Agriculture Infrastructure Fund (AIF)

Agriculture Infrastructure Fund (AIF)

The Agriculture Infrastructure Fund (AIF) is a transformative Central Sector Scheme launched in 2020 to revolutionize India’s agricultural infrastructure and post-harvest management capabilities. With a substantial allocation of ₹1 lakh crore over 13 years (2020-21 to 2032-33), the scheme aims to bridge critical gaps in farm-gate storage, logistics, and processing infrastructure.​

Scheme Overview and Objectives

The AIF represents a comprehensive medium to long-term debt financing facility designed to mobilize investments in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and credit guarantee support. The scheme’s primary objectives include:​

• Enhancing post-harvest management infrastructure to minimize crop losses and improve farmer incomes​

• Facilitating modern packaging and cold storage systems enabling farmers to sell produce on favorable terms​

• Increasing private investments in the agricultural sector through attractive financing options​

• Reducing national food wastage percentage through improved storage and processing facilities​

• Leveraging new-age technologies like IoT and AI for agricultural innovation​

• Connecting agri-entrepreneurs and startups with funding opportunities​

Eligible Beneficiaries

The scheme adopts an inclusive approach, welcoming diverse stakeholders in the agricultural ecosystem:

• Individual Farmers and Farmer Groups​

• Farmer Producer Organizations (FPOs)​

• Primary Agricultural Credit Societies (PACS)​

• Marketing Cooperative Societies​

• Self Help Groups (SHGs) and Joint Liability Groups (JLGs)​

• Multipurpose Cooperative Societies​

• Agri-entrepreneurs and Startups​

• National and State Federations of Cooperatives​

• Central/State agency or Local Body sponsored Public-Private Partnership Projects​

Exclusions: Public Sector Undertakings (PSUs) are not directly eligible, though PPP projects sponsored by them qualify for support.​

Financial Framework and Benefits

Loan Structure

• Aggregate Loan Facility: ₹1 lakh crore from various lending institutions​

• Interest Rate Cap: Maximum 9% per annum on loans​

• Loan Quantum: Up to ₹2 crore covered under guarantee and subvention; higher amounts considered but without scheme benefits​

• Repayment Period: 7 years with flexible repayment based on project cash flow​

• Moratorium: 6 months to 2 years (interest payable during moratorium)​

Key Financial Incentives

Interest Subvention: All loans receive 3% per annum interest subvention up to ₹2 crore limit for maximum 7 years. For loans exceeding ₹2 crore, subvention applies only to the first ₹2 crore.​

Credit Guarantee Coverage: Comprehensive coverage under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for loans up to ₹2 crore, with government bearing the guarantee fee.​

Enhanced Coverage (2024 Expansion): NABSanrakshan Trustee Company Pvt. Ltd. now provides additional credit guarantee coverage for FPOs, expanding financial security options.​

Eligible Projects and Infrastructure

Post-Harvest Management Infrastructure

• Storage Facilities: Warehouses, silos, cold stores, and cold chain facilities​

• Processing Units: Primary processing centers, grading, sorting, and cleaning facilities​

• Packaging and Value Addition: Packing units, ripening chambers, waxing plants​

• Logistics Infrastructure: Reefer vans, insulated vehicles, supply chain services​

Community Farming Assets

• Advanced Farming Systems: Hydroponic farming, mushroom cultivation, vertical farming, aeroponic farming​

• Protected Cultivation: Polyhouse/greenhouse infrastructure​

• Smart Agriculture: Infrastructure for precision agriculture and IoT-enabled farming​

• Custom Hiring Centers: Shared mechanization facilities​

Specialized Infrastructure

• Organic Input Production Units: Bio-stimulant production, nurseries, tissue culture facilities​

• Quality Infrastructure: Assaying units, testing laboratories​

• Marketing Platforms: E-marketing platforms, private mandis​

Recent Expansions and Enhancements (2024)

The Union Cabinet approved significant expansions to the AIF scheme in August 2024, making it more comprehensive and inclusive:​

Viable Farming Assets Expansion

All eligible beneficiaries can now create infrastructure for viable community farming assets, enhancing collective farming capabilities and sustainability.​

Integrated Processing Projects

The scheme now includes integrated primary and secondary processing projects, though standalone secondary projects remain under Ministry of Food Processing Industries schemes.​

PM-KUSUM Convergence

Component-A of PM-KUSUM scheme can now converge with AIF for farmers, FPOs, cooperatives, and panchayats, promoting sustainable clean energy solutions alongside agricultural infrastructure.​

Enhanced Credit Guarantee

NABSanrakshan Trustee Company Pvt. Ltd. provides additional credit guarantee coverage for FPOs beyond existing CGTMSE coverage, strengthening financial security.​

Implementation Mechanism

Participating Financial Institutions

The scheme operates through a robust network of lending institutions including:

• 24 Scheduled Commercial Banks​

• 40 Scheduled Cooperative Banks​

• Regional Rural Banks (RRBs)​

• Small Finance Banks and NBFCs​

• National Cooperative Development Corporation (NCDC)​

• NABARD with special provisions for PACS​

Monitoring and Evaluation Framework

The government employs a comprehensive multi-tiered monitoring mechanism to ensure effective implementation and impact assessment:​

Technology-Enabled Monitoring

• AIF Online MIS Portal: Real-time project tracking from sanction to implementation​

• Geo-tagging: Physical progress monitoring and regional distribution assessment​

• AI and Data Analytics: Impact analysis on yield improvements and post-harvest loss reduction​

Third-Party Assessment

• Independent Field Evaluations: Agro-Economic Research Centre (AERC) Pune conducted comprehensive impact studies​

• Stakeholder Consultations: Regular feedback mechanisms with banks and state governments​

• District and State-Level Committees: Localized monitoring and alignment with regional needs​

Performance and Impact Assessment

Infrastructure Creation

Since its launch, AIF has demonstrated remarkable success in infrastructure development:

• 6,623 Warehouses constructed nationwide​

• 688 Cold Storage Units established​

• 21 Silos Projects completed​

• Additional Storage Capacity: Approximately 500 LMT (465 LMT dry storage + 35 LMT cold storage)​

Financial Performance

• ₹47,575 Crore Sanctioned for 74,508 projects as of August 2024​

• ₹78,596 Crore Total Investment Mobilized in agriculture sector​

• ₹78,433 Crore Private Investment attracted through the scheme​

Socio-Economic Impact

• 8.19+ Lakh Rural Employment Opportunities generated in agriculture sector​

• 18.6 LMT Food Grains can be saved annually through improved storage​

• 3.44 LMT Horticulture Produce preservation capacity added​

State-wise Allocation Examples

The scheme provides tentative state-wise allocations based on agricultural output ratios:

• Maharashtra: ₹8,460 crore allocation​

• North-Eastern States: ₹3,516 crore total allocation, with Assam receiving ₹2,050 crore​

Convergence and Integration

The AIF scheme demonstrates strong convergence with multiple government initiatives:

• State and Central Government Schemes: Integration with AMI, ACABC, PMEGP, NHB, MIDH programs​

• PM-KUSUM Scheme: Component-A convergence for clean energy solutions​

• CGTMSE Integration: Credit guarantee support for micro and small enterprises​

• NABSanrakshan Convergence: Enhanced FPO support mechanisms​

Project Limitations and Eligibility Criteria

Project Scale

• Maximum Projects per Entity: Up to 25 projects at different locations​

• Minimum Promoter Contribution: 10% of project cost mandatory​

• Loan Coverage: Full scheme benefits available only up to ₹2 crore​

Non-Eligible Activities

• Standalone Secondary Processing: Covered under MoFPI schemes​

• Government Sector: Direct PSU participation excluded​

• Residential or Commercial Infrastructure: Outside agricultural scope​

The Agriculture Infrastructure Fund represents a landmark initiative in India’s agricultural transformation journey, providing comprehensive support for infrastructure development while ensuring financial accessibility and technical viability. Through its expanded scope and enhanced features, the scheme continues to strengthen India’s agricultural infrastructure ecosystem, supporting the government’s vision of doubling farmer incomes and achieving sustainable agricultural growth.

Government Schemes

Source: PIB