Why in the news
This explainer revisits the Agriculture Infrastructure Fund (AIF), a long-term debt financing facility for farm-gate and post-harvest infrastructure, and what it has achieved so far.
Key facts
- Started: 2020; runs for 10 years (2020-2030).
- Corpus: ₹1,00,000 crore; a Central Sector Scheme.
- Implementing ministry: Ministry of Agriculture and Farmers Welfare.
- Purpose: medium to long-term loans for post-harvest management, storage, processing and market linkage facilities.
Financial terms
| Item | Detail |
|---|
| Interest subvention | 3% a year on loans up to ₹2 crore |
| Credit guarantee | CGTMSE cover for loans up to ₹2 crore |
| Repayment | Up to 7 years including moratorium |
| Moratorium | Up to 2 years |
| Loan size | No fixed limit; above ₹2 crore the subvention stays capped at ₹2 crore and the extra amount carries market rates |
Who can borrow
| Group | Examples |
|---|
| Individuals | Small and marginal farmers, agri-entrepreneurs |
| FPOs and SHGs | Registered FPOs in post-harvest work; women SHGs and rural cooperative groups |
| Cooperatives | PACS and agri-cooperatives |
| Startups | Agri-processing, cold storage and logistics firms |
| State agencies and PSUs | Bodies building agri-infrastructure, including PPP projects |
Eligible projects
- Farm-gate: primary processing, packhouses, ripening chambers, cold storage.
- Storage: silos, warehouses, godowns, cold chains and refrigerated transport.
- Processing and value addition: milling, dairy, meat and fisheries units, agri-logistics hubs.
- Market links: e-NAM-compatible infrastructure, market yards, rural haats.
- Smart agriculture: precision farming, IoT and AI monitoring, post-harvest agri-tech.
- Renewable energy: solar-powered cold storage and biogas plants.
Objectives
- Cut crop wastage through post-harvest infrastructure and stronger supply chains.
- Raise farmers’ income, promote private investment and improve food security.
- Back FPOs in setting up community infrastructure, moving agriculture from a production focus to a market-driven model.
How to apply
- Register on the AIF portal as an individual, FPO, SHG or cooperative, enter project details and submit to the bank.
- The bank checks eligibility, sanctions and disburses the loan; the bank and government agencies monitor the project.
- An AIF dashboard tracks applications and approvals in real time.
Impact, 2020-2024
- Over ₹40,000 crore in loans sanctioned.
- Over 1000 rural cooperatives (PACS and FPOs) upgraded, more processing units and wider cold-chain and agri-logistics investment.
Challenges
- Low awareness among small farmers.
- Slow loan approvals due to bank processing.
- Land acquisition trouble for large projects.
- Limited private participation because of regulatory hurdles; weak monitoring of fund use.
Exam angle
- Corpus ₹1 lakh crore; subvention 3% up to ₹2 crore.
- Guarantee agency: CGTMSE.
- Tenure 2020-2030; moratorium up to 2 years.