Cabinet Approves Expansion of AIF Scheme to Boost Farming and Rural Economy

The Union Cabinet, led by Prime Minister Narendra Modi, has approved a significant expansion of the Central Sector Scheme under the 'Agriculture Infrastructure Fund' (AIF), with the goal of making it more attractive, impactful, and inclusive. This move is expected to substantially enhance the agricultural infrastructure across the country and provide greater support to the farming community.

The government has announced a series of measures aimed at broadening the scope of the AIF scheme, which is designed to support the creation and development of agricultural infrastructure. The expansion will now include a wider range of eligible projects and additional supportive measures to strengthen the agricultural infrastructure ecosystem.

One of the key changes is the inclusion of all eligible beneficiaries for the creation of infrastructure under 'viable projects for building community farming assets.' This initiative is expected to drive the development of projects that will boost community farming capabilities, thereby improving productivity and sustainability within the agricultural sector.

Additionally, the scope of eligible activities under the AIF has been broadened to include integrated primary and secondary processing projects, although standalone secondary projects will not be covered and will instead fall under the schemes of the Ministry of Food Processing Industries (MoFPI).

Another significant development is the convergence of Component-A of the PM-KUSUM scheme with the AIF, aimed at promoting sustainable clean energy solutions alongside agricultural infrastructure development. This alignment will benefit farmers, farmer groups, Farmer Producer Organizations (FPOs), cooperatives, and panchayats.

Moreover, the credit guarantee coverage under AIF will now be extended to FPOs through the NABSanrakshan Trustee Company Pvt. Ltd., in addition to the existing coverage by the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This expansion is intended to enhance the financial security of FPOs, encouraging more investments in agricultural infrastructure projects.

Since its inception in 2020, the AIF has played a crucial role in supporting the creation of over 6,623 warehouses, 688 cold stores, and 21 silo projects, resulting in an additional storage capacity of approximately 500 LMT across the country. This expanded capacity has allowed for the preservation of 18.6 LMT of food grains and 3.44 LMT of horticultural produce annually. To date, Rs. 47,575 crore has been sanctioned for 74,508 projects under AIF, mobilizing an investment of Rs. 78,596 crore in the agricultural sector, with the majority of this investment coming from private entities. These projects have also generated over 8.19 lakh rural employment opportunities in the sector.

The recent expansion of the AIF scheme is expected to further drive growth, improve productivity, enhance farm incomes, and contribute to the overall sustainability of agriculture in India. These measures highlight the government's commitment to strengthening the agricultural sector through comprehensive development of farm infrastructure.