Micro Irrigation Fund: Benefits, Eligibility, Guidelines, and FAQs

Posted by CMV360 Editorial Staff on 29-Mar-2023 09:59 AM

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The Indian central government has introduced a new initiative to support farmers through the creation of the Rs. 5000 crore Micro Irrigation Fund. The primary goal of this fund is to encourage the implementation of micro-irrigation systems among farmers in the country.

Under this scheme, farmers will be able to install micro-irrigation systems with additional subsidies provided by both the central and state governments. The central government will offer a 55% subsidy on micro-irrigation systems to small and marginal farmers, while the state government will provide an extra subsidy for the same through the Micro Irrigation Fund.

For other farmers, the central government will offer a 45% subsidy on micro-irrigation systems, and the state government will provide additional subsidies to enhance the implementation of micro-irrigation systems. It is expected that small and marginal farmers will benefit the most from this scheme.

In addition, farmers who install micro-irrigation systems will receive three years of free service after installation. This initiative is expected to go a long way in promoting sustainable agricultural practices and reducing water wastage, benefiting both farmers and the environment.

Key Highlights of Micro Irrigation Fund (MIF)

Here are the key points about the Micro Irrigation Fund in India:

• The Indian government is committed to providing access to irrigation for agriculture through water conservation and management.
• Agriculture in India is heavily dependent on the monsoon, but its distribution is not uniform, and climate change is affecting rainfed farming.
• Micro irrigation is a way to ensure the availability of water for crops during critical growing periods.
• The Micro Irrigation Fund (MIF) has been created with NABARD to promote micro irrigation across India.
• The Ministry of Agriculture and Farmers Welfare has approved Rs. 5000 crore for setting up the MIF under the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).
• States can avail of the fund as a loan from NABARD at a lower interest rate, with the central government compensating 3% of the cost of funds.
• The MIF will provide subsidies to small and marginal farmers (55% of indicative unit cost) and other farmers (45% of indicative unit cost) to encourage them to install drip and sprinkler systems.
• States can provide additional top-up subsidies for micro irrigation through the MIF.
• The MIF can be used for innovative and integrated projects, including public-private partnerships, to boost micro irrigation across India.
• The target is to bring 69.55 million hectares of land under micro irrigation by adding 2 million hectares every year.
• Farmers Producers Organisation, cooperatives, and state-level agencies can avail of the MIF with state-level guarantees.
• The Indian Council of Agriculture Research will provide training and field demonstration through Kisan Vikas Kendra to promote micro irrigation.
• States will ensure energy support for micro irrigation.
• All activities under micro irrigation will be geo-tagged with a unique code on the PMKSY Bhuvan platform.
• The state government will pay back the loan in seven years.

Overview of Micro Irrigation Fund

Name of the Scheme - Micro Irrigation Fund.
Launched on - 16.05.2018.
Launched by - Central Government.
Nodal Agency - Ministry of Agriculture and Farmers Welfare.
Beneficiaries - Farmers

Benefits -

• Higher subsidy on micro irrigation system.
• Free service for 3 years after installation of micro irrigation system.
• Water use efficiency.
• Higher production.

Objectives of Micro Irrigation Fund (MIF)

The Micro Irrigation Fund (MIF) has been created by the Central Government to help state governments in expanding and promoting micro irrigation technology across the country. The main objective of the MIF is to prepare and organise resources for the expansion of micro irrigation by setting up special and innovative projects. The MIF aims to achieve the following objectives:

• Encourage farmers to install micro irrigation systems: The MIF aims to provide special subsidies on micro irrigation setups beyond the provision available under PMKSY. This will encourage farmers, especially small and marginal farmers, to install micro irrigation systems and enhance water use efficiency.

• Increase the area under micro irrigation: The MIF aims to bring 69.55 million hectares of agricultural land under micro irrigation. This will be achieved by adding 2 million hectares of agricultural land under micro irrigation every year through MIF.

• Provide loans at lower interest rates: The MIF will help state governments avail loans at a lower interest rate for a short period to implement micro irrigation technologies. The loan can be availed by Farmers Producers Organisation (FPOs), Cooperatives and State level Agencies with a state level guarantee or by other equivalent bodies.

• Encourage public-private partnership: The MIF will invest in special innovative projects, integrated projects, and projects including public-private partnership (PPP) mode. This will help in seeking private partnership in managing and boosting micro irrigation across India.

• Provide training and field demonstration: The Indian Council of Agriculture Research (ICAR) will impart training and field demonstration through Kisan Vikas Kendra (KVK) to promote micro irrigation. This will help farmers to understand the benefits of micro irrigation and how to use it efficiently.

• Ensure energy support for micro irrigation: The state government will ensure energy support for micro irrigation to promote sustainable farming practices.

• Monitoring and evaluation: All monitoring and evaluation requirements set down for the PMKSY shall also apply to the MIF scheme. This will help in tracking the progress of micro irrigation projects and identifying areas for improvement.

• Geo-tagging of micro irrigation projects: All activities under micro irrigation will be geo-tagged with a unique code on the PMKSY Bhuvan platform. This will help in tracking the location of micro irrigation projects and their progress.

Benefits of the MIF (Micro Irrigation Fund)

Benefits of the MIF (Micro Irrigation Fund) scheme for Farmers:

• Higher subsidy: Farmers can avail higher subsidy on installing the micro-irrigation system.
• Free service: After the installation of the micro-irrigation system, farmers will get three years of free service.
• Increased crop production: Micro-irrigation will help in higher crop production.
• Reduced labour cost: It will lead to a reduction in labour cost.
• Less water consumption: The judicious use of available water will lead to the availability of water resources for a longer duration.
• Lower power consumption: The use of micro-irrigation will reduce the financial burden of farmers by lowering power consumption.
• Reduced use of fertilizers: It will help in reducing the use of fertilizers and result in increased soil fertility.
• Better farm practices: Micro-irrigation will ensure better results in farm practices.
• Better water management: The judicious use of available water will lead to better water management.
• Improved livelihood: The use of micro-irrigation will improve the livelihood of farmers.

Read also: Overview of Government Schemes for Indian Farmers: Finance and Insurance Assistance for Agricultural Development

Benefits of Scheme for State Government:

• State government can avail of a short-term loan at a lower interest rate through MIF (Micro Irrigation Fund).
• The state government can implement public-private partnerships for micro irrigation projects based on state-specific requirements, resulting in new ideas and resources.
• On-farm water use efficiency, including storage, distribution, and use of water, will be implemented by states, contributing to the "Per Drop More Crop" concept of PMKSY (Pradhan Mantri Krishi Sinchayee Yojana).
• Sustainable agricultural development and food security will be ensured.
• The available water resources in the states will be used wisely and efficiently.
• The scheme will help cover rainfed areas with assured irrigation, reducing dependence on monsoon rains.
• States will have the opportunity to provide extra subsidies to encourage farmers to implement Micro Irrigation Systems.
• The scheme will create employment opportunities.
• Dependence on groundwater will be reduced, preventing further depletion of groundwater resources.

How to apply for Micro Irrigation Fund (MIF)

• Farmers can apply for loans through various organizations such as FPOs, Cooperatives, WUAs, State Level Agencies, or equivalent bodies.
• Loans are available for innovative cluster-based community irrigation projects.
• The cluster size must be 20 hectares or more for Northeast and Himalayan states, and 50 hectares or more for other states.
• The organizations will submit their proposals or projects to the State Level Sanction Committee (SLSC) of PMKSY.
• The Sanction Committee will review and approve the proposals and then forward them to the Steering Committee.
• The Steering Committee will examine the projects from state governments and recommend them for loan grants from NABARD.

Some Important Contact Details

• Contact Details for PMKSY (Pradhan Mantri Krishi Sinchayee Yojana) Support and Query: support.pmksy-dac@gov.in
• Kisan Call Center Number: 1800-180-1551
• Secretary, Ministry of Agriculture & Farmers Welfare, Department of Agriculture & Farmers Welfare: Krishi Bhawan, New Delhi-110001
• Helpdesk Numbers: 022 26539895, 022 26539896, 022 26539899
• NABARD (National Bank for Agriculture and Rural Development) Address: Plot C-24, G Block, Bandra Kurla Complex, BKC Road, Bandra East, Mumbai, Maharashtra 400051
• NABARD Helpline Phone Number: 011 25842836
• NABARD Helpline E-Mail: nraapc2007@gmail.com

Eligibility Criteria for Micro Irrigation Fund

The eligibility criteria to avail benefits from the Micro Irrigation Fund are as follows:

• Farmers, Farmers Producers Organizations (FPOs), Cooperatives, Water User Associations (WUAs), State Level Agencies or equivalent bodies are eligible to apply for loans under the scheme.

• The proposed project should be an innovative cluster-based community irrigation project.

• The minimum cluster size for Northeast and Himalayan states is 20 hectares, and for other states, it is 50 hectares.

• The project should be submitted to the State Level Sanction Committee (SLSC) of PMKSY.

• The Steering Committee examines and approves projects from the state government.

• The projects approved by the Steering Committee are recommended to NABARD for loan grant.

• The loans are granted at an interest rate of 3% to the state governments, which they can further lend to farmers and other eligible entities at an interest rate of 5%.

Some general guidelines for Micro Irrigation Fund

Here are some general guidelines for Micro Irrigation Fund:

• The funds can be utilized by the State Government, farmers, FPOs (Farmer Producers Organizations), Cooperatives, WUAs (Water Users Associations), and other eligible entities for setting up micro-irrigation projects.

• The projects should be innovative and should be able to enhance water use efficiency.

• The scheme provides subsidies on micro-irrigation projects beyond the provision available under Pradhan Mantri Krishi Sinchai Yojana (PMKSY).

• The scheme is available for both new and existing areas.

• The project should have a minimum cluster size of 20 hectares in North-Eastern and Himalayan States, and 50 hectares in other states.

• The projects should be submitted by eligible entities to the State Level Sanction Committee (SLSC) of PMKSY.

• The SLSC will then submit the project to the Steering Committee for approval.

• Once approved, the Steering Committee will recommend the project to NABARD for loan grant.

• The loan tenure is 7 years, including a grace period of 2 years.

• The interest rate charged on loans is 3% per annum, and the State Government can avail of short-term loans at a lower interest rate.

• The farmers and entities setting up micro-irrigation projects will receive free service for three years after installation.

• The scheme aims to improve crop production, reduce labor costs, improve water management, and provide higher soil fertility.

FAQs on Micro Irrigation Fund

Here are some FAQs on Micro Irrigation Fund:

Q1. What is Micro Irrigation Fund?

Ans: Micro Irrigation Fund (MIF) is a dedicated fund created by the Government of India to support and promote micro irrigation activities in the country.

Q2. Who is eligible to apply for the loan under the Micro Irrigation Fund?

Ans: Farmers, Farmers Producers Organisations (FPOs), Cooperatives, Water User Associations (WUAs), State Level Agencies, or equivalent bodies are eligible to apply for the loan.

Q3. What is the maximum loan amount that can be availed under the Micro Irrigation Fund?

Ans: The maximum loan amount that can be availed under the Micro Irrigation Fund is Rs. 10 crore.

Q4. What is the interest rate for the loan under the Micro Irrigation Fund?

Ans: The interest rate for the loan under the Micro Irrigation Fund is 3% per annum.

Q5. What is the repayment period for the loan under the Micro Irrigation Fund?

Ans: The repayment period for the loan under the Micro Irrigation Fund is 7 years, including a grace period of 2 years.

Q6. Can the loan under the Micro Irrigation Fund be pre-closed?

Ans: Yes, the loan under the Micro Irrigation Fund can be pre-closed without any pre-payment penalty.

Q7. Can farmers avail subsidy under the Micro Irrigation Fund?

Ans: Yes, farmers can avail higher subsidies on micro irrigation systems under the Micro Irrigation Fund.

Q8. What is the role of NABARD in the Micro Irrigation Fund?

Ans: NABARD (National Bank for Agriculture and Rural Development) is the implementation agency for the Micro Irrigation Fund. It is responsible for processing and sanctioning the loans, as well as monitoring and evaluating the projects.