Agriculture Infrastructure Fund (AIF)

Shri Narendra Modi, India’s Prime Minister, announced a new Rs. 1 lakh crore financing scheme under the Agriculture Infrastructure Fund (AIF).

The Agriculture Infrastructure Fund is a medium- to long-term debt financing institution that provides interest subvention and credit guarantees for projects involving post-harvest infrastructure and community farming assets. Agri-entrepreneurs, Farmer Producer Organizations (FPOs), and Primary Agricultural Credit Societies will all benefit from the programme (PACS).

Under the scheme, banks and financial institutions will issue loans worth Rs. 1 lakh crore with a 3% annual interest subsidy and credit guarantee coverage under the CGTMSE scheme for loans worth up to Rs. 2 crores. The Agriculture Infrastructure Fund (AIF) is the subject of this article.

Agriculture Infrastructure Fund (AIF)

Objectives of Agriculture Infrastructure Fund

The Agriculture Infrastructure Fund’s (AIF) main goal is to give financial assistance to agricultural entrepreneurs in order to strengthen the country’s agriculture infrastructure.

Beneficiaries Agriculture Infrastructure Fund (AIF)

Among those who will benefit from the Agriculture Infrastructure Fund (AIF) scheme are:

  • Farmers
  • A self-help group (SHG) is a group of people who come together to help each other.
  • Agri-entrepreneurs
  • Startups
  • Primary Agricultural Credit Society is a non-profit organisation that provides loans to farmers (PACS)
  • Cooperative Societies Marketing
  • Farmer Producer Organizations (FPO Joint Liability Groups) are a type of farmer producer organisation (JLG)
  • Cooperative Societies with Multiple Purposes
  • Public-Private Partnership Projects funded by a central/state agency or a local body

Benefits of Agriculture Infrastructure Fund

This finance facility will help all stakeholders in the agricultural ecosystem in a number of ways:

Benefits to Farmers FPOs, PACS & Marketing Cooperative Societies

  • Farmers’ overall revenue will increase as a result of the AIF.
  • Farmers will be able to sell directly to a bigger base of consumers as a result of improved marketing infrastructure, increasing their value realisation.
  • Farmers will be more self-sufficient and have better market access as a result of the AIF.
  • Farmers can determine when to sell in the market and increase their profit margins by adopting contemporary packaging and cold storage systems

Benefits to Agri entrepreneurs and startups

  • Entrepreneurs will strive for agriculture innovation by exploiting new-age technologies such as IoT (internet of things), AI (artificial intelligence), and others with a dedicated source of finance.
  • The AIF will increase opportunities for enterprises and farmers to collaborate.

Duration of the scheme

The Agriculture Infrastructure Fund scheme will be in place from the current fiscal year through the fiscal year 2029. (10 years).

Financial Assistance under Agriculture Infrastructure Fund (AIF)

Banks and financial institutions would give loans worth Rs. 1 lakh crore with a 3% annual interest subsidy and credit guarantee coverage under the CGTMSE plan for loans up to Rs. 2 crores.

Interest Subvention Cost

  • An interest subvention of 3% per annum would be applied to all AIF loans up to a limit of Rs. 2 crores.
  • This subsidy will only be accessible for a maximum of seven years. Interest subvention will be limited to Rs. 2 crores for loans exceeding that amount.
  • The loans would be disbursed over four years, with a sanction of Rs. 10,000 crore this fiscal year and Rs. 30,000 crore in each of the following three fiscal years.
  • The National Monitoring Committee may determine the amount and percentage of funds provided to private enterprises as a percentage of the total financing facility.

Credit Guarantee Cost

  • The Agriculture Infrastructure Fund (AIF) would provide credit guarantee coverage for qualifying borrowers under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme for loans up to Rs. 2 crores. The fee for AIF coverage will be paid by the government.

Moratorium for Repayment

The repayment moratorium under this AIF can be as short as six months and as long as two years.

Eligible Project

The plan will make it easier to set up and modernise essential components of the following projects:

  • Projects for Post-Harvest Management
  • Projects that are feasible for enhancing community farming assets
Sl.NoPost Harvest Management ProjectsViable projects for building community farming assets



1Supply chain services including e-marketing platformsOrganic inputs production
2WarehousesBiostimulant production units
3SilosInfrastructure for smart and precision agriculture.
4Pack housesProjects for establishing supply chain infrastructure for crop clusters, particularly export clusters, have been identified.
5Assaying unitsProjects for community farming assets or post-harvest management are promoted by the federal, state, or local governments or their agencies as part of a public-private partnership.
6Sorting  and grading units 
7Cold chains 
8Logistics facilities 
9Primary processing centres 
10Ripening Chambers 

Criteria for selection of Eligible Borrower

In conjunction with the National Bank for Agriculture and Rural Development and monitoring committees, lending institutions will determine the following criteria for selecting qualified borrowers:

All scheduled commercial banks, scheduled cooperative banks, Regional Rural Banks (RRBs), Small Finance Banks, Non-Banking Financial Companies (NBFCs), and the National Cooperative Development Corporation (NCDC) will provide this financing facility after signing a Memorandum of Understanding (MoU) with NABARD.

AIF specific focus

The government will place a special emphasis on SC/ST businesses and women entrepreneurs as part of this programme. SC/ST entrepreneurs shall receive 24 per cent of the total grant-in-aid under the scheme (16 per cent for SC and 8 per cent for ST). In addition, lending institutions will ensure that entrepreneurs from women and other marginalised groups are adequately covered. It must be ensured that the scheme’s benefits are universal and reach the intended recipients.

Management of AIF

An online Management Information System (MIS) platform will be used to manage and monitor the Agri Infra Fund. All qualified entities can apply for loans under the fund through this platform. The platform will offer advantages such as interest rate transparency across different banks, scheme details such as interest subvention and credit guarantee, little documentation, a faster approval procedure, and connectivity with other programme perks.

\Agriculture Infrastructure Fund (AIF)

Application Procedure for Agriculture Infrastructure Fund (AIF)

For this financing facility, qualifying firms must apply using the Management Information System (MIS) platform.

Banks and lending institutions will receive interest subsidies and credit guarantee support through the Public Financial Management System. Lending organisations must disburse payments to beneficiaries under this scheme using an Aadhaar-linked bank account.