Agriculture Infrastructure Fund (AIF): A Complete Guide for Farmers, Entrepreneurs, and Startups

Agriculture is the backbone of India’s economy, but farmers often face challenges like post-harvest losses, lack of storage, and weak supply chain infrastructure. To solve these issues, the Government of India launched the Agriculture Infrastructure Fund (AIF)—a ₹1 lakh crore Central Sector Scheme that finances modern agricultural infrastructure and helps farmers, entrepreneurs, and agri-startups build a stronger ecosystem.

Agriculture Infrastructure Fund (AIF)

Objective: Increase farmer income and reduce post-harvest losses by developing farm-gate and aggregation point infrastructure.
Launch Date: 15th May 2020
Fund Size: ₹1,00,000 crore
Scheme Type: Central Sector Scheme (National Agriculture Infra Financing Facility)
Scheme Period: 2020-21 to 2032-33
Interest Subvention: 3% per annum for loans up to ₹2 crore, for a maximum of 7 years
Credit Guarantee: Govt.-backed coverage under CGTMSE for loans up to ₹2 crore (fee paid by Government)

Objective of Agriculture Infrastructure Fund

The scheme’s overall goal is to create an integrated agricultural ecosystem that connects farmers, businessmen, government, banking, and consumers.

- For Farmers: Improved marketing infrastructure, reduced wastage, better productivity.
- For Government: Increased private investment and stronger agricultural supply chains.
- For Agri-Entrepreneurs & Startups: Access to low-interest, collateral-free loans to drive innovation.
- For Banks: Lower lending risk and a wider customer base.
- For Consumers: Better quality produce at affordable prices.

Features of Agriculture Infrastructure Fund

- Projects Sanctioned: 83,462 projects worth ₹51,148 crore (as per latest e-book data).
- Convergence: Works alongside other Central/State schemes; beneficiaries can claim additional subsidies (“Top Up benefits”).
- Single Online Window: Easy application and processing in collaboration with banks.
- Interest Subvention: 3% p.a. on loans up to ₹2 crore (per project, one location, max 7 years).
- Project Limits:
  - Private entities: Max 25 projects (each up to ₹2 crore with subvention).
  - Cooperatives, FPOs, SHGs, State agencies: No limit.
- Moratorium: 6 months to 2 years for repayment (interest subvention applies).
- Disbursement: To be completed within 6 years (2020–21 to 2025–26).

Projects Covered under AIF

AIF primarily funds Post-Harvest Management Infrastructure and Viable Farming Assets.

Post-Harvest Examples: Warehouses, cold storage, silos, sorting/grading units, packaging units, assaying labs, logistics (reefer vans), and primary processing units.
Viable Farming Assets: Organic input production, CBG plants, drones, AI-based agri-solutions, farm automation, custom hiring centers, hydroponics, mushroom farming, vertical farming, polyhouses, tractors, and solar-powered assets (PM-KUSUM).

⚠️ Exclusion: Standalone secondary processing units are not eligible.

Who Can Apply under AIF?

A wide range of beneficiaries are eligible, including:

Farmers, FPOs & Federations
Agri-entrepreneurs (Proprietorship, Partnership, LLP, Pvt. Ltd.)
Agricultural Produce Market Committees (APMCs)
Self Help Groups (SHGs) & Federations
Cooperatives & PACS
Startups
State Agencies & PPP Projects

Benefits under AIF

3% Interest Subsidy on loans (max ₹2 crore, up to 7 years).
Credit Guarantee cover under CGTMSE, fee paid by Government.
Capital Subsidy benefits from other government schemes as a “Top-Up”.

KIP Services on AIF

At KIP, we provide end-to-end support to ensure maximum benefits under AIF:

Business & subsidy updates
Subsidy Viability Reports (SVR)
MSME/Startup registration & business modeling
DPR preparation
Bank loan documentation & processing
Subsidy filing & approval support
Regular compliance for timely incentives

Frequently Asked Questions (FAQs)

Q1: What is the main purpose of the Agriculture Infrastructure Fund (AIF)?

To increase farmer income and reduce post-harvest losses by financing farm-gate and aggregation point infrastructure.

Q2: How much financial assistance is available under AIF?

A total facility of ₹1,00,000 crore. Loans up to ₹2 crore enjoy 3% interest subvention for 7 years.

Q3: Are there any collateral requirements for AIF loans?

No. Loans up to ₹2 crore are collateral-free with a credit guarantee cover under CGTMSE, fee paid by the Government.

Q4: What kind of projects are covered under AIF?

Post-harvest infrastructure (warehouses, cold storage, packaging, processing) and viable farming assets (hydroponics, mushroom farming, drones, tractors, etc.). Standalone secondary processing is not eligible.

Q5: How many projects can one entity undertake under AIF?

Private entities can undertake up to 25 projects (with interest subvention per project). FPOs, SHGs, and state agencies have no limit.

Q6. Is there a moratorium period for repayment?

Yes. Repayment moratorium ranges from 6 months to 2 years, and interest subvention applies during this period.