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How Agri Infra Fund is strengthening primary Agri Co-Op Societies?

GS Paper 3

Topics Covered: Issues related to direct and indirect farm subsidies and minimum support prices; Public Distribution System objectives, functioning, limitations, revamping; issues of buffer stocks and food security; Technology missions; economics of animal-rearing.


 Co-Op Societies


One year after its launch, the Central government’s Agriculture Infrastructure Fund (AIF) has given a major boost to the strengthening of Primary Agricultural Cooperative Societies (PACS) – the lifelines of village-level credit systems.

  • The Ministry of Agriculture data provided to Rajya Sabha last month reveal that a total of 6,524 projects, at cost of ₹4,503, have been sanctioned under AIF.
  • Out of this, 76 per cent (4,963) of the projects have gone to PACS. This means that 65 per cent of the funds under the scheme have gone to PACS projects.

current affairs


Latest modifications:

Recently, The Union Cabinet has approved the various modifications in the Central Sector Scheme of Financing Facility under ‘Agriculture Infrastructure Fund’.


  1. Eligibility has now been extended to State Agencies/APMCs, National & State Federations of Cooperatives, Federations of Farmers Producers Organizations (FPOs) and Federations of Self Help Groups (SHGs).
  2. For APMCs, interest subvention for a loan upto Rs. 2 crore will be provided for each project of different infrastructure types e.g. cold storage, sorting, grading and assaying units, silos, et within the same market yard.
  3. The power has been delegated to the Minister of Agriculture & Farmers Welfare to make necessary changes with regard to addition or deletion of beneficiaries.
  4. The period of financial facility has been extended from 4 to 6 years upto 2025-26 and overall period of the scheme has been extended from 10 to 13 upto 2032-33.


About the Agriculture Infrastructure Fund:

  • It 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.
  • 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 Crores.


Eligible beneficiaries include:

Originally, it included Farmers, Marketing Cooperative Societies, Joint Liability Groups (JLG), Multipurpose Cooperative Societies, Agri-entrepreneurs, Start-ups, and Central/State agency or Local Body sponsored Public-Private Partnership Projects.


Interest subvention:

All loans under this financing facility will have interest subvention of 3% per annum up to a limit of Rs. 2 crore. This subvention will be available for a maximum period of seven years.


Credit guarantee:

  • Credit guarantee coverage will be available for eligible borrowers from this financing facility under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for a loan up to Rs. 2 crore.
  • The fee for this coverage will be paid by the Government.
  • In case of FPOs the credit guarantee may be availed from the facility created under FPO promotion scheme of Department of Agriculture, Cooperation & Farmers Welfare (DACFW).

Management of the fund:

  • It will be managed and monitored through an online Management Information System (MIS) platform.
  • The National, State and District level Monitoring Committees will be set up to ensure real-time monitoring and effective feed-back.


Insta Curious:

Have you heard about Asymmetric shock? What is it? Reference: read this.



Prelims Link:

  1. About the Fund.
  2. What are FPOs?
  3. What are Cooperatives? Constitutional provisions.v
  4. About CGTMSE.
  5. Central sector vs Centrally sponsored schemes.
  6. Core vs core of core schemes.

Sources: the Hindu.