Agriculture Facilitation Fund Scheme

The Central Government has approved the Agricultural Infrastructure Fund under the Central Sector Scheme to improve agricultural infrastructure by providing medium-long term credit facilities through interest subsidy and financial assistance to farmers to invest in viable projects for post-harvest management, infrastructure and community farm assets. Under this scheme Banks and Financial Institutions, Primary Agricultural Credit Institutions (PACS), Marketing Cooperatives, Farmer Producer Organizations (FPOs), Self Help Groups, Farmers, Joint Liability Groups (JLGs), Multipurpose Cooperatives, Agri-Entrepreneurs, Startups, Aggregates One lakh crore rupees will be loaned to public private partnership projects sponsored by the infrastructure providers and central/state bodies or local bodies.

Agriculture Facilitation Fund Scheme
Agriculture Facilitation Fund Scheme

Agriculture Facilitation Fund Scheme:

Guidelines for Agricultural Infrastructure Fund have been issued by the Central Government. The scheme is expected to improve overall agricultural infrastructure by encouraging creation of post-harvest management facilities and collective farming facilities. For this, medium and long term financial investment facility will be created.

Objective : To increase market linkages by helping farmers and their organizations to set up post-harvest facilities. In order to increase the net production of farmers, the scheme will provide concession in the interest rate currently charged for supply in priority areas. To reduce the risk of banks in such credit provision, credit guarantee and interest concession will be provided under the scheme. Overall, an atmosphere of mutual interest will be created with farmers, banks and customers.

Duration : 13 Years (2020-21 to 2031-32)

Eligible Beneficiaries : Primary Agricultural Credit Institutions, Marketing Co-operative Societies, Farmer Producer Societies, Self Help Groups, Farmers, Joint Liability Groups, Multi-Purpose Co-operative Societies, Agricultural Entrepreneurs, Public / Private Partnership Projects proposed by the Central / State Government or Local Self-Government, Agricultural Produce Market Committee, Vakhar Corporation, Agricultural Startup.

Components of the Scheme:

1. Interest Concession: 3 percent interest concession on total loan up to Rs.2 crores up to a maximum of 7 years.

2. Credit Guarantee: CGEMSE will provide credit guarantee for loans up to Rs. The central government will pay this guarantee fee.

3. Eligible Projects:

A. Post-Harvest Management Projects: Supply chain development projects and e-market platforms, warehouse construction, silos, pack houses, quality assurance facilities, grading facilities, cold chain, transport management facilities, primary processing facilities, fruit growing facilities.

b. Collective Farming Facilities (eg) : Organic Input Production Centres, Biological Inputs Production Centres, facilities for precision farming, supply chain facilities, facilities on PPP basis in Center and State Government Schemes for Collective Farming.

Procedure to participate in the scheme:

  • Applicants should register online through the scheme portal
  • After that they will get the authorization letter of registration.
  • After receiving the authorization letter, the beneficiary should apply online for the loan on the form available on the online portal.
  • The original copy of the detailed project report and the documents related to the project report should be uploaded on the portal along with the application.
  • The applicant should send the application along with a detailed project report to the lending financial institution for evaluation.
  • The lending institution will evaluate the project and decide whether to approve the loan or reject the project based on the feasibility of the project.
  • After the loan is sanctioned, the funds will be mutually deposited in the beneficiary’s bank account.
  • After disbursement of loan from the financial institution to the beneficiary, interest concession and guarantee fee will be disbursed by the Government of India to the Financial Institutions and Credit Guarantee Fund Trust for Micro and Small Enterprises.

This scheme is beneficial to the farmers and their organizations for setting up post-harvest facilities and increasing the net production of the farmers and maximum number of farmers should take advantage of the scheme.

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