Understanding AHIDF

• The Union Cabinet announced the approval of the Animal Husbandry Infrastructure Development Fund on June 24, 2020.
• The Department of Animal Husbandry and Dairying is the nodal agency managing the fund. You can find more details on the official website (ahidf.udyamimitra.in).
• AHIDF aims to incentivize investments in the establishment of infrastructure for dairy and meat processing and value addition infrastructure and the establishment of an animal feed plant in the private sector.
• The eligible beneficiaries under the Scheme would be FPOs, MSMEs, Section 8 Companies, Private Companies and individual entrepreneurs who will contribute a minimum of 10% margin money. The remaining 90% would be the loan component provided by scheduled banks.
• The activities that AHIDF will incentivize include dairy processing and diversified products’ infrastructure, meat and meat product processing infrastructure, and the establishment of feed manufacturing units.

Objectives of the Animal Husbandry Infrastructure Development Fund

• To increase milk and meat processing capacity and product diversification, thus providing unorganized rural milk and meat producers with greater access to the organized milk and meat market.
• To ensure increased price realization for producers.
• To provide quality milk and meat products for domestic consumers.
• To meet the protein-enriched quality food requirements of the country's growing population and prevent malnutrition, which is prevalent among children.
• To foster entrepreneurship and generate employment.
• To promote exports and increase the export contribution in the milk and meat sector and provide quality concentrated animal feed to cattle, buffalo, sheep, goat, pig, and poultry at affordable prices.

AHIDF – Fund Management

• The INR 15,000 crore AHIDF and the interest subvention scheme for private investors will ensure the availability of capital to meet the upfront investment required for the projects and also help enhance overall returns/ payback for investors.
• The government of India will provide a 3% interest subvention to eligible beneficiaries. There will be a 2 years moratorium period for the principal loan amount and 6 years repayment period thereafter.
• A Credit Guarantee Fund of Rs. 750 crore 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 up to 25% of the Credit facility of the borrower.

Significance of AHIDF

• Since almost 50-60% of the final value of dairy output in India flows back to farmers, therefore, growth in this sector can have a significant direct impact on farmer’s income.
• The size of the dairy market and farmers’ realization from milk sales is closely linked with the development of organized off-take by cooperative and private dairies.
• Thus, investment incentivization in AHIDF would not only leverage 7 times private investment but would also motivate farmers to invest more in inputs thereby driving higher productivity leading to an increase in farmers income.