Center Approves Expansion of Agriculture Infrastructure Fund

The Centre has recently expanded the Agriculture Infrastructure Fund (AIF), which aims to enhance community farming assets and improve post-harvest management infrastructure. The original scheme began on July 8, 2020, which faces important challenges at the grassroots level.

Crop Wastage in India

India experiences 15-20% crop yield wastage, which is notably higher than the 5-15% seen in advanced economies. Improving infrastructure is crucial to reduce this wastage.

Importance of Agri-Infrastructure

Agri-infrastructure includes irrigation, power, and transport. These elements enhance credit access and increase yields. They also help small farmers reach better markets. However, private investment remains limited due to various challenges.

Public-Private Partnerships (PPPs)

The government promotes PPPs to improve post-harvest management, which aims to attract private investment in agricultural infrastructure. The AIF supports these initiatives.

Funding Details

On November 25, 2024, ₹51,451 crore has been sanctioned under the AIF. The total allocation for the scheme is ₹1 lakh crore. Scheduled commercial banks have sanctioned 94.22% of loans. Approved projects total ₹84,669 crore, with ₹33,724 crore disbursed.

Types of Approved Projects

Most approved projects focus on custom hiring centres, agri-processing units, warehouses, sorting and grading units, and cold storage facilities. Over 47,000 projects, accounting for 56.2%, have been geo-tagged.

The ₹2 crore loan limit restricts larger projects, such as cold storage chains. There is no provision for working capital, leading to underutilisation. Delays in interest subsidies and lack of awareness among bank officials further complicate matters.

Proposed Solutions

Increasing the loan limit for renewable energy projects to ₹5-10 crore could help. Providing working capital loans at 25% of project cost may improve project viability. Enhancing the AIF portal’s user-friendliness is also essential. Custom training for bank staff would ensure better understanding of the scheme.

With these adjustments, the remaining ₹48,549 crore of the fund could be effectively utilised by March 2026.

Important Facts for Exams:

1. Agriculture Infrastructure Fund (AIF): Established on July 8, 2020, AIF aims to enhance community farming assets. It supports post-harvest management through public-private partnerships to improve agricultural infrastructure.
2. Public-Private Partnerships (PPPs): PPPs in agriculture promote collaboration between government and private sectors. They aim to attract investment for improving post-harvest management and enhancing agricultural infrastructure across India.
3. Geo-tagging: Geo-tagging of AIF projects ensures transparency. It prevents duplicate funding from banks. Over 47,000 projects have been geo-tagged, making tracking and accountability more efficient in fund distribution.
4. Crop Yield Wastage: India faces 15-20% crop yield wastage, higher than 5-15% in advanced economies. Improving agricultural infrastructure is crucial to reducing this important waste of resources.

Month: Current Affairs - November, 2024

Category: Agriculture Current Affairs