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The Cabinet on Thursday has given its approval for the modifications in the guidelines of the Rs 1-lakh-crore Agriculture Infrastructure Fund (AIF). This move will expand the beneficiary institutions, including Agricultural Produce Market Committees (APMCs). It will give access to avail credit of up to Rs 2 crore from the Fund to set up cold storage, sorting, grading, and assaying units.

Agricultural infrastructure

So far, the government has sanctioned projects worth Rs 4,300 crore from AIF. There has been some apprehension among a significant section of farmers that Mandis may shut down. Whereas, after the Cabinet meeting, Narendra Singh Tomar said, the government has been doing everything to strengthen the APMCs. The repayment period has been increased from 4 years to 6 years up to 2025-26. Also, the overall period of the scheme is extended from 10 years to 13 years up to 2032-33.

What does the ministers have to say?

Agricultural minister

Agriculture Minister, Tomar also reiterated his appeal to farmer unions. He requests farmers to end their protest and resume talks with the government on provisions of three farm laws. These laws are currently in suspension after the Supreme Court suspended them in January. Tomar again ruled out the option of repealing these Acts. However, he affirms in his statement that the procurement system on the Minimum support price (MSP) will stay.

Tomar mentions that the APMCs are allowed to set up and reinforce their infrastructure facilities even outside the market yard premises. However, but it shall only be within their command area. This will hugely help APMCs expand. As most of the current market yards do not have additional space within the premises to set up such infra. During FY22 Budget, the finance minister made an announcement that the APMCs would be allowed to avail credit from AIF.

Eligibility for loans

Eligibility for these loans from the AIF is extended to state agencies/APMCs, national and state federations of cooperatives, federations of farmer’s producers’ organizations (FPOs), and federations of self-help groups (SHGs). The Cabinet has also given its approval to the agriculture minister for taking any necessary changes in the future improvements. Thus, the agriculture minister can make addition or deletion of beneficiaries without altering the basic spirit of the scheme.

What is the current scenario?

For now, the interest subvention for a loan of up to Rs 2 crore by one organization or farmer in only one location is eligible under the scheme. If one eligible entity puts many projects in various locations then all such projects will be eligible for interest subvention. However, there are constraints limiting it to a maximum of 25 such projects. They are for private sector entities.

The limitation of 25 projects is not applicable for state agencies, national and state federations of cooperatives, federations of FPOs, and federation of SHGs. Locations refer to the physical boundary of a village or town having a distinct LGD (Local Government Directory) code. Every such project must be in a location having a separate LGD code.

The Cabinet is also making the post of chairman of Coconut Development Board (CDB) a non-executive post. Whereas, the creation of a chief executive officer post in the respective organization got the government approval. Besides, the government decided to allow the CDB to expand its activities abroad. Earlier there was a restriction to the country, the decision comes with an objective to boost export and help increase farmers’ income.

For more such updates, keep watching this space!

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