why Cabinet extended Agri Infra Fund loans to APMCs?

The Centre has decided to allow state-run market yards to access financing facilities through its Agricultural Infrastructure Fund to calm the fears of protesting farmers that such market yards are being weakened.

Agriculture Infrastructure Fund (AIF) Schemes: It is a Central Sector Scheme meant for setting up storage and processing facilities, which will help farmers, get higher prices for their crops.

The Union Cabinet approved this scheme in July 2020 for a period of 10 years. It will support farmers, PACS, FPOs, Agri-entrepreneurs, etc. in building community farming assets and post-harvest agriculture infrastructure.

These assets will enable farmers to get greater value for their produce as they will be able to store and sell at higher prices, reduce wastage and increase processing and value addition.     

  1) It is a Central Sector Scheme  

2) Duration of the scheme    

3)Target beneficiaries

The AIF is a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee.

Under the scheme, Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans with an interest subvention of 3% per annum. It will provide credit guarantee coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to Rs. 2 Crore.

The beneficiaries will include farmers: PACS, Marketing Cooperative Societies, FPOs, SHGs, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects.

The Union Cabinet decided to extend the AIF to State agencies and Agricultural Produce Marketing Committees (APMCs), as well as federations of cooperative organizations, Farmers Producers Organizations and self-help groups.

They will now be eligible for interest subvention for loans up to ₹2 crores, with APMCs allowed to access separate loans for different kinds of infrastructure projects to build cold storage, silos, sorting, grading and assaying units in their market yards.

The scheme has also been extended to 2032-33. The modifications in the Scheme will help to achieve a multiplier effect in generating investments while ensuring that the benefits reach small and marginal farmers.

The APMC markets are set up to provide market linkages and create an ecosystem of post-harvest public infrastructure open to all farmers. This is also proof that APMC will not end as the farmers’ concern since the three farm laws.