Context: Ministry of Agriculture & Farmers' Welfare has launched AgriSURE Scheme which is a Rs 750 crore blended capital fund to finance startups and rural enterprises.
About AgriSURE Scheme
- AgriSURE stands for 'Agri Fund for Start-ups and Rural Enterprises'. This Fund aims to support innovative, technology driven, high-risk, high impact activities in agriculture and allied sectors.
- AgriSURE aims to support start-ups and agripreneurs through investments in sector-specific, sector-agnostic, debt AIFs as well as direct equity support to start-ups working in agriculture and rural development sectors.
- Registered as a Category-II Alternative Investment Fund with SEBI.
- Components of AgriSURE Fund: There are two components of AgriSURE fund:
- AgriSURE - Fund of Fund Scheme (Rs 450 crore):
- This component is designed to provide funding to Category I and Category II Alternative Investment Funds (AIFs) that make onward investments in Start-ups in preferred sectors of the fund.
- Eligible AIFs should be incorporated in India and can be investing in equity related instruments and/or debt securities.
- The scheme will require sector agnostic funds to invest into the desired number of units and/or amount into preferred sectors of scheme.
- The scheme can invest up to a maximum of 5% of the corpus of the AIF or Rs 25 crore in one AIF, whichever is lower.
- AgriSURE - Direct Scheme (Rs 300 crore):
- This component is designed to make direct equity investments in early-stage start-ups focused on agriculture and rural development in India. These early-stage start-ups should be recognised by the Department for Promotion of Industry & Internal Trade (DPIIT) and should be incorporated in India.
- The scheme can invest a maximum of Rs 25 crores in a single start-up, subject to AIF regulations.
- The scheme will invest in equity, compulsorily convertible preference shares or other equity related instruments.
- The scheme may reinvest in successful portfolio companies during subsequent funding rounds to
- AgriSURE - Fund of Fund Scheme (Rs 450 crore):
- Total Corpus: Rs 750 crores. The total corpus of Rs 750 crores has contributed by the following:
- Rs 250 crores to be contributed by Union Ministry of Agriculture & Farmers' Welfare.
- Rs 250 crores to be contributed by NABARD.
- Rs. 250 crores to be mobilized from banks, insurance companies and private investors.
- Duration: The fund’s duration is 10 years from the date of inception which can be extended by two years.
- Investment Manager: NABVENTURES Ltd. (a wholly owned subsidiary of NABARD) will act as the fund manager for AgriSURE fund.
- Target beneficiaries:
- Start-ups working in agriculture & rural development sectors like Agritech, Food Processing, Animal husbandry, Fisheries, Supply Chain Management, Farm Mechanization, Biotechnology, Waste Management, Renewable energy, Agri value chain including Primary Cooperative Societies development, Support for FPOs, Technology support at Farm level and Climate change etc.
- The fund aims to support about 85 start-ups in the target areas by the end of its life.
Benefits of AgriSURE fund
- Encourage young entrepreneurs with innovative, technology-driven ideas and willingness to take high-risk, while engaging in high-impact activities in agriculture and Agri-tech.
- Boost to opportunities available for efficient and more profitable forward and backward linkage systems in the rural space that help make the farm produce value chain system stronger, robust and more systematic by encouraging start-ups operating in these activities and bring in new entrepreneurs into this field of agri-business.
- Attract more investment in agri and rural start-up ecosystem by making contribution to various Alternative Investment Funds.
- Create an investment-friendly climate and accelerate growth of start-ups related to agriculture and allied activities and increase their investment absorption capacities.
- Increase and sustain capital commitments to sector specific AIFs in order to enable them to provide equity support to Agri & Agri-tech start-ups engaged in serving farmers and FPOs/FPCs/Primary Cooperative Societies.
- Increase average size and number of investments by Alternative Investment Funds in Agri & Agri-tech start-ups.
- Provide liquidity to existing Agri & Agri-tech start-ups that are unable to upscale their business due to dearth of access to various kinds of financing like equity, debt instruments, etc.
- Enlist more players in the farm related ecosystem for enabling FPOs/FPCs/ Primary Cooperative Societies to access latest automated farm processes and machinery through Agri tech Start-ups.
- Create additional employment opportunities for the technically qualified rural and urban youth to look up to agriculture as a business opportunity.
- Retain existing rural youth in agriculture and encourage the younger generation to take to agriculture by providing newer technologies, techniques and equipments at their doorsteps from time to time.
- Encouraging the urban youth to establish new Start-ups in the rural agricultural ecosystem to have a win-win situation for both young farmers and the urban entrepreneurs by working in their respective domains to benefit each other.