Context

In pursuance of recently announced Atma Nirbhar Bharat Abhiyan stimulus package for ensuring growth in several sectors, the Cabinet Committee on Economic Affairs has approved setting up of Animal Husbandry Infrastructure Development Fund (AHIDF) worth Rs. 15000 crore.

About

• AHIDF would facilitate much needed incentivisation of investments in establishment of such infrastructure for dairy and meat processing and value addition infrastructure and establishment of animal feed plant in the private sector.
• Eligibility: The eligible beneficiaries under the Scheme would be
  • Farmer Producer Organizations (FPOs)
  • MSMEs
  • Section 8 Companies
  • Private Companies and individual entrepreneur with minimum 10% margin money contribution by them. The balance 90% would be the loan component to be made available by scheduled banks.

Government of India will provide 3% interest subvention to eligible beneficiaries. There will be 2 years moratorium period for principal loan amount and 6 years repayment period thereafter.

Dairy Infrastructure Development Fund (DIDF) Government had earlier approved the Dairy Infrastructure Development Fund (DIDF) worth Rs. 10,000 crores. It aims to incentivize investment by cooperative sector for development of dairy infrastructure.

Credit Guarantee Fund

• A Rs.750 crore Credit Guarantee Fund would be set up and managed by NABARD.
• Credit guarantee would be provided to those sanctioned projects which are covered under MSME defined ceilings.
• Guarantee Coverage would be upto 25% of Credit facility of borrower.

Why India’s farming sector needs a boost?

• The livestock sector—within it, dairy—needs to play a larger role in the nation’s goal to double farmer’s income by FY23.
• Milk is the largest crop in India in terms of value—at `6.5 lakh crore, it’s more than the total value of paddy and wheat put together.
• Further, promoting dairy will also lead to a more equitable income, and this aspect needs to be appreciated.
• Milch animal holding is far more equitable than land holding. About 85% of the total farmers are small and marginal. While they together own about 47% of farmland, they own about 75% of milch animals.
• The productivity of milch animals in India is around one-eighth of the global average. Land prices in India are very high, which makes running large dairy farms unviable.
• So, dairy farming in India will continue to be dominated by small and marginal farmers.

Benefits of the Fund

• Focused investment: Investment incentivization in AHIDF would leverage 7 times private investment.
• Higher productivity in farming: It would also motivate farmers to invest more on inputs thereby driving higher productivity leading to increase in farmers income.
• Livelihood creation: The measures approved through AHIDF would also help in direct and indirect livelihood creation for 35 lakh.