar also stated that both states and banks must bridge the funding gap for eligible beneficiaries through AIF. According to official data, out of more than 23,000 applications received on the AIF integrated portal, 13,700 applicants have been sanctioned for Rs 10,131 crore AIF loans with a combined investment of around Rs 17,500 crore by various lending institutions.
Speaking on the occasion, Minister of State for Agriculture Kailash Choudhary stated that banks' role is critical because the AIF will provide a significant boost to startups and farmer producer organizations in the future.
As a result, banks need not be concerned about sanctioning loans to AIF applicants because the government provides credit guarantees, he said. Agriculture Secretary Manoj Ahuja has asked banks to simplify the loan process for AIF projects, and state governments to establish project monitoring units to expedite AIF applications.
AIF is in high demand for a variety of projects. To reach them, banks should use a campaign mode and a 'one branch, one application' approach, he said, in order for the AIF scheme to be successful. "The country has one lakh bank branches. If only one application is cleared by one branch, we will easily meet the AIF target. This will also help to improve farm infrastructure.” he continued.
