To boost post-harvest facilities like farm gate storage and logistics infrastructure, the Centre has approved proposals worth over Rs 63,500 crore under Agri Infrastructure Fund (AIF) for more than 1,09,426 projects since its launch five years back.
Sources told FE that so far these sanctioned projects by the agriculture ministry have mobilised an investment of Rs 1 lakh crore in the sectors including food processing, custom hiring centres, cold chains and warehousing, out of which a large chunk has been mobilised from private entities. The disbursement under AIF till end of the current fiscal is likely to be around Rs 90,000 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.
To bridge the existing gaps in post-harvest management infrastructure, AIF which was launched in May 2020 aims 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.
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. The fund also covers the reimbursement of credit guarantee fees paid by banks.
Borrowers under AIF need to contribute at least 10% of total project cost irrespective of available capital subsidy. In terms of number of projects sanctioned under AIF, Punjab (21,740), Madhya Pradesh (12,495), Maharashtra (10,418) and Uttar Pradesh (8,563) constitute significant shares.
The ministry has 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.
Following the implementation of the fund, the agriculture ministry has projected annual savings from post-harvest losses of 1.86 million tonne (MT) and 0.34 MT of horticultural crops.
“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.