The Cabinet Committee on Economic Affairs (CCEA) has recently sanctioned a fund of Rs. 2,000 crore for the Agri Market Infrastructure Fund (AMIF) which will be established in partnership with the National Bank for Agriculture and Rural Development (NABARD). This initiative aims to significantly upgrade and develop agricultural marketing infrastructure within rural agricultural markets.
The Genesis of Agri-Market Infrastructure Fund
The inception of the Agri-Market Infrastructure Fund was traced back to the 2018 Budget, where it was earmarked for developing and upgrading agricultural marketing infrastructure within 22,000 Gramin Agricultural Markets (GrAMs) and 585 Agricultural Produce Market Committee (APMC). Currently, these GrAMs are being developed utilizing funds from MGNREGA. As a demand-driven scheme, its progress is dependent on demands from states.
About NABARD
Established through an Act of Parliament in 1981 following the recommendations of the B. Sivaraman Committee, NABARD began its operations in 1982. It took over the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC).
Functions of NABARD
NABARD plays a crucial role in rural development by prioritizing projects under Integrated Rural Development Programme (IRDP). It provides financing to poverty alleviation programs run by the same. Additionally, it designs service area plans providing both backward and forward linkages along with infrastructural support. NABARD also establishes connections between Self-help Groups (SHGs) organized by voluntary agencies for the needy in rural areas and other official credit agencies. It finances projects under the ‘National Watershed Development Programme‘ and the ‘National Mission of Wasteland Development‘, and supervises cooperative banks as well as Regional Rural Banks.
Mission of the Fund
The primary objective of this fund is to offer subsidized loans to states and Union Territories for 585 APMC mandis and 10,000 GrAMs. States also have the opportunity to use this fund for innovative integrated market infrastructure projects, such as hub and spoke models, and in private-public partnership modes.
| Fund | Amount |
|---|---|
| Agri Market Infrastructure Fund (AMIF) | Rs. 2,000 Crore |
| Gramin Agricultural Markets (GrAMs) | 22,000 |
| Agricultural Produce Market Committee (APMC) Mandis | 585 |
Significance of the Fund
Almost 86% of Indian farmers are identified as small and marginal farmers who aren’t able to negotiate directly with APMCs and other wholesale markets. Thus, a network of rural godowns could help these farmers enhance their holding capacity enabling them to sell their produce at better prices, avoiding distress sales. To achieve this, the Government of India launched the ‘Grameen Bhandaran Yojana’ in 2001, which was later incorporated into the ‘Agricultural Marketing Infrastructure (AMI)’ from 2014. The main focus of this scheme is to establish scientific storage capacity with allied facilities in rural areas to cater to various farming-related needs.
