A new way to fix post-harvest waste is here

Robust agricultural infrastructure is key to reducing post-harvest waste which remains high in India. The new Agricultural Infrastructure Fund (AIF) has investment proposals worth 23,000 crore, accelerating change in that direction. Mint decodes its benefits.

What is the purpose of the agricultural fund?

About 58% of the Indian population is engaged in agriculture and related activities. Of these, 85% manage 45% of agricultural land – smallholder farmers of less than 2 hectares and have limited or no access to storage and warehousing facilities. Of India’s total agricultural output, 15-20% is wasted due to poor post-harvest infrastructure, while in other countries, the wastage is 5-15%. The objective of the AIF is to provide medium and long-term debt financing facilities to build affordable and financially viable post-harvest management infrastructure, thereby strengthening the country’s agricultural ecosystem.

How does the agri infra fund work?

The government announced the 1 trillion funds in 2020 to provide finance facility for agricultural infrastructure projects at farm gates and aggregation points. The loans, with an interest subsidy of 3% per annum for a period of seven years, provide financial support and a credit guarantee for the construction of processing and storage facilities. This will help improve access to storage and warehousing facilities, cold chains and ripening chambers, etc., thereby reducing post-harvest losses. Its intended beneficiaries are agricultural producer organizations, agricultural marketing committees, farmers and self-help groups.

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What is the current status of the agri infra fund?

The Center recently announced that proposals for 23,000 crores of investments were received, including investment proposals worth 13,000 crores are under consideration. The government has also proposed to create 10,000 agricultural producer organizations through NABARD. A robust post-harvest infrastructure will help farmers and the country as a whole.

How will an effective AIF help the economy?

The development of agricultural infrastructure will help India take the dynamics of agricultural production to the next level. This would help to reduce food waste and thus allow agricultural production to become more competitive, the benefits of which would trickle down to the farmer level in terms of higher incomes. In addition, the farmer would be able to keep his production and supply the market according to demand conditions. Access to community agriculture assets will help improve productivity levels.

What is there for the general public?

The fact that agri infra projects are worth 23,000 crore is in the pipeline should reassure farmers and consumers. Studies have shown that from farm to final point of sale, nearly half of agricultural produce is wasted due to poor infrastructure. Efficient use of AIF will minimize wastage, which will lower prices, leading to improved consumption, especially among marginal sections. This can lead to an overall improvement in living standards, health care, and longevity.

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