Modifications in the Central Sector Scheme of Financing Facility to aid farmers

The scheme, under the ‘Agriculture Infrastructure Fund’ has undergone a few modifications which have been approved by the Union Cabinet of Ministers.

July 8, 2021

The scheme was approved by the cabinet last year under the guidance of Prime Minister Shri Narendra Modi.

It aims to provide debt financing facilities for projects on post-harvest management and community farming assets.

The new modifications in the scheme are expected to aid the accumulation of investments significantly.

The assurance of the scheme’s benefits reaching farmers with a low or marginal income is greater with the modifications.

A series of modifications in the Central Sector Scheme of Financing Facility under the ‘Agriculture Infrastructure Fund’ have received approval from the Union Cabinet headed by the Hon’ble Prime Minister Shri Narendra Modi. The scheme, approved by the cabinet last year, aims to provide a medium – long term debt financing facility in order to provide the investment for applicable projects for post-harvest management and community farming assets by means of interest subventions and financial support. Expressing the commitment of the government towards the farmers and the agricultural sector at large, Hon’ble Home Minister Shri Amit Shah had mentioned that the decision behind the approval of the scheme was to consolidate the Agricultural Produce Market Committee (APMC) system and improve employment opportunities, among many others.

The modifications in the scheme are as listed below:

  1. State Agencies/APMCs, National & State Federations of Cooperatives, Federations of Farmers Producers Organizations (FPOs) and Federations of Self Help Groups (SHGs) have now been made eligible for being covered under the scheme.
  2. In contrast to the previous interest subvention for a loan upto USD$2.68 million at one location, the new modifications enables projects across different locations to become eligible for an interest subvention for the same amount. Each of the projects must be situated in a location with separate Local Government Directory (LGD) codes. The limit for this subvention for the private sector is a maximum of 25 projects.
  3. Each project for APMCs, irrespective of differing infrastructure types (for example cold storage, sorting, grading and assaying units, silos, within the same market yard) will be provided with interest subvention for a loan of upto USD$2.68 million.
  4. The authority to bring about any required changes with respect to the addition or removal of a beneficiary in a way that retains the underlying spirit of the scheme has been delegated to the Hon’ble Minister of Agriculture & Farmers Welfare.
  5. While the overall period of the scheme has been extended from 10 to 13 years upto 2032-33, the duration of the financial facility has been extended from 4 to 6 years upto 2025-26.

These are expected to enable a multiplier effect in the accumulation of investments, along with the assurance of the benefits reaching farmers with a small or marginal income. Many APMC markets are also being established to enable the provision of market linkages along with the facilitation of an ecosystem of post-harvest public infrastructure which is open to all farmers.