Scheme Guidelines

for
CENTRAL SECTOR SCHEME
of
Financing facility under ‘Agriculture Infrastructure Fund’

Revised Scheme Guidelines

May 2022

Department of Agriculture, Cooperation& Farmers Welfare

Ministry of Agriculture & Farmers Welfare
Government of India

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 Index

S.No. Particulars Page No.

1 Introduction 3

2 Rationale of the Scheme 3-4

3 Objectives of Scheme 4-5

4 Implementation Period of Scheme 5

5. Government Budgetary Support 5-6

6. Eligible Projects 6-8

7. Size of the financing facility& eligible beneficiaries 8

8. Number of Projects per entity eligible under the scheme 8-9

9. Participating institutions 9

10. Refinance 9

11 Cap on lending rate 9

12. Project Management and handholding support 9-10

13. Convergence 10

14 Revisit of the Scheme 10

15 Monitoring framework 10-11

16 Output and outcome monitoring framework (OOMF) 11

17 Linkage with PFMS 11

18 Criteria for selection of eligible borrower 11

19 VGF requirement 11

20 Sector specific focus 11-12

21 States specific focus 12

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 Scheme Guidelines forCENTRAL SECTOR SCHEME of financing facility
under ‘Agriculture Infrastructure Fund’

1. Introduction

The role of infrastructure is crucial for agriculture development and for taking the
production dynamics to the next level. It is only through the development of infrastructure,
especially at the post-harvest stage that the produce can be optimally utilized with opportunity
for value addition and fair deal for the farmers. Development of such infrastructure shall also
address the vagaries of nature, the regional disparities, development of human resource and
realization of full potential of our limited land resource.

In view of above, the Hon’ble Finance Minister announced on 15.05.2020 ₹ 1 lakh

croreAgri Infrastructure Fund for farm-gate infrastructure for farmers. Financing facility of ₹
1,00,000 crore will be provided for funding Agriculture Infrastructure Projects at farm-gate &
aggregation points Primary Agricultural Cooperative Societies, Farmers Producer
Organizations, Agriculture entrepreneurs, Start-ups, etc. Impetus for development of farm-
gate & aggregation point, affordable and financially viable Post Harvest Management
infrastructure.

Accordingly, DA&FW has formulated the Central Sector Scheme to mobilize a medium -
long term debt financing facility for investment in viable projects relating to post-harvest
management Infrastructure and community farming assets through incentives and financial
support.

Subsequently, in the budget announcement made on 01.02.2021, it was decided to

extend the benefit of the scheme to APMCs. Accordingly, modifications in the scheme were
carried out with the approval of Cabinet to make it more inclusive.

2 Rationale of the Scheme

Agriculture and allied activities are the primary income source for ~58% of total
population of India. ~85% of the farmers are Small Holding Farmers (SHFs) with less than 2
hectares of land under cultivation and manage ~45% of agricultural land. Annual income of
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majority of the farmers is very low. Further, India has limited infrastructure connecting farmers
to markets and hence, 15-20% of yield is wasted which is relatively higher vs. other countries
where it ranges between 5-15%.Investment in agriculture in India has further been stagnant
with less than 2% CAGR over last 5 years. Investment in FY17 was ~ ₹ 2.19 lac crore out of
which private sector share was ~83% vs. a higher investment of ~ ₹ 2.50 lac crore in FY14 and
a higher share of private sector at ~88%. Also, lack of investor confidence is leading to lower
plowback ratio (~14% of Gross Value addition in FY18) vs. other sectors (~33% of Gross
Value addition in FY18).

3 Objectives of the Scheme

Tomobilize a medium - long term debt finances facility for investment in viable projects for
post-harvest management Infrastructure and community farming assets through incentives
and financial support in order to improve agriculture infrastructure in the country. This financing
facility will have numerous objective for all the stakeholders in the agriculture eco-system.
a. Farmers (including FPOs, PACS, Marketing Cooperative Societies, Multipurpose
cooperative societies,State Agencies, Agricultural Produce Market Committees
(Mandis), National & State Federations of Cooperatives, Federations of FPOs and
Federations of Self Help Groups (SHGs). etc.).
- Improved marketing infrastructure to allow farmers to sell directly to a larger
base of consumers and hence, increase value realization for the farmers.
This will improve the overall income of farmers.
- With investments in logistics infrastructure, farmers will be able to sell in the
market with reduced post-harvest losses and a smaller number of
intermediaries. This further will make farmers independent and improve
access to market.
- With modern packaging and cold storage system access, farmers will be
able to further decide when to sell in the market and improve realization.
- Community farming assets for improved productivity and optimization of
inputs will result in substantial savings to farmers.
b. Government
- Government will be able to direct priority sector lending in the currently
unviable projects by supporting through interest subvention, incentive and
credit guarantee. This will initiate the cycle of innovation and private sector
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 investment in agriculture.
- Due to improvements in post-harvest infrastructure, government will further
be able to reduce national food wastage percentage thereby enable
agriculture sector to become competitive with current global levels.
- Central/State Government Agencies or local bodies will be able to structure
viable their own or PPP projects for attracting investment in agriculture
infrastructure.
c. Agri entrepreneurs and startups
- With a dedicated source of funding, entrepreneurs will push for innovation
in agriculture sector by leveraging new age technologies including IoT, AI,
etc.
- It will also connect the players in ecosystem and hence, improve avenues
for collaboration between entrepreneurs and farmers.
d. Banking ecosystem
- With Credit Guarantee, incentive and interest subvention lending institutions
will be able to lend with a lower risk. This scheme will help to enlarge their
customer base and diversification of portfolio.
- Refinance facility will enable larger role for cooperative banks and RRBs.
e. Consumers
- With reduced inefficiencies in post-harvest ecosystem, key benefit for
consumers will be a larger share of produce reaching the market and
hence, better quality and prices. Overall, the investment via the financing
facility in agriculture infrastructure will benefit all the eco-system players.

4 Implementation Period of Scheme

The Scheme will be operational from 2020-21 to 2032-33. Loan disbursement under the
scheme will complete in six years. During the financial year 2020-21, the projects amounting to
about ₹ 4000 crore have been sanctioned under the scheme. The financing facility of the
balance amount of ₹ 96,000 crore will be distributed @ ₹16,000 crore for 2021-22 and @ ₹
20,000 crore per year for the next four years w.e.f. 2022-23 to 2025- 26. Repayment period
covered under the financing facility will be for a maximum period of 7 years including the
moratorium period of up to 2 years.

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5 Government Budgetary Support

Budgetary support will be provided for interest subvention and credit guarantee fee as also
administrative cost of PMU. The details are as below:-

Sl. No. Name of Norms

Component
1 Interest All loans under this financing facility will have interest
Subvention subvention of 3% per annum up to a limit of ₹ 2 crore. This
Cost subvention will be available for a maximum period of 7 years.
In case of loans beyond ₹ 2 crore, then interest subvention
will be limited up to ₹ 2 crore. The extent and percentage of
funding to private entrepreneurs out of the total financing
facility may be fixed by the National Monitoring Committee.
2 Credit Credit guarantee coverage will be available for eligible
Guarantee borrowers from this financing facility under Credit Guarantee
Cost Fund Trust for Micro and Small Enterprises (CGTMSE)
scheme for a loan up to ₹ 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 DA&FW. However, FPOs are also
eligible for reimbursement of credit guarantee fee under AIF.
3 Administration Farmers Welfare Programme Implementation Society under
Cost of PMU DACFW will provide PMU support to the scheme at the
central level and state PMUs of PM KISAN at state level.
Services of knowledge partners will be engaged to identify
clusters including export clusters and gaps in supply chains
to target projects and prepare viable project reports to
support the beneficiaries.

6 Eligible Projects
The scheme will facilitate setting up and modernization of key elements of the value
chain including
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(A) Post Harvest Management Projects like:
(i) Supply chain services including e-marketing platforms
(ii) Warehouses
(iii) Silos
(iv) Pack houses
(v) Assaying units
(vi) Sorting &grading units
(vii) Cold chains
(viii) Logistics facilities
(ix) Primary processing centers
(x) Ripening Chambers

(B) Viable projects for building community farming assets including –

(i) Organic inputs production
(ii) Bio stimulant production units
(iii) Infrastructure for smart and precision agriculture.
(I) The following projects for individual beneficiaries as well as Farmers
’Communities such as FPOs, PACS, SHGs, JLGs, Cooperatives, National and
State Level Federation of Co-operatives, FPOs federations, Federations of
SHGs, National and State Level Agencies etc. as these are for the benefit of
community.

a. Farm/Harvest Automation
b. Purchase of drones, putting up specialized sensors on field,
Blockchain and AI in agriculture etc.
c. Remote sensing and Internet of Things (IOT) such as automatic
weather station, Farm advisory services through GIS applications

(II) Only for FPOs, PACS, SHGs, JLGs, Cooperatives, National and State Level
Federation of Co-operatives, FPOs federations, Federations of SHGs,
National and State Level Agencies etc as they qualify as community farming
assets.

1. Hydroponic Farming – Hydroponics is a type of horticulture and a

subset of hydro culture which involves growing plants without soil,
by using mineral nutrient solutions in an aqueous solvent.
2. Mushroom farming – Mushroom Spawn, preparing of compost,
Spawning of mulch, Casing, mushroom production, harvest and
supply chain infrastructure
3. Vertical farming – It is the practice of growing crops in vertically
stacked layers. It often incorporates controlled-environment
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 agriculture, which aims to optimize plant growth, and soil-less
farming techniques
4. Aeroponic farming- It is the process of growing plants in an air or
mist environment without the use of soil or an aggregate medium.
5. Poly house/ Greenhouse – It is a technique where specialized
polythene sheet is used as a covering material under which the
crops can be grown in partially or fully controlled climatic conditions.

(iv) Projects identified for providing supply chain infrastructure for clusters of crops
including export clusters.
(v) Projects promoted by Central/State/Local Governments or their agencies under PPP
for building community farming assets or post-harvest management projects.

Note: Digital Connectivity and optic fiber infrastructure shall be eligible investment as
part of development of the aforementioned eligible projects.

7 Size of the financing facility and eligible beneficiaries

₹ 1 Lakh Crore to be provided by banks and financial institutions as loans to Primary

Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Farmer Producers
Organizations(FPOs), Self Help Group (SHG), Farmers, Joint Liability Groups (JLG),
Multipurpose Cooperative Societies, Agri-entrepreneurs, Startups and Central/State agency or
Local Body sponsored Public Private Partnership Projects, State Agencies, Agricultural
Produce Market Committees (Mandis), National & State Federations of Cooperatives,
Federations of FPOs (Farmer Produce Organizations) and Federations of Self Help Groups
(SHGs). APMCs operating regulated markets for agriculture and allied sector produce
including fisheries shall also be eligible.

PACS who have adopted digitization for handling its operations will be given preference under
this scheme.

8 Number of Projects per entity eligible under the scheme

Interest subvention for a loan upto₹ 2 crore in one location is eligible under the scheme.
Multiple projects in one location are also eligible with an overall cap of Rs.2 crore. ln case, one
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eligible entity puts up projects in different locations then all such projects will be eligible under
the scheme for loan upto₹ 2 crore. However, for a private sector entity, such as farmer, agri
entrepreneur, start-up there will be a limit of maximum of 25 such projects. This limitation of 25
projects will not be applicable to state agencies, cooperatives, national and state federations of
cooperatives, FPOs, federations of FPOs, SHGs and federation of SHGs. Location will mean
physical boundary of a village or town having a distinct LGD (Local Government Directory)
code. Each of such project should be in a location having a separate LGD (Local Government
Directory) Code.

For APMCS, multiple projects of different infrastructure types can be sanctioned in its
designated market area. ln such cases, interest subvention for a loan upto₹ 2 Crore will be
provided for each project of different infrastructure types e.g. cold storage, sorting, grading and
assaying units, silos, etc. within the designated market area of the APMC.

9 Participating institutions
All scheduled commercial banks scheduled cooperative banks, Regional Rural Banks (RRBs),
Small Finance Banks, Non-Banking Financial Companies (NBFCs) and National Cooperative
Development Corporation (NCDC) may participate to provide this financing facility, after
signing of Memorandum of Understanding (MoU) with National Bank for Agriculture & Rural
Development (NABARD)/DA&FW.

10 Refinance
If required, need based refinance support will be made available by NABARD to all eligible
lending entities including cooperative banks and RRBs as per its policy.

11 Cap on lending rate

Lending rate of participating lending entities will be decided after due consultation with lending
entities and same will be circulated to all stake holders. Lending institutions will sign MOU with
DA&FW/ NABARD for implementation of the Scheme. MOUs to be signed by
DA&FW/NABARD with banks/financial institutions with a view that DA&FW/NABARD will
negotiate cap on lending rates in a fair manner.

12 Project Management and handholding support

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An online platform will be made available in collaboration with participating lending institutions
to provide information and loan sanctioning facility.Agri Infra fund will be managed and
monitored through an online MIS platform. It will enable all the qualified entities to apply for
loan under the fund. The system will also provide benefits such as transparency of interest
rates offered by multiple banks, scheme details including interest subvention and credit
guarantee offered, minimum documentation, faster approval process as also integration with
other scheme benefits. At the back end, the platform will also provide multiple views of
dashboards across district; state and national level PMUs to monitor the total sanctioned
amount and number of borrowers, total interest subvention benefit availed, loan statement
summary, demographic and geographic mix of borrowers and type of projects.

Farmers Welfare Programme Implementation Society under DACFW will provide PMU support
to the scheme at the central level and state PMUs of PM KISAN at state level. Services of
knowledge partners will be engaged to identify clusters including export clusters and gaps in
supply chains to target projects and prepare viable project reports to support the beneficiaries.

Project reports with indicative unit costs will be prepared by Central and State PMUs for
guidance of beneficiaries and lending entities. Such project reports shall be available on online
platform.

13 Convergence
Any grant or subsidy available under any present or future scheme of Central/State
government can be availed for projects under this financing facility. In cases of capital subsidy
such amount shall be considered as promoter’s contribution. However, a minimum of 10% of
the project cost shall be mandatory as promoter’s contribution.

14 Revisit of the Scheme

The scheme will be re-visited by Department of Expenditure after disbursement of ₹ 20,000
crore is completed, for evaluation and midcourse correction if required.Concurrent/mid-term
third party independent evaluation of the scheme in addition to end- line evaluation will be
conducted as and when required.

15 Monitoring framework
The National, State and District Level Monitoring Committees to ensure real-time
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monitoring and effective feed-back about the implementation of the proposed scheme. The
Committees will be set up as per Annexure-A.

All assets created under this financing facility shall be geo tagged. The District Monitoring
Committee and respective lending entity shall ensure that updated information on such geo
tagged assets is available on the online portal.

16 OUTPUT AND OUTCOME MONITORING FRAMEWORK (OOMF)

The Output and Outcome Monitoring Framework (OOMF) (Annexure-B) will be a part of
monitoring system and the measurement of outcome indicators will be monitored periodically
by DLMC, SLMC and NLMC.

17 Linkage with PFMS

Interest subvention and credit guarantee support will be released to Banks and lending
institutions through PFMS.

Disbursal of funds by lending entities to beneficiaries under this scheme shall be in Aadhaar
linked bank account.

18 Criteria for selection of Eligible Borrower

Lending institutions will decide criteria for selection of eligible borrower in consultation with
NABARD and monitoring committees, PMUs and keeping in mind the viability of the projects
and to avoid NPA.

19 VGF Requirement

In case VGF requirement is projected by central / state / local bodies, norms as prescribed by
DEA for PPP projects will be adhered to.

20 Sector specific focus

24% of total grants – in – aid under the scheme should be utilized for SC/ST entrepreneurs
(16% for SC and 8% for ST). Besides this, lending institutions would ensure adequate

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coverage of entrepreneurs belonging to women and other weaker segments of society may be
provided loan on priority basis to ensure that benefits of implementation are inclusive and
accrued to the intended beneficiaries in accordance with Government guidelines and policies.

21 State specific focus

Tentative State wise allocation of financing facility has been worked out on the basis of the
ratio of total value of output of Agriculture and Allied sectors of States/UTs and placed at
Annexure- C

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 Annexure-A

Monitoring framework

(i) National level Monitoring Committee (NLMC)

Composition :-

Following will be the Members and Chairman of the NLMC:-

a. Secretary (DA&FW) (Chairman)

b. MD SFAC
c. MD,NCDC
d. Special Secretary/Additional Secretary and FA (DA&FW)
e. Additional Secretary DFS
f. Additional Secretary (DA&FW,GoI)
g. Chairman, NABARD or his representative
h. Principal Secretary-State Government (s)- Four States by rotation
i. State Nodal Officers of four States (by rotation)
j. Joint Secretary (DA&FW) and CEO of Farmers Welfare Programme Implementation
Society- Member Secretary

Functions:-

1. National level Monitoring Committee (NLMC) will guide and steer the implementation of
the scheme. It will approve the guidelines for implementation of the scheme.

2. National level Implementation Committee (NLIC) will examine and recommend the
guidelines for implementation of the scheme. It also will ensure and review the implementation
of the scheme as per approved guidelines by the National level Monitoring Committee (NLMC)

(ii) State level Monitoring Committee

Composition:-

Following will be Members and Chairman of the SLMC :-

a. Chief Secretary –Chairman

b. Agriculture Production Commissioner/Principal Secretary Agriculture
c. Principal Secretary (Cooperation)
d. Registrar of Cooperative Societies (RCS)
e. Chief General Manager (CGM), NABARD
f. Regional Director, NCDC

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g. Officers nominated by State (not more than three).
h. SLBC Convener.
i. State Nodal Officer- Member Secretary.

Functions:-

1. State level Monitoring Committee (SLMC) will implement the NIMC guidelines at the
state level and provide feedback to NIMC.

2. It will also guide and steer the implementation of the scheme in the state.

3. It will set the targets as per OOMF format and review the progress regularly

(iii) District Level Monitoring Committee

Composition:-

Following will be Members and Chairman of the DLMC:-

b. District Collector – Chairman

c. Chief Executive Officer of District Panchayat/CDO- Vice Chairman
d. District Officer of Agriculture
e. District Registrar Officers nominated Cooperative Societies
f. Officers nominated by State (not more than three)
g. Lead District Manager of DLBC
h. District Manager NABARD- Member Secretary

Functions:-

1. District level Monitoring Committee (DLMC) The DLMC will be the first line of
implementation and monitoring system within the overall framework.

2. DLMC will set targets in consultation with SLMC as per OOMF format and monitor
the progress closely with the support of PMU.

3. DLMC will maintain the Dashboard in collaboration with PMU.

4. It will be responsible for the smooth implementation of the scheme and resolve any
issues at the district level. In the process of sorting out implementation issues the
Committee would be supported by the district administration wherever required.

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 Annexure-B
OOMF Framework
OUTPUTS:
Output statement Output Indicators Target Achievement
Promoting creation No. of projects submitted by
and modernization eligible entities
of agriculture
Disbursement of funds for
infrastructure
eligible projects/investments
(₹Crore)
Increase in amount Amount outgo on account of
of interest interest subvention (₹Crore)
subvention and No. of projects receiving interest
credit guarantee subvention
support provided Percent projects receiving
interest subvention (of the total
projects offered loan under the
scheme)
Amount outgo on credit
guarantee coverage (₹Crore)
Average percent credit
guarantee coverage of the total
credit extension under the
scheme.

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OUTCOMES:
Outcome Statement Outcome Indicators Target Achievement
Improvement in Percentage of fund utilized for
resource provision completed projects
for agriculture Additional investments leveraged
infrastructure due to agriculture infrastructure
fund interventions (₹Crore)
Enhancement in Total capacity addition in
agriculture agriculture sector due to
infrastructure infrastructure activities funded
capacity (MT)
Reduction in post-harvest losses
and food wastages (%)

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 Annexure-C

Tentative Allocation of Financing Facility among States/UTs

Sl. No. State Financing Facility INR Crore

1
Uttar Pradesh 12831
2
Rajasthan 9015
3
Maharashtra 8460
4
Madhya Pradesh 7440
5
Gujarat 7282
6
West Bengal 7260
7
Andhra Pradesh 6540
8
Tamil Nadu 5990
9
Punjab 4713
10
Karnataka 4525
11
Bihar 3980
12
Haryana 3900
13
Telangana 3075
14
Kerala 2520
15
Odisha 2500
16
Assam 2050
17
Chhattisgarh 1990
18
Jharkhand 1445
19
Himachal Pradesh 925
20
Jammu & Kashmir &Ladakh 900
21
Uttarakhand 785
22
Tripura 360
23
Arunachal Pradesh 290
24
Nagaland 230
25
Manipur 200

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Sl. No. State Financing Facility INR Crore

26
Mizoram 196
27
Meghalaya 190
28
Goa 110
29
Delhi 102
30
Sikkim 56
31
Puducherry 48
32
A & N Islands 40
33
Daman & Diu 22
34
Lakshadweep 11
35
Dadra & Nagar Haveli 10
36
Chandigarh 9

Total 1,00,000

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