Agriculture Infrastructure Fund (AIF)
Purpose:
The core aim of AIF is to bridge the gaps in agricultural infrastructure. That means we are not just talking about increasing production, but also about post-harvest infrastructure and community farming assets — the kind of support needed after crops are grown.
Scheme Type and Tenure
- It is a Central Sector Scheme, which means it is 100% funded by the Central Government.
- Implemented by: NABARD (National Bank for Agriculture and Rural Development).
- Tenure: Upto 2032–33, giving it a long-term perspective.
Objective in Simple Words:
The goal is to mobilize medium to long-term debt financing — i.e., provide loans — for projects that are economically viable and help improve agricultural infrastructure like warehouses, cold storages, grading units, etc.
Background and Launch Context
- AIF was launched under the broader umbrella of Atmanirbhar Bharat Abhiyan (Self-Reliant India Campaign).
- Officially launched in May 2020 to respond to the challenges exposed by the COVID-19 pandemic in agricultural logistics and supply chains.
Who are the Beneficiaries?
Think of this as a diverse group of stakeholders in Indian agriculture:
Beneficiaries:
👨🌾 Farmers
🏦 Primary Agricultural Credit Societies (PACS)
👥 Farmer Producer Organisations (FPOs)
🏛️ State Agencies / Agricultural Produce Market Committees (APMCs)
🤝 Self Help Groups (SHGs)
Key Features and Provisions
A. Financial Assistance:
- Provision of ₹1 Lakh Crore as loan support by banks and financial institutions.
- Loans come with interest subvention of 3% per annum — reducing the cost of borrowing.
- Credit Guarantee via CGTMSE for loans up to ₹2 Crores, especially helpful for small borrowers.
- CGTMSE: Credit Guarantee Fund Trust for Micro and Small Enterprises. It is a government initiative jointly set up by the Ministry of Micro, Small & Medium Enterprises (MSME), Government of India, and the Small Industries Development Bank of India (SIDBI) to facilitate institutional credit flow to Micro & Small Enterprises (MSEs)
B. Eligible Projects:
Projects must focus on community-level assets, particularly:
- Supply chain infrastructure for crop clusters (e.g., cold chains for fruits, vegetables).
- Projects under PPP (Public-Private Partnerships), promoted by Central/State/Local Governments.
- Support for organic input production, bio-stimulant units, and smart & precision agriculture infrastructure.
C. Management and Monitoring:
- A dedicated MIS (Management Information System) platform is used.
- There are Monitoring Committees at National, State, and District levels for transparency and feedback.
D. BHARAT Campaign (Key Highlight):
BHARAT = Banks Heralding Accelerated Rural & Agriculture Transformation
This initiative was launched to:
- Maximize benefits to end users (farmers, FPOs, etc.).
- Create competition among banks to encourage faster loan disbursal for infrastructure projects.
AIF Scheme Expansion:
The scope of the scheme has been enhanced (August 2024) with the following new components:
| Expansion Area | Description |
| Enhanced Credit Guarantee | Extends credit coverage for financial safety of FPOs |
| Viable Farming Assets | Promotes sustainable farming productivity |
| PM-KUSUM Integration | Supports clean energy solutions in agriculture |
| Integrated Processing Projects | Encourages infrastructure for both primary and secondary processing |
Conclusion:
The Agriculture Infrastructure Fund (AIF) is not just a loan scheme — it’s a strategic intervention to build the backbone of Indian agriculture. It focuses on strengthening the value chain from farm to market. This aligns with the vision of making Indian agriculture self-reliant, profitable, and sustainable.