Agri-Market Infrastructure Fund | 08 Feb 2019

Recently, the Cabinet Committee on Economic Affairs (CCEA) approved a corpus of Rs. 2,000 crore for Agri Market Infrastructure Fund (AMIF) to be created with NABARD for development and upgradation of agricultural marketing infrastructure in rural agricultural markets.

  • The Agri-Market Infrastructure Fund was announced in 2018 Budget for developing and upgrading agricultural marketing infrastructure in the 22,000 Gramin Agricultural Markets (GrAMs) and 585 Agricultural Produce Market Committee (APMC).
  • At present, GrAMs are being developed from MGNREGA fund.
  • The scheme being demand-driven, progress will depend on demand from states

NABARD

  • National Bank for Agriculture and Rural Development (NABARD) came into existence on the recommendation of B. Sivaraman Committee.
  • It was approved by the Parliament through Act of 1981 and came into existence in 1982 by transferring the agricultural credit functions of RBI and refinance functions of the then Agricultural Refinance and Development Corporation (ARDC).
  • Functions of NABARD: 
    • NABARD gives high priority to projects formed under the Integrated Rural Development Programme (IRDP).
    • It provides finance to support poverty alleviation programs run by IRDP.
    • It also makes the service area plan to provide backward and forward linkages and infrastructural support.
    • It seeks to establish linkages between Self-help Group (SHG) that are organized by voluntary agencies for poor and 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‘.
    • It also supervises the cooperative banks and Regional Rural Banks to periodically ensure the development of the rural financing and farmers’ welfare.

Objectives

  • The fund will provide subsidised loans to states and Union Territories for 585 APMC mandis and 10,000 GrAMs.
  • States can also utilise this fund for innovative integrated market infrastructure projects, including hub and spoke model and in private-public partnership mode.

Significance

  • More than 86% of farmers in India are small and marginal who are not always in a position to directly transact at APMCs and other wholesale markets.
  • A network of rural godowns enables small farmers to enhance their holding capacity in order to sell their produce at remunerative prices and avoid distress sales.
  • Accordingly, Government of India launched ‘Grameen Bhandaran Yojana’ in 2001, which has been subsumed into "Agricultural Marketing Infrastructure (AMI)" from 2014.
  • Main objectives of scheme include creation of scientific storage capacity with allied facilities in rural areas to meet out various requirements of farmers for storing farm produce, processed farm produce, agricultural inputs, etc.