The Agriculture Infrastructure Fund (AIF) is a Central Sector Scheme launched by the Government of India in July 2020. It is designed to provide medium- to long-term debt financing for the creation of post-harvest management infrastructure and community farming assets.
What is the Agriculture Infrastructure Fund (AIF)?
The scheme aims to empower farmers, Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), Joint Liability Groups (JLGs), agri-entrepreneurs, and startups by facilitating financial support for building critical agricultural infrastructure across India.
The AIF is active until FY 2032-33 and has an allocated funding of ₹1 lakh crore, with special provisions for interest subvention and credit guarantee support. Through this initiative, the government seeks to reduce post-harvest losses, improve farmers’ incomes, enhance market access, and stimulate private investment in agriculture.
Why was the Agriculture Infrastructure Fund launched?
Agriculture in India is often challenged by high post-harvest losses, fragmented supply chains, and inadequate infrastructure. The AIF was launched to address these issues and support sustainable growth in the agricultural sector. The main reasons for its introduction are:
- Reduce Post-Harvest Losses: About 30% of crops are lost due to poor storage and transport. AIF funds cold storage, warehouses, and processing units.
- Increase Farmer Income: Better storage and market access help farmers get higher prices for their produce.
- Support Community Assets: The scheme helps set up shared machinery, processing centers, and smart irrigation for small farmers.
- Encourage Private Investment: Interest subsidies and credit guarantees attract startups and entrepreneurs to invest in farm infrastructure.
- Improve Market Access: Better infrastructure connects local, national, and global markets, supporting exports.
Who can Benefit from the Agriculture Infrastructure Fund?
AIF has a broad range of eligible beneficiaries, ensuring inclusion across farmer groups, cooperatives, and agri-entrepreneurs. The key beneficiaries include:
- Farmers (individuals owning agricultural land)
- Farmer Producer Organizations (FPOs)
- Self Help Groups (SHGs)
- Joint Liability Groups (JLGs)
- Primary Agricultural Credit Societies (PACS)
- Marketing Cooperative Societies
- Multipurpose Cooperative Societies
- Agri-entrepreneurs and startups
- Public-private partnership projects sponsored by central, state, or local bodies
Exclusions: Public Sector Undertakings (PSUs) are not directly eligible but can participate through PPP projects.
Lending institutions providing AIF include:
- Scheduled commercial banks
- Scheduled cooperative banks
- Regional Rural Banks (RRBs)
- Small Finance Banks
- Non-Banking Financial Companies (NBFCs)
- National Cooperative Development Corporation (NCDC)
Additionally, NABARD provides need-based refinance support to eligible lending entities to facilitate smooth fund disbursal.
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What Projects are Eligible Under AIF?
The AIF finances a wide range of agricultural infrastructure projects. Some key eligible activities are:
- Warehouses, Silos, and Cold Storage
- Primary Processing Centers and Packaging Units
- Custom Hiring Centers for Machinery
- Smart and Precision Agriculture Infrastructure
- Logistics and Transportation Facilities
- Market Infrastructure and E-NAM Platforms
The scheme allows a maximum of 25 projects per private entity, with each project eligible for loans up to ₹2 crore. For cooperatives, FPOs, SHGs, and state agencies, there is no such limit, encouraging wider participation.
What are the Financial Benefits of the AIF?
AIF provides a variety of financial incentives to support agriculture infrastructure development:
| Feature | Details |
| Interest Subvention | 3% interest subsidy per annum on loans up to ₹2 crore for a maximum of 7 years. NABARD loans for PACS may be available at a reduced rate of 1% post-subvention. |
| Credit Guarantee | Eligible borrowers get coverage under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). FPOs may avail coverage under the FPO Promotion Scheme by DACFW. The government pays the fee for this coverage. |
| Borrower Contribution | Borrowers must contribute at least 10% of the total project cost. |
| Moratorium | Repayment moratorium of 6 months to 2 years, depending on project viability. |
| Inclusivity Support | 24% of grants-in-aid reserved for SC/ST entrepreneurs (16% SC, 8% ST). Loans for women and other weaker sections are prioritized. |
How is the Agriculture Infrastructure Fund Managed?
The scheme is monitored through an online Management Information System (MIS). This platform:
- Enables real-time loan application and processing.
- Tracks fund utilization and project progress.
- Allows monitoring by National, State, and District-level committees to ensure transparency and accountability.
Additionally, the scheme can be converged with other central and state schemes, such as crop insurance, micro-irrigation funds, and rural development programs, for maximum impact.
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What are the Key Objectives of the Agriculture Infrastructure Fund?
The objectives of AIF are multifaceted and aimed at holistic development of agricultural infrastructure.
| Objective | Purpose | Example Projects |
| Create post-harvest infrastructure | Reduce losses and improve value chains | Cold storage, warehouses, processing units |
| Improve competitiveness | Modernize infrastructure for efficiency | Irrigation, market linkages, transportation |
| Develop community farming assets | Support shared resources and farm markets | Agricultural markets, e-NAM portals |
| Encourage private investment | Promote private participation with incentives | Loans, grants, tax incentives |
| Promote agriculture exports | Support export-oriented infrastructure | Packing houses, export processing units |
| Promote innovation and technology | Improve efficiency and modernization | Drones, smart irrigation, precision agriculture technologies |
Why is AIF important for India’s agriculture?
The Agriculture Infrastructure Fund (AIF) offers significant benefits to farmers, FPOs, and agri-entrepreneurs by improving storage, processing, and market access. The scheme also promotes technology adoption, private investment, and inclusive growth, which together strengthen India’s agricultural sector and overall economy.
- Reduction in Post-Harvest Losses
- Enhanced Market Access
- Increased Farmer Income
- Private Sector Participation
- Inclusive Growth
- Technological Advancement
- National Economic Growth
What Challenges does AIF Address in Post-Harvest Management?
The Agriculture Infrastructure Fund (AIF) not only provides financial support for building farm infrastructure but also helps tackle several key challenges faced by Indian farmers. By focusing on better storage, processing, and technology adoption, the scheme ensures smoother supply chains, reduces losses, and promotes sustainable farming practices.
- Lack of Credit Access
- Stubble Burning
- Infrastructure Bottlenecks
- Connectivity Issues
- Technology Integration
How has AIF Performed Since its Launch?
The performance of the AIF fund is as follows:
- Fund mobilization: In just 2.5 years, AIF mobilized over ₹30,000 crores for agriculture infrastructure projects.
- Project financing: More than 15,000 crores were sanctioned in the first phase, followed by progressive disbursement.
- Impact: Benefited thousands of farmers, FPOs, and entrepreneurs, reducing post-harvest losses and increasing market efficiency.
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What is the Role of NABARD and Other Lending Institutions?
NABARD plays an important role in the Agriculture Infrastructure Fund by providing refinancing support to eligible banks, Regional Rural Banks (RRBs), and cooperative banks. This support ensures that lending institutions have the necessary resources to provide loans to farmers, Farmer Producer Organizations (FPOs), and agri-entrepreneurs.
Alongside NABARD, commercial banks, cooperative banks, and Non-Banking Financial Companies (NBFCs) actively participate in disbursing loans under the scheme. The Government of India further facilitates the process by maintaining user-friendly online portals, which allow applicants to access funds quickly and efficiently, ensuring smooth implementation of agriculture infrastructure projects across the country.
What are the Advantages of AIF for Farmers and Entrepreneurs?
The advantages of the Agriculture Infrastructure Fund are as follows:
For Farmers and FPOs:
- Improved storage and processing infrastructure
- Access to modern machinery through custom hiring centers
- Better market integration and higher income
For Agri-Entrepreneurs and Startups:
- Opportunities to introduce innovative solutions (AI, IoT, drones)
- Financial support for creating new-age agricultural infrastructure
- Collaboration with farmers and FPOs for technology adoption
Financial Benefits:
- 3% interest subvention for loans up to ₹2 crore
- Credit guarantee under CGTMSE and FPO promotion scheme
- Moratorium of 6 months to 2 years
- Inclusive support for SC/ST, women, and weaker sections
The Agriculture Infrastructure Fund is a transformative initiative for India’s agricultural sector. By addressing post-harvest losses, improving infrastructure, and encouraging private investment, the scheme enhances farmers’ incomes, promotes entrepreneurship, and strengthens the overall economy. Its inclusive and technologically driven approach ensures sustainable growth for both rural communities and the national agriculture sector. For aspirants preparing for government exams, understanding AIF is crucial for UPSC GS Papers, particularly in the context of agricultural policies, rural development, and economic growth.
Key Takeaway
| Aspect | Details |
| Launch Year | 2020 |
| Fund Size | ₹1 lakh crore |
| Duration | FY 2020 – FY 2032-33 |
| Loan Limit | Up to ₹2 crore per project |
| Interest Subvention | 3% per annum for 7 years |
| Eligible Beneficiaries | Farmers, FPOs, SHGs, JLGs, PACS, cooperatives, agri-entrepreneurs, startups |
| Credit Guarantee | Available under CGTMSE and FPO Promotion Scheme |
| Moratorium | 6 months to 2 years |
| Focus Areas | Post-harvest management, storage, processing, community farming assets, logistics, smart agriculture |
| Key Objective | Reduce post-harvest losses, improve market access, enhance farmer income, promote investment and technology |
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Questions Based on the Agriculture Infrastructure Fund (AIF)
Which of the following is an example of community farming asset under AIF?
(a) Private cold storage
(b) Individual tractor
(c) Custom hiring center for machinery
(d) Personal farm house
(e) Factory equipment
Answer: (c)
Which of the following is the primary aim of the Agriculture Infrastructure Fund?
(a) Promote chemical fertilizers
(b) Create post-harvest infrastructure and community assets
(c) Subsidize pesticides
(d) Promote livestock only
(e) None of the above
Answer: (b)
What is the maximum loan limit under AIF per project?
(a) ₹50 lakh
(b) ₹1 crore
(c) ₹2 crore
(d) ₹5 crore
(e) ₹10 crore
Answer: (c)
Who manages the Agriculture Infrastructure Fund online platform?
(a) Ministry of Finance
(b) NABARD
(c) MIS under AIF
(d) RBI
(e) NITI Aayog
Answer: (c)
Which of the following entities are eligible under AIF?
(a) Public Sector Undertakings
(b) FPOs
(c) Private households only
(d) Industrial factories
(e) Banks only
Answer: (b)
What is the duration of interest subvention under AIF?
(a) 2 years
(b) 5 years
(c) 7 years
(d) 10 years
(e) 3 years
Answer: (c)
Under AIF, what is the minimum contribution required from the borrower?
(a) 5%
(b) 10%
(c) 15%
(d) 20%
(e) None
Answer: (b)
Which government scheme provides credit guarantee for AIF loans?
(a) PMFBY
(b) CGTMSE
(c) PM-KISAN
(d) MGNREGA
(e) NREGA
Answer: (b)
Which sector is directly targeted by the AIF?
(a) Manufacturing
(b) IT
(c) Agriculture and allied sectors
(d) Transport
(e) Banking
Answer: (c)
How long is the moratorium period allowed under AIF loans?
(a) 3-6 months
(b) 6 months – 2 years
(c) 2-5 years
(d) 5-7 years
(e) 1-3 years
Answer: (b)
FAQs
Ans: Eligible participants for the Agriculture Infrastructure Fund include a wide range of beneficiaries such as agri-entrepreneurs, farmers, Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Start-ups, state agencies, and state-sponsored Public-Private partnerships.
Ans: The financing facility covers various stages of Agriculture Infrastructure Projects including farm-gate and aggregation points. It supports projects focusing on post-harvest management infrastructure and community farming assets, such as supply chain services, warehouse facilities, cold chain infrastructure, primary processing centers, and more.
Ans: The scheme aims to enhance marketing infrastructure, reduce post-harvest losses, improve storage facilities, promote savings through community farming assets, facilitate PPP projects, reduce food wastage, and lower risk lending for financial institutions, among other benefits.
Ans: The Agriculture Infrastructure Fund scheme is operational from 2020-21 to 2032-33. Loan disbursement under the scheme is scheduled to be completed within six years, by the end of the Financial Year 2025-26.
Ans: The application process involves beneficiary registration, submission of a Detailed Project Report (DPR), review and appraisal by the Ministry of Agriculture & Farmers Welfare, and loan sanction by the selected bank. The application process is facilitated through an online portal.
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