PM launches ₹1 trillion fund to boost agri infra

Prime Minister Narendra Modi on Sunday launched a ₹1 trillion agriculture infrastructure fund to give a leg up to post-harvest management and marketing of agricultural produce, in turn helping improve farm-gate prices.

The scheme will provide better warehousing and cold storage facilities for farmers, Modi said, adding, new jobs will be created as food processing and post-harvest facilities are set up in rural areas. The scheme will enable startups to scale up their operations and India to build a global presence in organic and fortified food, he said.

The fund was launched with ₹1,128 crore of new loans disbursed to more than 2,200 cooperative societies. During the event, the Prime Minister also transferred ₹17,100 crore to farmers under the PM-Kisan direct income assistance scheme.

Under the infrastructure scheme—part of the federal government’s Atmanirbhar Bharat package announced in May—banks and financial institutions will provide ₹1 trillion in loans to cooperative societies, farmer producer companies, self-help groups, entrepreneurs, startups and infrastructure providers.

The objective is to provide medium to long-term debt financing for setting up of post-harvest infrastructure and community assets for marketing of farm produce. According to the guidelines, all loans up to ₹2 crore will be disbursed with a 3% interest subsidy. The loans will be disbursed over four years— ₹10,000 crore in 2020-21, and ₹30,000 crore in the next three years.

The launch of the infrastructure fund follows a collapse in wholesale prices of perishable produce amid India’s stringent lockdown between April and June to control the spread of covid-19.

Other than those growing fruits and vegetables, dairy farmers too were affected due to a fall in milk procurement prices following the closure of hotels and restaurants.

In his address following the launch, the Prime Minister said the government is focused on small farmers and has brought in a new set of laws on agriculture marketing, which will help create a national market for farm produce and give farmers the choice of selling their harvest at the farm-gate. Measures like contract farming will protect farmers from price volatility, Modi said.

The Prime Minister also said that new facilities like Kisan Rail flagged off earlier in August will help farmers connect to distant markets, allowing hassle-free transport of farm produce between states like Bihar and Maharashtra.