Union Cabinet approves expansion of agriculture infrastructure fund to boost farm growth and sustainability

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the progressive expansion of the Central Sector Scheme for financing under the 'Agriculture Infrastructure Fund' (AIF) to make it more attractive, impactful, and inclusive.

According to the official statement, in a major effort to enhance agricultural infrastructure across the country and support the farming community, the government has introduced a range of measures to broaden the scope of the AIF scheme. These initiatives aim to include more eligible projects and integrate additional supportive measures to build a stronger agricultural infrastructure ecosystem.

The scheme will now allow all eligible beneficiaries to create infrastructure under 'viable projects for building community farming assets.' This is expected to foster the development of projects that will boost community farming capabilities, thereby improving productivity and sustainability in the sector.

Integrated primary and secondary processing projects will now be included in the list of eligible activities under AIF. However, standalone secondary projects will remain ineligible and will be covered under the Ministry of Food Processing Industries (MoFPI) schemes.

The government will also allow the convergence of Component-A of the PM-KUSUM scheme with AIF for farmers, groups of farmers, Farmer Producer Organizations (FPOs), Cooperatives, and Panchayats. This alignment aims to promote sustainable clean energy solutions alongside the development of agricultural infrastructure.

In addition to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), the AIF credit guarantee coverage for FPOs will be extended through the NABSanrakshan Trustee Company Pvt. Ltd. This expansion is intended to enhance the financial security and creditworthiness of FPOs, encouraging more investments in agricultural infrastructure projects.

Since its launch by the Prime Minister in 2020, the AIF has been instrumental in supporting the creation of 6,623 warehouses, 688 cold stores, and 21 silo projects, resulting in an additional storage capacity of about 500 lakh metric tonnes (LMT) in the country. This includes 465 LMT of dry storage and 35 LMT of cold storage capacity, enabling the annual preservation of 18.6 LMT of food grains and 3.44 LMT of horticulture produce.

To date, Rs. 47,575 crore has been sanctioned for 74,508 projects under AIF, mobilizing an investment of Rs. 78,596 crore in the agriculture sector, with Rs. 78,433 crore mobilized from private entities. Additionally, the infrastructure projects sanctioned under AIF have generated over 8.19 lakh rural employment opportunities in the agriculture sector.

The expansion of the AIF scheme is set to further drive growth, improve productivity, increase farm incomes, and contribute to the overall sustainability of agriculture in the country. These measures reflect the government's commitment to strengthening the agricultural sector through the holistic development of farm infrastructure.