🌾 AIF
Agriculture Infrastructure Fund - ₹1 lakh crore financing facility for farm-gate infrastructure
What is AIF?
The Agriculture Infrastructure Fund (AIF) is a Central Sector Scheme launched in 2020 by the Department of Agriculture, Cooperation and Farmers' Welfare (DAC&FW). It provides medium to long-term debt financing for investment in viable projects related to post-harvest management infrastructure and community farming assets.
The scheme was announced on 15th May 2020 with a corpus of ₹1 lakh crore to be disbursed over multiple years, with the scheme duration extended to FY 2032 (10 years).
| Parameter | Details |
|---|---|
| Launch Date | 15th May 2020 |
| Total Corpus | ₹1 lakh crore |
| Scheme Duration | FY 2020 to FY 2032 (originally 10 years, extended) |
| Ministry | DAC&FW (Agriculture Ministry) |
| Scheme Type | Central Sector Scheme (100% Central funding) |
Objective
The AIF aims to fund Agri Infrastructure Projects at farm-gate and aggregation points to reduce post-harvest losses, add value to agricultural produce, and strengthen the agricultural supply chain. This includes storage facilities, cold chains, processing units, and community farming assets.
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What is AIF?
The Agriculture Infrastructure Fund (AIF) is a Central Sector Scheme launched in 2020 by the Department of Agriculture, Cooperation and Farmers' Welfare (DAC&FW). It provides medium to long-term debt financing for investment in viable projects related to post-harvest management infrastructure and community farming assets.
The scheme was announced on 15th May 2020 with a corpus of ₹1 lakh crore to be disbursed over multiple years, with the scheme duration extended to FY 2032 (10 years).
| Parameter | Details |
|---|---|
| Launch Date | 15th May 2020 |
| Total Corpus | ₹1 lakh crore |
| Scheme Duration | FY 2020 to FY 2032 (originally 10 years, extended) |
| Ministry | DAC&FW (Agriculture Ministry) |
| Scheme Type | Central Sector Scheme (100% Central funding) |
Objective
The AIF aims to fund Agri Infrastructure Projects at farm-gate and aggregation points to reduce post-harvest losses, add value to agricultural produce, and strengthen the agricultural supply chain. This includes storage facilities, cold chains, processing units, and community farming assets.
Eligible Beneficiaries
A wide range of agricultural stakeholders can avail loans under AIF:
| Category | Eligible Entities |
|---|---|
| Cooperatives | Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Multipurpose Cooperative Societies |
| Producer Organizations | Farmer Producer Organizations (FPOs), Federations of FPOs |
| Groups | Self Help Groups (SHGs), Joint Liability Groups (JLGs), Federations of SHGs |
| Individuals | Individual Farmers, Agri-entrepreneurs, Start-ups |
| PPP Projects | Central/State agency or Local Body sponsored Public-Private Partnership Projects |
Exclusion: Public Sector Undertakings (PSUs) are NOT directly eligible. However, projects sponsored by PSUs under PPP mode are eligible.
Loan Terms
| Parameter | Details |
|---|---|
| Loan Amount | Need-based (no minimum or maximum ceiling) |
| Borrower Contribution | Minimum 10% of total project cost (mandatory) |
| Decision Timeline | Loan sanction within 60 days of application |
| Interest Rate | MCLR + 1% (Maximum 9% for loans up to ₹2 crore) |
| Moratorium Period | Minimum 6 months, Maximum 2 years |
Interest Subvention
One of the key attractions of AIF is the interest subvention (subsidy on interest):
| Loan Amount | Subvention Rate | Duration |
|---|---|---|
| Up to ₹2 crore | 3% per annum | Maximum 7 years |
| Above ₹2 crore | Subvention limited to the first ₹2 crore portion only | Maximum 7 years |
Example: If you take a loan of ₹1 crore at 9% interest, the government pays 3% as subvention, so your effective interest rate becomes 6% for up to 7 years.
Multiple Projects Provision
AIF allows beneficiaries to set up multiple projects:
| Category | Projects Allowed |
|---|---|
| Private Entities (Farmers, Agri-entrepreneurs, Start-ups) | Up to 25 projects in different locations; each eligible for loan up to ₹2 crore |
| Cooperatives, FPOs, SHGs, State Agencies | No limit on number of projects |
| Multiple projects in one location | Allowed, with overall cap of ₹2 crore per location |
Credit Guarantee
To reduce risk for lenders, the government provides credit guarantee coverage:
| Parameter | Details |
|---|---|
| Scheme | CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) |
| Coverage | Available for loans up to ₹2 crore |
| Guarantee Fee | Paid by the Government (not the borrower) |
| For FPOs | Credit guarantee available under the FPO Promotion Scheme of DACFW |
Lending Institutions
The following institutions can provide financing under AIF:
- Scheduled Commercial Banks
- Scheduled Cooperative Banks
- Regional Rural Banks (RRBs)
- Small Finance Banks
- Non-Banking Financial Companies (NBFCs)
- National Cooperative Development Corporation (NCDC)
NABARD Support: Need-based refinance support is available from NABARD to all eligible lending entities, including cooperative banks and RRBs.
Social Inclusion
AIF has specific provisions to ensure inclusive growth:
| Category | Allocation |
|---|---|
| SC Entrepreneurs | 16% of total grants-in-aid |
| ST Entrepreneurs | 8% of total grants-in-aid |
| Total SC/ST | 24% reserved |
| Women & Weaker Sections | Priority in loan allocation |
Disbursement Schedule
The ₹1 lakh crore corpus was planned to be disbursed as:
| Year | Disbursement Amount |
|---|---|
| 1st Year (2020-21) | ₹10,000 crore |
| 2nd to 4th Year | ₹30,000 crore each year |
Summary Cheat Sheet
| Parameter | Details |
|---|---|
| Full Name | Agriculture Infrastructure Fund |
| Launch Date | 15th May 2020 |
| Total Corpus | ₹1 lakh crore |
| Scheme Type | Central Sector Scheme (100% Central) |
| Ministry | DAC&FW (Agriculture Ministry) |
| Scheme Duration | FY 2020 to FY 2032 |
| Interest Subvention | 3% p.a. on loans up to ₹2 crore, max 7 years |
| Effective Rate | ~6% (if base rate 9%) |
| Credit Guarantee | CGTMSE (up to ₹2 crore, fee paid by Govt) |
| Moratorium | 6 months to 2 years |
| Borrower Contribution | Minimum 10% of project cost |
| Multiple Projects | Up to 25 (private); No limit (cooperatives/FPOs) |
| SC/ST Reservation | 24% of grants (16% SC + 8% ST) |
| Loan Sanction | Within 60 days of application |
| Eligible Entities | PACS, FPOs, SHGs, JLGs, Farmers, Start-ups, PPP |
| PSU Eligibility | NOT directly eligible (only via PPP) |
| Lending Institutions | SCBs, RRBs, SFBs, NBFCs, NCDC |
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