Animal Husbandry Infrastructure Development Fund (AHIDF)

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Context

• The Union Cabinet approved a three-year extension for the Animal Husbandry Infrastructure Development Fund (AHIDF).

Animal Husbandry Infrastructure Development Fund

Commencement:

• The Animal Husbandry Infrastructure Development Fund (AHIDF) was announced and approved by the Union Cabinet on June 24, 2020.

Nature of the Scheme:

• AHIDF operates as a Central Sector Scheme, emphasizing its central government-driven nature.

Integration with Infrastructure Development Fund (IDF):

• AHIDF is implemented under the broader umbrella of the Infrastructure Development Fund (IDF).

Funding Allocation:

• The scheme had an initial budget allocation of Rs. 15,000 crore, signifying the government's commitment to promoting infrastructure in the animal husbandry sector.

Prime Minister’s Atma Nirbhar Bharat Abhiyan:

• AHIDF is aligned with the Prime Minister’s Atma Nirbhar Bharat Abhiyan, showcasing its strategic importance in achieving self-reliance in the animal husbandry sector.

Nodal Agency:

• The Department of Animal Husbandry and Dairying serves as the nodal agency responsible for managing and overseeing the fund.

Duration:

• The fund was initially approved for a specific period, and subsequently, the Union Cabinet extended its implementation for another three years until 2025-26.

Objectives of AHIDF:

• Increase milk and meat processing capacity and encourage product diversification.
• Provide unorganized rural milk and meat producers access to organized markets.
• Ensure higher price realization for producers.
• Deliver quality milk and meat products for domestic consumers.
• Address malnutrition issues among children.
• Foster entrepreneurship and generate employment.
• Promote exports in the milk and meat sector.
• Provide quality concentrated animal feed to various livestock at affordable prices.

Eligible Beneficiaries:

• FPOs (Farmers Producers Organizations)
• MSMEs (Micro, Small, and Medium Enterprises)
• Section 8 Companies
• Private Companies
• Individual Entrepreneurs

Contribution and Funding Structure:

• Beneficiaries are required to contribute a minimum of 10% as margin money.
• The remaining 90% is provided as a loan component by scheduled banks.

Incentivized Activities:

• Dairy processing and diversified products’ infrastructure.
• Meat and meat product processing infrastructure.
• Establishment of feed manufacturing units.

Fund Management:

• AHIDF, along with an interest subvention scheme for private investors, ensures capital availability for upfront investments.
• The government offers a 3% interest subvention to eligible beneficiaries.
• A 2-year moratorium period for the principal loan amount is provided, followed by a 6-year repayment period.

Credit Guarantee Fund:

• A Credit Guarantee Fund of Rs. 750 crore is established and managed by NABARD.
• Guarantee coverage is up to 25% of the credit facility for sanctioned projects falling under MSME defined ceilings.

Significance of AHIDF:

• Approximately 50-60% of the final value of dairy output in India goes back to farmers.
• Growth in the sector has a direct impact on farmer income.
• AHIDF incentivizes private investment, motivating farmers to invest more in inputs, thus increasing productivity and overall income.

Impact:

• Leverages private investment, potentially 7 times the initial investment.
• Encourages farmers to invest more in inputs, leading to higher productivity and increased income.

Extension of Animal Husbandry Infrastructure Development Fund (AHIDF)

Cabinet Approval:

• The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, approved the continuation of AHIDF under the Infrastructure Development Fund (IDF).
• The allocated budget for the scheme is Rs.29,610.25 crore for an additional three years, extending up to 2025-26.

Incentivized Investments:

• AHIDF encourages investments in various sectors, including Dairy processing and product diversification, Meat processing and product diversification, Animal Feed Plant, Breed multiplication farm, Animal Waste to Wealth Management (Agri-waste management), and Veterinary vaccine and drug production facilities.

Interest Subvention:

• The Government of India offers a 3% interest subvention for 8 years, including a two-year moratorium period, for loans up to 90% from scheduled banks, National Cooperative Development Corporation (NCDC), NABARD, and NDDB.

Eligible Entities:

• Individuals, Private Companies, Farmers Producers Organizations (FPOs), MSMEs, and Section 8 companies are eligible entities.

Credit Guarantee:

• Credit guarantee is provided to MSMEs and Dairy Cooperatives, covering up to 25% of the credit borrowed from the Credit Guarantee Fund of Rs.750 crore.

Impact of AHIDF:

• AHIDF has contributed significantly to the sector, adding 141.04 LLPD of milk processing capacity, 79.24 lakh metric tons of feed processing capacity, and 9.06 lakh metric tons of meat processing capacity to the supply chain.
• It has increased processing capacity by 2-4% in the dairy, meat, and animal feed sectors.

Diverse Investment Opportunities:

• Investors are encouraged to explore opportunities in various aspects of the Livestock sector, including value addition, cold chain, integrated units of Dairy, Meat, Animal Feed units, technologically assisted Livestock and Poultry farms, Animal Waste to Wealth Management, and setting up Veterinary Drugs/Vaccine units.

Employment Generation and Wealth Creation:

• The scheme aims to generate direct and indirect employment for around 35 lakh people through entrepreneurship development.
• Approximately 15 lakh farmers have directly or indirectly benefited from AHIDF, contributing to the Prime Minister’s goal of doubling farmers’ income.

Economic Contribution:

• AHIDF is recognized as a significant contributor to the nation's economy by promoting the export of Livestock products.
• Investments through AHIDF not only leverage private investment sevenfold but also motivate farmers to invest more in inputs, driving higher productivity and increasing farmers' income.

Future Potential:

• With the inclusion of new activities like technologically assisted breed multiplication farms, strengthening of veterinary drugs and vaccine units, and Animal waste to wealth management, AHIDF is poised to have a substantial impact on upgrading infrastructure in the Livestock sector.

PRACTICE QUESTION Q. Identify the correct features associated with the Animal Husbandry Infrastructure Development Fund (AHIDF): A) AHIDF focuses on promoting investments in urban infrastructure for animal welfare. B) AHIDF incentivizes developments in the Livestock sector, including dairy and meat processing, animal feed plants, and veterinary facilities. C) AHIDF provides subsidies for agricultural equipment in both urban and rural areas. D) The government provides a 3% interest subvention for 8 years, including a two-year moratorium period, for loans up to 90%  from scheduled banks. Select the correct option: A and B only B only B and D only C only Answer: 3) B and D only Explanation: AHIDF focuses on promoting investments in urban infrastructure for animal welfare: This statement is incorrect. AHIDF primarily aims to incentivize developments in the Livestock sector, emphasizing areas such as dairy and meat processing, animal feed plants, and veterinary facilities. It is not specifically geared towards urban infrastructure for animal welfare. AHIDF incentivizes developments in the Livestock sector, including dairy and meat processing, animal feed plants, and veterinary facilities: This statement is correct. AHIDF is designed to encourage investments in key areas of the Livestock sector, fostering infrastructure development in dairy and meat processing, animal feed plants, breed multiplication farms, and veterinary vaccine/drug manufacturing facilities. AHIDF provides subsidies for agricultural equipment in both urban and rural areas: This statement is incorrect. AHIDF does not primarily focus on providing subsidies for agricultural equipment. Its main emphasis is on infrastructure development in the Livestock sector. The government provides a 3% interest subvention for 8 years, including a two-year moratorium period, for loans up to 90%  from scheduled banks.: This statement is correct. The government provides a 3% interest subvention for 8 years, including a two-year moratorium period, for loans up to 90% from scheduled banks, National Cooperative Development Corporation (NCDC), NABARD, and NDDB. Therefore, the correct answer is 3) B and D only.