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CCEA approves establishment of Animal Husbandry Infrastructure Development Fund

The Animal Husbandry Infrastructure Development Fund would facilitate much-needed incentivisation of investments for dairy and meat processing and value addition infrastructure.

Jun 24, 2020 18:27 IST
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The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, has approved setting up of Animal Husbandry Infrastructure Development Fund (AHIDF) worth Rs 15000 crore. The fund is a part of the Atma Nirbhar Bharat Abhiyan stimulus package that was announced by Finance Minister Nirmala Sitharam to revive economic growth. 

The Animal Husbandry Infrastructure Development Fund would facilitate much-needed incentivisation of investments for dairy and meat processing and value addition infrastructure and establishment of animal feed plant in the private sector.  

Who will be the eligible beneficiaries?

The eligible beneficiaries of the AHIDF fund will be Farmer Producer Organizations (FPOs), MSMEs, Section 8 Companies, Private Companies and individual entrepreneurs with a minimum 10 percent margin money contribution by them. The remaining 90 percent will be loan component to be made available by scheduled banks.

Key Highlights 

The centre will provide 3 percent interest subvention to the eligible beneficiaries. They will also be given 2 years moratorium period for principal loan amount and 6 years repayment period thereafter.

The Indian Government would also set up a Credit Guarantee Fund worth Rs 750 crore to be managed by NABARD. 

The scheme will be provided to those sanctioned projects that are covered under MSME defined ceilings. The guarantee coverage would be upto 25 percent of the Credit facility of the borrower.

Significance

The Animal Husbandry Infrastructure Development Fund and the interest subvention scheme will ensure the availability of capital to meet the upfront investment required for these projects and it will also help enhance overall returns and payback for investors. Overall, there is a huge potential waiting to be unlocked in investment through the private sector. 

The investments in processing and value addition infrastructure by eligible beneficiaries will help promote the export of these processed and value-added commodities.

Benefit

Almost 50-60% of the final value of Indian dairy output flows back to farmers. Therefore, growth in this sector can have a major direct impact on the farmer’s income. 

The size of the dairy market and farmers’ realization from milk sales is very closely connected with the development of organized off-take by cooperative and private dairies. Hence, investment incentivization in AHIDF will not only leverage 7 times private investment but would also motivate farmers to invest more on inputs thus, enabling higher productivity and an increase in farmers' income. The special fund and measures approved under it will also help in direct and indirect livelihood creation for 35 lakh people.

Background

The Union Government has been implementing many schemes to incentivise investment made by the dairy cooperative sector for the development of dairy infrastructure. However, even MSMEs and Private companies also need to be promoted and incentivized for their involvement in processing and value addition infrastructure.

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