Agricultural Infrastructure Fund (AIF)

Context:

• Union Cabinet redesigns Agri Infra Fund to cover FPOs

News:

• The Union Cabinet expanded the scope of the Agricultural Infrastructure Fund (AIF).
• The scheme, worth ₹1 lakh crore, would be redesigned to include financial support for Farmers’ Producers Organisations (FPOs) to enhance their financial security and creditworthiness.
• The Centre said the AIF would be more attractive now and strengthen the farm-related infrastructure facilities in the country.

About AIF:

• Financing: The financing facility will be provided for funding Agriculture Infrastructure Projects at farm-gate & aggregation points to agri entrepreneurs, farmers, Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Start-ups, state agencies, state sponsored Public Private Partnerships, etc.
• All scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs) and National Cooperative Development Corporation (NCDC) may participate to provide this financing facility, after signing of Memorandum of Understanding (MoU) with National Bank for Agriculture & Rural Development (NABARD)/DA&FW.
• If required, need based refinance support will be made available by NABARD to all eligible lending entities including cooperative banks and RRBs.
• Key objective: To mobilize a medium to long term debt financing facility for investment in viable projects for post-harvest management Infrastructure and community farming assets through incentives and financial support in order to improve agriculture infrastructure in the country.
• Coverage: The scheme covers post-harvest management projects like supply chain services including e-marketing platforms, warehouse, silos, pack-houses, assaying units, sorting & grading units, cold chain, logistics facilities, primary processing centers, ripening chambers and other viable projects for building community farming assets such as organic input production, bio stimulant production units etc.
• Interest subvention: All loans up to a limit of ₹ 2 crores under this financing facility will have interest subvention of 3% per annum.
• The Scheme will be operational from 2020-21 to 2032-33.
• Loan disbursement under the scheme will complete in six years, i.e. by the end of Financial Year 2025-26.
• 24% of total grants – in – aid under the scheme should be utilized for SC/ST entrepreneurs (16% for SC and 8% for ST).
• PSUs are directly not eligible under the scheme, but projects sponsored by them under PPP are eligible.

Benefits of AIF:

• Improved marketing infrastructure: It allows farmers to sell directly to a larger base of consumers and hence, increase value realization for the farmers. This will improve the overall income of farmers.
• Investments in logistics infrastructure: With this, farmers will be able to sell in the market with reduced post-harvest losses and a smaller number of intermediaries. This further will make farmers independent and improve access to market.
• Modern packaging and cold storage system access: With this, farmers will be able to further decide when to sell in the market and improve realization.
• Community farming assets: For improved productivity and optimization of inputs will result in substantial savings to farmers.
• Private sector investment in agriculture: Government will be able to direct priority sector lending in the currently unviable projects by supporting through interest subvention, incentive and credit guarantee. This will initiate the cycle of innovation and private sector investment in agriculture.
• Reduce national food wastage percentage: Due to improvements in post-harvest infrastructure, government will further be able to reduce national food wastage percentage thereby enable agriculture sector to become competitive with current global levels.
• Attracting investment in agriculture infrastructure: Central/State Government Agencies or local bodies will be able to structure viable PPP projects for attracting investment in agriculture infrastructure.
• Lower risk for lenders: With Credit Guarantee, incentive and interest subvention, lending institutions will be able to lend with a lower risk. This scheme will help to enlarge their customer base and diversification of portfolio.
• Refinance facility: It will enable larger role for cooperative banks and RRBs.

Establishing a carbon market

Introduction:

• In her Budget speech, the Finance Minister signalled that polluting industries, such as iron, steel, and aluminium, will have to conform to emission targets.
• “A road map for moving the ‘hard to abate’ industries from energy efficiency targets to emission targets will be formulated.
• Appropriate regulations for transition of these industries from the current ‘Perform, Achieve, and Trade’ (PAT) mode to the ‘Indian Carbon Market’ mode will be put in place,” she said.

PAT versus Emissions Trading:

• PAT: The Bureau of Energy Efficiency defines PAT as a “regulatory instrument to reduce specific energy consumption in energy-intensive industries, with an associated market based-mechanism to enhance the cost effectiveness through certification of excess energy saving which can be traded.
• PAT is about meeting energy efficiency standards, which means for producing a certain output, there is an attempt to use no more than a prescribed amount of energy.
• So, a firm that produces more steel than another can use more fuel, but can still be more energy efficient.
• There is no restriction on the absolute energy used.
• Meeting these standards generates credits or certificates for successful firms, which they can trade.
• Emissions Trading: Often known as cap and trade, is a market-based approach to controlling pollution by providing economic incentives for achieving reductions in the emissions of pollutants.
• Polluters are given emission caps.
• This is not based on relative standards such as energy-efficiency requirements, but on absolute standards, which are emission ceilings.

Indian case:

• In the last 15 years, India has been trying to decarbonise various sectors to meet its multiple development prerogatives, including poverty alleviation and providing its population access to affordable and reliable energy.
• CDM: India joined the Clean Development Mechanism (CDM), one of the Kyoto Protoco’s ‘flexibility mechanisms’ allowing industrialised countries to undertake climate mitigation projects in developing countries through which they could earn certified emission reduction units which could be traded and used by them to meet their emission reduction targets.
• By 2011, India became the largest supplier of Certified Emission Reduction Units in the world after China.
• PAT: In pursuance of its National Mission for Enhanced Energy Efficiency (one of the eight missions comprising the National Action Plan on Climate Change), India launched PAT in 2012.
• Iron and steel: India needs iron and steel for industrialisation, especially given the massive housing demand in urban centres with a rising population.
• Emissions from iron and steel production are big contributors to climate change.
• In the context of a Net Zero Emissions scenario by 2050, the International Energy Agency (IEA) says in a policy brief that the signs of the announced iron and steel projects meeting net zero emissions is very low.

Carbon market mode:

• Due diligence obligation: In the international legal system, substantive obligations on climate change mitigation can be described as due diligence obligations or obligations of conduct.
• This means that states are obligated to exercise their best possible efforts to mitigate climate change.
• An example of a due diligence obligation is the nationally determined contributions (NDCs), at the heart of the Paris Agreement 2015.
• NDCs: It is legitimate that India re-arranges or improves upon its existing PAT scheme or devises its version of carbon market mode within the boundaries of its NDCs.
• India’s NDC consists of eight targets, two of which relate to the energy sector.
• The first is to reduce emissions intensity of its GDP by 45% below the 2005 levels by 2030.
• The second is to achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy sources by 2030, subject to international finance and technology transfer.
• Since India does not have binding greenhouse gases reduction targets compared to a baseline year in pursuance of its NDCs, it is likely that it will have its own version of the carbon market, different from the European Union Emissions Trading System (ETS).
• India has not taken a formal stand on ETS and has refused mandatory emission cuts. At this stage, ETS will be in conflict with India’s development priorities.
• The 2021 draft blueprint presented by the Bureau of Energy Efficiency envisages two mechanisms:
• In the first phase, a voluntary market supported by a domestic project-based offset scheme (carbon offset mechanism); and
• In the second, a compliance market with mandatory participation for regulated entities (carbon credits trading mechanism).
• As per the IEA policy brief, “it will include updating emissions measurement methodologies to support the launch of a domestic carbon credits trading scheme from 2026, which will include the iron and steel sector, alongside other industry sectors such as petrochemicals, chemicals, and aluminium”.

Conclusion:

• India’s search for an appropriate policy tool towards establishing a carbon market of its choice shows that climate change debates cannot be built around equity alone; they also need to be located in the broader context of socioeconomic priorities.

Chandipura Virus (CHPV) Infection

Context:

• Further transmission of Chandipura virus possible in coming weeks, warns WHO

News:

• While the authorities are making efforts to control the transmission of CHPV, further transmission is possible in the coming weeks, considering the favourable conditions for vector populations during the monsoon season in affected areas, warned the WHO.

Acute Encephalitis Syndrome due to Chandipura Virus:

• Between early June and August 15, the Health Ministry reported 245 cases of acute encephalitis syndrome (AES), including 82 deaths (case fatality rate 33%).
• Of the total 245 AES cases reported, CHPV has been confirmed in 64 cases through immunoglobulin M enzyme-linked immunosorbent assay (IgM ELISA) or reverse transcription polymerase chain reaction (RT-PCR).
• Of the 64 confirmed cases, 61 cases have been reported from Gujarat and 3 from Rajasthan.

CHPV:

• It is endemic in India, with previous outbreaks occurring regularly. However, the current outbreak is the largest in the past 20 years.
• CHPV is a member of the Rhabdoviridae family and is known to cause sporadic cases and outbreaks of AES in western, central and southern parts of India, especially during the monsoon season.
• It is transmitted by vectors such as sandflies, mosquitoes and ticks.
• The case-fatality ratio from CHPV infection is high (56-75%), and there is no specific treatment or vaccine available.
• WHO recommends vector control, and protection against bites of sandflies, mosquitos, and ticks, to prevent further spread of CHPV.
• Phlebotomus papatasi (a sandfly) is reported to be the vector of CHPV disease in Gujarat.
• The disease affects mostly children under 15 years and can present with a febrile illness that may progress to convulsions, coma, and in some cases, death.
• CHPV has not been detected in other countries.

Dhaincha stems

Context:

• Villagers living in low-lying areas of Assam plant Dhaincha to use them as kindling during floods.

About Dhaincha (Sesbania aculeata):

• It is generally grown as a green manuring crop in India.
• It is a tall branching annual herb adapted to wet areas and heavy soils.
• This species has long been used for feeding livestock and for soil improvement in India.
• It can be used as fodder during the scarcity period.
• Sesbania species contain lectins.
• It can be grown on all season having sufficient moisture in soil.
• It gives best results when grow in sandy loam to loamy soils.
• It not only improves physical properties but also helps in meeting nitrogen requirement of succeeding crop.

Indo-Pacific Economic Framework (IPEF)

News:

• South Korea has embarked on its journey to become a “global pivotal state” and is committed to playing an active role in “establishing new norms” by participating in the Indo-Pacific Economic Framework (IPEF) and fostering cooperation with the Quad.

About IPEF:

• It was launched in 2022 at Tokyo, Japan.
• Member countries: It comprising of 14 countries – Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and USA.
• The 14 IPEF partners represent 40 percent of global GDP and 28 percent of global goods and services trade.
• Objective: It seeks to strengthen economic engagement and cooperation among partner countries with the goal of advancing growth, economic stability and prosperity in the region.
• The Framework also will provide tangible benefits that fuel economic activity and investment, promote sustainable and inclusive economic growth, and benefit workers and consumers across the region.
• Four pillars: The framework is structured around four pillars relating to
• Trade (Pillar I)
• Supply Chain Resilience (Pillar II)
• Clean Economy (Pillar III)
• Fair Economy (Pillar IV)
• India had joined Pillars II to IV of IPEF while it has maintained an observer status in Pillar-I.