Why more funds and focus are needed to create agri infrastructure

After the extreme surge in tomato prices, it is now the turn of onion prices to soar. Maharashtra has more than 33 per cent share of India’s onion production, and farmers from Nashik district, which is the State’s onion hub, predict an onion shortage owing to late kharif sowing and damage caused to rabbi onion stored in chawls.

Despite housing Asia’s biggest onion market in Lasalgaon, Nashik farmers rue that they have to struggle to keep their onions safe from rains and humidity due to the unavailability of quality storage facilities. But this is not the only case for onion farmers. India has a 11 per cent share of global tomato production, but less than 1 per cent of India’s tomato production is processed due to a lack of processing facilities.

The NITI Aayog Strategy for New India identifies the lack of adequate and efficient cold chain infrastructure as a critical supply side bottleneck that leads to massive post-harvest losses (mostly of perishables) estimated at ₹92,561 crore annually. 

More efforts needed

“Many farmers don’t have any option than to store their produce in the field and cover it with plastic paper. Tonnes of soya, pulses go waste due to the damage caused because of unseasonal rains,” says Maruti Andhale from Aurangabad. Some of the farmers in the region even use crematorium sheds to save the produce from unseasonal rains.  

The government launched Agriculture Infrastructure Fund (AIF) under Aatmanirbhar Bharat Package in July 2020 to bridge the existing infrastructure gaps and mobilise investment in agriculture infrastructure. AIF is a medium- to long-term debt financing facility of ₹1-lakh crore to be financed by lending institutions for investment in viable projects for post-harvest management infrastructure and community farming assets. All loans under this financing facility have an interest subvention of 3 per cent per annum up to a limit of ₹2 crore.

According to government data, as on July 31, 2023, an investment of ₹44,208 crore has been mobilised in the country’s agriculture sector under this scheme. 33,369 projects related to post-harvest management and community farming assets have been approved, and a loan amount of ₹26,064 crore has been sanctioned for creating the infrastructure. 

Farmers, Farmer Producer Organisations, Primary Agricultural Credit Societies, Self Help Groups, and others have availed the benefits under the scheme. In 2022-23, 9,166 agri entrepreneurs, 5,319 farmers, 451 Primary Agricultural Credit Societies, 333 Farmer Producer Organisations, and 65 Self-Help Groups took advantage of this scheme; and in 2023-24 (up to July 31, 23), 2,554 agri-entrepreneurs, 3098 farmers, 47 Primary Agricultural Credit Societies, 93 Farmer Producer Organizations and 14 Self-Help Groups have availed the benefits of the scheme.

Data presented by the Ministry of Agriculture to the Lok Sabha this month reveals that Uttar Pradesh tops the list of States in the tentative State-wise allocation under AIF. India’s biggest State has been allocated 13 per cent of the total allocation, while Rajasthan stands second on the list with 9 per cent allocation. Maharashtra has received 8 per cent of the total allocation, and Madhya Pradesh and Gujarat 7 per cent of the allocation. These top five States have received ₹45,028 crore, which is 45 per cent of the total allocation to the States under this scheme.