Feb 03: In the Union Budget 2021-22, Finance Minister, Nirmala Sitharaman, announced that Agricultural Produce Marketing Committees (APMCs) will become eligible beneficiaries to utilize the 1 lakh crore financing facility under Agriculture Infrastructure Fund (AIF) to enhance infrastructure at regulated markets, commonly known as Mandis.
APMCs are state controlled markets that are setup to provide market linkages to farmers. Market yards or Mandis provide space for auction to ensure that farmers obtain best possible price for their produce. However, these markets continue to require up gradation and set up of more modern infrastructure. With access to low cost credit under AIF, they can setup post-harvest infrastructure such as sorting and grading units, assaying units, drying yards, cold storages, and warehouses for the benefit of farmers for better price realization of quality produce, ability to store and sell at a better price and minimize post of harvest looses.
Availability of post-harvest infrastructure will help the farmers to enhance their income through effective value chain. Availability of warehouses with financing facilities will help the farmers to store the agriculture produce and sell at optimal prices. Perishables such as fruits, vegetables and flowers require low temperatures throughout the value chain to enhance shelf life and preserve quality. Hence, availability of cold storages at markets will result in direct benefit to the farmers on premium farm produce. The suitable infrastructure will help to reduce the post-harvest losses, which can be as high as 5-10% of the produce. Hence, up gradation of infrastructure at regulated markets has the potential to enhance farm income and also support other stakeholders across the value chain, which also have the access to this infrastructure.
The AIF is a medium – long term debt financing facility for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee. The duration of the scheme is from FY2020 to FY2029. Under the scheme, Rs. 1 Lakh Crore will be provided by banks and financial institutions as loans with interest subvention of 3% per annum and credit guarantee coverage under CGTMSE for loans up to Rs. 2 Crore. The beneficiaries include farmers, FPOs, PACS, Marketing Cooperative Societies, SHGs, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Start-ups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects, and now APMC mandis.
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