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National Agriculture Infra Financing
Agricultural Infrastructure, referring to the physical and organizational structures, facilities, and systems needed to support and improve the agricultural sector. It encompasses a wide range of infrastructure that facilitates farming, food production, and distribution. Agri Infra plays a vital role in enhancing agricultural productivity, ensuring food security, and improving the livelihoods of farmer projects.
Main Features of the Agri Infrastructure Fund (AIF)
The Agri Infrastructure Fund (AIF) scheme offers several key features designed to provide financial support and encourage the development of agricultural infrastructure in India:-
- The AIF scheme has a total financing facility approximately one lakh crore in 2024-25.
- The scheme offers a 3% interest rate subvention for loans up to two crores for a maximum term of 7 years.
- The scheme provides credit guarantee coverage of up to two crores, with the government reimbursing the fee for this coverage.
- The scheme includes multiple lending institutions, such as commercial banks, cooperative banks, regional rural banks (RRBs), small finance banks, the National Cooperative Development Corporation (NCDC), and Non-Banking Financial Companies (NBFCs).
- The scheme provides a Project Management Unit (PMU) to offer handholding support for project implementation, helping applicants through every stage of their projects.
- The scheme features an online single window facility in collaboration with participating lending institutions, simplifying the application and approval process.
- The scheme converges with other central and state government schemes, allowing for greater integration and resource allocation for projects.
- The moratorium period for repayments under this financing facility can vary, with a minimum of 6 months and a maximum of 2 years, providing flexibility to the applicants.
- The scheme defines locations as the physical boundary of a village or town, having a separate LGD (Local Government Directory) code, which ensures the focused development of agricultural infrastructure at the grassroots level.
- These features make the AIF scheme an important tool in fostering growth and sustainability in India's agricultural sector, by providing financial resources, technical support, and promoting infrastructure development.
Wide Range of Eligible Projects
- Post-harvest management - Post-harvest management is a system of handling, storing, and transporting agricultural commodities after harvest. For some commodities such as coffee and cocoa, post-harvest activities may include drying and fermenting as well.
- Primary processing - Primary processing is the conversion of raw materials into food commodities – for example, milling wheat into flour. Secondary processing is when the primary product is changed to another product – for example, turning wheat flour into bread
- Hydroponic farming - Hydroponics is the technique of growing plants using a water-based nutrient solution rather than soil, and can include an aggregate substrate, or growing media, such as vermiculite, coconut coir, or perlite. Hydroponic production systems are used by small farmers, hobbyists, and commercial enterprises.
- Mushroom farming - Mushroom farms commonly cultivate mushrooms on sawdust or wood pallets. To create the substrate mushrooms, prefer, you'll need organic softwood fuel pellets, wood chips, and soy hulls. Then, combine these two ingredients in a biodegradable bag and add water to achieve the desired moisture content.
- Vertical farming - Vertical farming is exactly what it sounds like: farming on vertical surfaces rather than traditional, horizontal agriculture. By using vertically stacked layers, farmers can produce much more food on the same amount of land (or even less)
Who’s can Apply for (AIF)
- Farmers
- Farmers Producers Organization
- Primary Agricultural Credit Society
- Start-Up
- Agri-Entrepreneur
- Agricultural Produce Market Committee
Eligible Projects Under (AIF)
Post Harvest Management Project under AIF;
- Warehouses - Warehousing is the act of storing goods that will be sold or distributed later. While a small, home-based business might be warehousing products in a spare room, basement, or garage, larger businesses typically own or rent space in a building that is specifically designed for storage.
- Cold stores and Cold chains - Cold room is a small insulated room used for short-term storage of perishable goods. Cold storage refers to a larger room designed for the storage of perishable goods at low temperatures. Cold rooms have limited capacity, while cold storage rooms can hold large volumes of products.
- Logistic facilities - Logistics facility means any warehouse for storage and transportation of goods, distribution facilities, logistics services such as but not limited to material handling, production, packaging, inventory, transportation, storage, warehousing, freight forwarding, deposit, storage, safekeeping, or parts thereof, ...
- Sorting and grading units - Sorting is a process to separate foods on the basis of physical property. It helps in separating foods such as shape, size, color or weight. On the other hand, grading refers to the separation of various factors to be taken into account to accomplish the same.
- Ripening cambers - The Ripening chamber is one of the key places to complete the ripening process of some fruits. You can use a Ripening Chamber for ripening the fruits. Ripening of fruits is also a procedure which makes the fruits further palatable. When you go with Ripening of fruits process, you can ripe fruits easily.
- Organic inputs production - Organic inputs such as various types of composts, biofertilizers etc are not only important in organic farming, but are also of prime importance in integrated agriculture with balanced use of fertilizers for sustenance of soil fertility.
- Compressed Biogas Plants - The Bio-Gas is purified to remove hydrogen sulphide (H2S), carbon dioxide (CO2), water vapour and compressed as Compressed Bio-Gas (CBG), which has methane (CH4) content of more than 90%. CBG has calorific value and other properties similar to CNG and hence can be utilized as green renewable automotive fuel.
- Nursery - A nursery is an enclosed place where plants such as paddy, cabbage and some flowering plants are grown to a desired age since they require special care. Once they mature to a certain age, they are transplanted in larger fields.
- Seed Processing - Seed processing means cleaning operation that are taken up to the raw produce from the field. In this process the seed that is produced is going to be used as seed purpose that's why we have to take care of the germination percentage also.
- Farm/Harvest Automation (combine haevestor,sugarcane harvestor etc.) - The use of machinery and equipment in agricultural operations to improve their diagnosis, decision-making or performing, reducing the drudgery of agricultural work and/or improving the timeliness, and potentially the precision, of agricultural operation.
- Honey Processing - The name "honey processed" comes from the sticky appearance of the mucilage, which resembles honey. This method allows for various flavour profiles, depending on how much mucilage is left on the beans during drying. This results in coffees with varying levels of sweetness, acidity, and body.
- Polyhouses/Greenhouses - Polygreen is one of the largest manufacturers of non-invasive digital medical diagnostics worldwide. Specializing in converting signals from the human body into comprehensible information for end-users, we have grown into a diverse biomedical electronic company following years of continuous development and innovation
- Plant quarantine units - Plant quarantine is defined as the legal enforcement of the measures aimed to prevent pests from spreading or to prevent them from multiplying further in case they have already gained entry and have established in new restricted areas.
Scheme and Subsidies
- Warehouse- This scheme provides subsidies for the construction of rural godowns (warehouses) to promote food grain storage in rural areas.
- • A subsidy of 25% of the project cost, up to a maximum of Rs. 50 lakh, is provided for constructing rural godowns.
- • For women and SC/ST entrepreneurs, the subsidy may go up to 33.33%.
- Cold Stores and Cold chains - The CCIS offers a subsidy of up to 50% of the project cost (for general category applicants) and up to 75% for special category applicants (such as SC/ST, women, and smaller farmers).
- Logistic Facilities - It provides up to 50% subsidy on capital investment for the development of logistics infrastructure in food processing. For special categories, this subsidy can go up to 75%.
- Sorting and grading units - A subsidy of up to 50% of the total capital cost (80% for NE states, women, and SC/ST applicants).
- Ripening Cambers - Subsidies are available for the establishment of ripening chambers, with up to 35-50% subsidy for farmers, cooperatives, and private entities.
- Organic inputs Production - Farmers or groups can receive up to 50-75% subsidy, depending on the state or region.
- Compressed Biogas (CBG) Plants - The central government provides 30% subsidy for setting up renewable energy plants, which may include biogas plants.
- Nursey - For hi-tech nursery (2-4 ha unit), the subsidy available is 40% of cost, as credit linked back-ended subsidy is of Rs. 25 lakhs per ha under Sub Schemes of NHM & HMNEH under MIDH.
- Honey Processing - This scheme provides a 75% subsidy for farmers and a 100% subsidy for the government sector to establish honey farms.
- Poly Houses/Green houses - Up to 50-75% of the total cost, depending on the farmer's category and the specifics of the. Eligibility and Application: All farmers in Punjab are eligible.
- Hydroponic Farming - The NHB provides a credit-linked back-ended subsidy of 20% of the total project cost, up to a maximum of Rs 25 lakh. For high-value crops and capital-intensive projects, the subsidy is 25% of the project cost, up to a maximum of Rs 50 lakh. The NHB also evaluates and adjusts subsidy rates to meet the needs of different states. Each state has its own subsidy program.
- Mushroom units - 50-75% subsidy: Depending on the region and the type of farmer (individuals, groups, or cooperatives), the subsidy may cover a significant portion of the investment.
- Vertical Farming - The purpose of this scheme is to help the users to establish a vertical garden for planting. Beneficiaries will receive 75% of the cost of establishing a vertical garden and 25% of the cost will be borne by the beneficiary.
The Agriculture Infrastructure Fund (AIF) provides several key benefits and outcomes for farmers, agripreneurs, and the agricultural ecosystem. Below are the major outcomes:
Increased Market Access and Value Realization
• Direct Sales to Larger Consumer Base: Farmers can sell their produce directly to a wider market, increasing the value they realize for their crops.
• Fewer Intermediaries and Reduced Losses: By bypassing intermediaries, farmers can reduce costs and minimize post-harvest losses.
Better Control Over Market Timing
• Access to Modern Packaging and Cold Storage: Farmers can store their produce for longer periods and sell when market conditions are favorable, reducing the pressure to sell immediately after harvest.
• Reduced Losses: Modern infrastructure ensures better preservation of produce, preventing spoilage and wastage.
Cost Savings and Productivity Improvement
• Increased Productivity: With access to better farming practices, machinery, and infrastructure, farmers can improve their overall productivity, leading to reduced costs and better yields.
• Optimizing Inputs: Farmers can optimize the use of resources (such as water, fertilizers, etc.), reducing expenses and improving profitability.
Financial Benefits for Lending Institutions
• Interest Rate Subvention: Lending institutions offering loans to farmers under the AIF scheme can benefit from a 3% interest rate relief for loans up to two crores with a maximum term of 7 years.
• Need-Based Refinance Support: The AIF also offers refinancing support to lending institutions to enhance their lending capacity.
Collaboration Between Stakeholders
• Connecting Ecosystem Players: The AIF promotes better collaboration between farmers, agripreneurs, and other stakeholders in the agriculture value chain, leading to a more integrated and efficient system.
Infrastructure Investment
• Long-Term Efficiency Improvements: Loans under AIF can help farmers invest in better infrastructure such as irrigation systems, storage facilities, and mechanized equipment, leading to long-term improvements in farming efficiency.
Financial Cushioning During Adverse Conditions
• Protection During Difficult Seasons: AIF loans provide a financial cushion for farmers during difficult times, such as crop failures or natural disasters, ensuring sustainability and operational continuity.
Favorable Loan Terms
• Lower Interest Rates and Extended Repayment Periods: AIF loans offer favorable terms, with lower interest rates and longer repayment periods, making financing more accessible and manageable for farmers, especially smallholders.
Improved Income and Standard of Living
• Increased Income: By improving farming practices and infrastructure, farmers can increase their output, leading to higher incomes and better living standards.
• Contribution to Rural Development: As farmers become more financially stable, the agricultural sector contributes to broader rural economic development.
These outcomes help farmers adopt more modern practices, reduce costs, and improve their profitability, all of which contribute to the long-term growth and sustainability of the agricultural sector.