To boost post-harvest facilities like farm gate storage and logistics infrastructure, the Centre has approved proposals worth over Rs 83,528 crore under the Agriculture Infrastructure Fund (AIF) for over 1.65 lakh projects since its launch in 2020.
Sources told FE that these sanctioned projects have mobilised investment exceeding Rs 1 lakh crore, including private-sector contribution, in sectors such as food processing, custom hiring centres, cold chains and warehousing.
The disbursement under AIF until the end of current fiscal is likely to be around Rs 65,000 crore. So far Rs 61,512 crore has been disbursed for 1,46,789 projects according to official data.
Better post-harvest infra to boost farmers’ value realisation
The agriculture ministry stated that improved post-harvest management infrastructure like warehouses, cold stores, sorting and grading units, ripening chambers, etc will allow farmers to sell directly to a larger base of consumers and hence, increase value realisation for the farmers.
To bridge the existing gaps in post-harvest management infrastructure, AIF which was launched in May 2020 earlier aimed at disbursing Rs 1 lakh crore through banks and financial institutions by the end of FY26. The scheme is operational from 2020-21 to 2032-33. Earlier this month, the Cabinet approved doubling of the loan target under AIF to Rs 2 lakh crore.
The funds aim at creation of farm gate storage and logistics infrastructure to enable farmers to store and preserve their farm produce properly and sell them in the market at better price with reduced post-harvest losses and lesser number of intermediaries.
It facilitates loans upto Rs 2 crore, with a maximum repayment period of seven years from financial institutions. The fund provides 3% interest subvention with a cap of 9% on rate of investment. Borrowers under AIF need to contribute at least 10% of total project cost irrespective of available capital subsidy.
Punjab leads AIF sanctions; top five states dominate
The fund also covers the reimbursement of credit guarantee fees paid by banks. In terms of number of projects sanctioned under AIF, Punjab (32,906), Madhya Pradesh (27,597), Maharashtra (16,030), Uttar Pradesh (14,679) and Andhra Pradesh (6212) constitute significant shares.
“While first two years under the fund are considered as gestation period, improved marketing infrastructure and logistics at the farm gate would reduce post-harvest losses and increase farmers’ remuneration,” an official said.
“It connects ecosystem players, fostering collaboration between entrepreneurs and farmers for greater impact and it supports rural industrialisation, creating employment opportunities and boosting markets of processed agricultural goods,” according to an agriculture ministry statement in parliament.