Agricultural Infrastructure Fund (AIF)

Introduction 

The Agricultural Infrastructure Fund (AIF) is a central government scheme launched by the Government of India in 2020 to strengthen farm-level infrastructure across the country. The fund was introduced to address a long-standing challenge in Indian agriculture: lack of proper storage, processing, and supply chain facilities. Farmers often face heavy losses due to poor post-harvest handling, limited cold storage, and weak market linkages. By creating better infrastructure, the scheme aims to reduce wastage, improve value addition, and ensure that farmers get fair prices for their produce.

Under AIF, financial support is provided in the form of medium- and long-term loans with interest subvention and credit guarantee coverage. The scheme is open to a wide range of eligible groups including individual farmers, Farmer Producer Organizations (FPOs), Primary Agricultural Credit Societies (PACS), Self-Help Groups (SHGs), cooperatives, startups, and private entrepreneurs. This makes it one of the most inclusive agriculture schemes in India, encouraging participation from both small farmers and larger rural enterprises.

The policy behind AIF is simple: better infrastructure leads to stronger markets and higher rural incomes. By supporting investments in warehouses, cold chains, processing units, and market facilities, the fund is designed to modernize Indian agriculture and make it more resilient.

Overview of the Scheme

The Agricultural Infrastructure Fund (AIF) is a scheme of the Government of India, under the Ministry of Agriculture & Farmers Welfare. It was launched in 2020–21 as a central sector financing facility.

Implementing Agencies & Mechanisms

• The Department of Agriculture & Farmers Welfare (DA&FW) is the nodal central agency.
• NABARD (National Bank for Agriculture and Rural Development) acts as a channel partner / implementing agency, working with banks and financial institutions.
• Lending institutions (banks/FIs) must sign MoUs with DA&FW / NABARD for carrying out the loans under AIF.

Funding Pattern & Financial Support

• Total corpus: ₹1,00,000 crore to be disbursed through banks and financial institutions until FY 2025-26.
• Interest subvention: 3% per annum for loans up to ₹2 crore under the scheme. The subvention helps reduce borrowing cost.
• Credit guarantee support: For eligible borrowers (especially FPOs etc.), through schemes like CGTMSE; government bears credit guarantee fee.

Coverage / Sectors / Components

Some of the types of projects/components covered are:

• Post-harvest management infrastructure like cold storage, warehouses, sorting, grading units, ripening chambers.
• Farm gate and aggregation points infrastructure.
• Community farming assets. (A recent expansion added this component.)
• Embedded solar infrastructure through convergence (PM-KUSUM Component-A) for eligible entities.

Current Status

• The scheme is ongoing.
• It was expanded in August 2024 by the Union Cabinet to broaden eligibility, cover more project types, enhance credit guarantee support, and integrate some clean energy elements.
• As of August 2025, more than ₹66,310 crore has been sanctioned under AIF for over 1.13 lakh agricultural projects across India.

Objectives 

• Mobilize medium- to long-term debt financing to support viable projects for post-harvest management infrastructure and community farming assets.
• Reduce post-harvest losses by funding facilities like warehouses, cold stores, sorting & grading units, ripening chambers, and other infrastructure.
• Improve farmers’ income by enabling them to store and preserve produce better, sell directly to markets (fewer middlemen), and add value.
• Provide financial support through interest subvention, credit guarantee, and lower borrowing cost, especially for loans up to ₹2 crore.
• Encourage inclusion of small & marginal farmers, Farmer Producer Organisations (FPOs), Self Help Groups (SHGs), co-operatives, agripreneurs etc. as beneficiaries so infrastructure development is broad-based.
• Promote investment in community farming assets (like shared infrastructure) and cluster-based supply chain infrastructure (for example crop clusters or export clusters) in eligible areas.

Key Features / Benefits 

• Interest Subvention on Loans
  Borrowers get a 3% per annum reduction in interest rate for loans up to ₹2 crore for a maximum of 7 years. (Example: A farmer taking a ₹1.5 crore loan for a cold storage unit will pay interest assuming 3% lower than the normal rate on the entire amount for 7 years.)
• Credit Guarantee Cover
  Loans up to ₹2 crore under AIF are covered by a credit guarantee through CGTMSE. The government pays the guarantee fee. This makes banks more willing to lend.
• Cap on Loan Interest Rates
  The scheme sets a maximum interest rate cap (9%) for loans under AIF to ensure borrowing cost remains manageable.
• Loan Assistance Period and Scheme Duration
  The funding facility runs from 2020-21 to 2032-33. However, loan disbursements will be completed by the end of FY 2025-26.
• Wide Eligibility of Beneficiaries
  AIF helps individual farmers, Farmer Producer Organisations (FPOs), cooperatives, SHGs, startups, agri-entrepreneurs, etc. This inclusivity means small and marginal farmers also get access to benefits.
• Coverage of Post-Harvest & Value-Addition Infrastructure
  The scheme supports building cold storages, warehouses, sorting & grading units, ripening chambers, farm‐gate & aggregation point infrastructure etc. These help reduce losses after harvest and improve quality.
• Support for Community Farming Assets
  AIF also covers infrastructure that can be shared by communities or groups (e.g., shared cold storage, cluster infrastructure). This lowers cost per farmer and expands access.
• Government-borne Administrative & Budgetary Costs
  The government provides a budget for interest subvention, credit guarantee fee, and administrative cost of the project management units. This ensures lenders and implementing agencies are supported.
• Reduced Risk for Lending Institutions
  With credit guarantees and interest subventions, banks face lower risk and are more likely to approve AIF‐backed projects. This helps mobilize finance towards agricultural infrastructure.
• Boost to Farmer Income and Value Realisation
  By enabling storage, preservation, processing, grading and offering better access to markets, AIF helps farmers get better prices. Less wastage means more produce actually sold and better profits.

Eligibility Criteria 

Below are who can apply under AIF, what criteria they must meet, and the documents required.

Who Can Apply / Beneficiary Types & Criteria

• Individual Farmers
  Must be resident Indian farmers. They can apply for eligible projects. No special minimum number of farmers required. (From “Who Can Apply” on the AgriInfra portal)
• Self-Help Groups (SHGs), Joint Liability Groups (JLGs)
  Must be registered or formally recognised, active, with bank linkages. They apply for infrastructure / agriculture-asset projects.
• Farmer Producer Organisations / Companies (FPOs / FPCs), Co-operative Societies, PACS, Marketing Co-operatives, Multipurpose Co-operative Societies
  These must be legally registered under relevant Acts. They need to be active (functioning) organisations in the agriculture supply chain or related infrastructure.
• Agri-Entrepreneurs, Startups, MSMEs
  These must have formal registration (as a business / company / startup). If applicable, must meet regulatory requirements (e.g., Udyam / MSME registration where relevant). The project must be a viable infrastructure project in post-harvest management, farming asset, or integrated processing (as per scheme expansion rules).
• State / Central Agencies, Local Bodies, APMCs, Federations
  State agencies, Agricultural Produce Market Committees (APMCs), federations of cooperatives, federations of FPOs/SHGs are eligible. They must be official bodies recognised by law or by the State/Central Government.
• Special Categories
  The official rules do not require special eligibility differences (age, caste, gender) except via beneficiary type. There is no separate eligibility criterion officially specified only for women / SC / ST in the source I checked. Eligibility is based more on the type of entity than personal categories.

Mandatory Documents & Other Criteria

To apply under AIF, applicants must submit a set of documents. These are needed to verify identity, project viability, and legal standing. Officially required documents include:

• Filled Bank’s loan application form or Customer Request Letter for AIF Loan.
• Aadhaar card or equivalent identity proof. (Identity / address proof)
• Land ownership / land record (if using own land or asset) or proof of land usage or lease, if required.
• Detailed Project Report (DPR) with cost estimates, quotations, etc.
• Quotations of machinery / infrastructure cost.
• Bank account details, bank passbook.
• Registration certificates / proof of registration of the entity (for FPOs, cooperatives, MSMEs, etc.).

Not Eligible / Exclusions

• Stand-alone secondary processing projects are not eligible unless they are integrated with primary processing units. The scheme expansion clarified that standalone secondary processing remains under other schemes (MoFPI etc.).
• Projects must be viable; non-viable proposals can be rejected during appraisal. (Implied by scheme guidelines re “viable projects”)

Application Process

1. Visit the Official Portal
   Go to the Agri Infra Portal: https://agriinfra.dac.gov.in/ – this is the official site where you apply online.
2. Beneficiary Registration / Login
   • Click on “Beneficiary Registration” on the portal.
   • Fill in basic details like name, Aadhaar, type of beneficiary (farmer/SHG/FPO etc.), contact info.
   • If already registered, use Login credentials.
3. Access the Application Form
   • After login, look for the “Apply for Loan” or “Loan Application Process” section.
   • Fill sections covering: beneficiary details; land/farm details; project components you want (cold storage, grading unit, ripening chamber etc.); cost estimates; bank details.
4. Upload / Submit Required Documents
   From the Checklist on Agri Infra site:
   • Aadhaar card / other identity proof
   • Land records / ownership or lease documents if land is involved
   • Detailed Project Report (DPR) with cost estimates / quotations
   • Bank passbook or bank statement, bank details
   • Registration certificates (if the applicant is SHG / FPO / MSME etc.)
5. Submit the Application & Receive Acknowledgement
   • Check that all fields are filled correctly.
   • Submit form. On submission, you’ll get an Application ID / Acknowledgement Number to track progress. (Official portal confirms acknowledgment via MIS platform)
6. Verification & Field Inspection (if applicable)
   • The application may undergo verification of documents.
   • There can be field inspection especially for infrastructure components to check viability. (As per guidelines of scheme)
7. Approval & Sanction
   • After verification, if all is in order, the sanctioning authority approves the loan.
   • You will be notified through the portal or by a bank / implementing agency.
8. Disbursement of Assistance
   • Once approved, the loan amount is disbursed via the bank you specified.
   • Interest subvention & credit guarantee support get processed as per scheme rules.

Offline Route (if available)

The official sources do not clearly mention a separate offline route (like applying through Block Office / ATMA / KVK) for submitting full applications under AIF. The scheme emphasises online MIS platform for applying, monitoring and managing.

If unsure, you may visit your nearest Agriculture Department office or District Agriculture Office for guidance, to check if there’s local facilitation, but the primary route is online.

Official Helpline / Support

• Use the Agri Infra Portal’s FAQs section for many common questions.
• On the portal, there may be contact email / phone details for support (these are displayed for each State / implementing bank). (Check “Contact Us” or “Helpdesk” on https://agriinfra.dac.gov.in)

Tips to Avoid Common Mistakes

• Double-check name, Aadhaar, bank account: mismatch causes delays.
• Make sure cost estimates / quotations are recent and from recognised vendors. Old or vague quotes often get rejected.
• Upload all required documents; missing papers = delay or rejection.
• Keep track of the Application ID once you apply; useful for follow-up.

Challenges or Limitations 

Every scheme has its own set of hurdles, and the Agricultural Infrastructure Fund (AIF) is no exception. Many applicants face small but important issues that can delay or block their benefit. Here are some common challenges and practical tips to overcome them.

1. Challenge: Document mismatch
   Many applications are delayed because the name on Aadhaar, land record, and bank account don’t match.
   What to do: Double-check all records before applying. Update Aadhaar or bank details in advance to avoid rejection.
   
   
2. Challenge: Delay in verification and approval
   Since applications pass through banks and government offices, the process may take time.
   What to do: Keep track of your application ID on the official portal and regularly follow up with your bank or local agriculture office.
   
   
3. Challenge: Lack of awareness about eligible projects
   Some farmers apply for projects that are not supported under AIF, leading to rejection.
   What to do: Go through the official guidelines on https://agriinfra.dac.gov.in before applying. If unsure, consult your Krishi Vigyan Kendra (KVK) or agriculture officer.
   
   
4. Challenge: Seasonal project windows
   Many farmers apply during peak agricultural seasons, which creates backlogs in processing.
   What to do: Apply well before the sowing/harvest season to give banks and authorities enough time to process your request.
   
   
5. Challenge: Limited budget headroom in certain districts
   In high-demand areas, funds may get used up faster, leaving others waiting.
   What to do: Apply early in the financial year to increase your chances of timely approval.
   
   
6. Challenge: Difficulty in preparing Detailed Project Report (DPR)
   A strong DPR is often required, but many farmers struggle to prepare it properly.
   What to do: Seek help from local FPOs, KVKs, or agri-consultants. Banks sometimes provide formats – ask your branch manager for guidance.
   
   
7. Challenge: Bank appraisal delays
   Since banks have their own loan assessment process, applications can slow down.
   What to do: Maintain a good credit history and submit all required financial documents (like passbook, income details) along with the AIF application.
   
   
8. Challenge: Common mistakes in online application
   Applicants often upload the wrong file formats, leave sections incomplete, or miss final submission.
   What to do: Carefully read portal instructions, keep scanned copies of documents ready in PDF/JPEG, and review all details before hitting submit.

Government Support & Future Outlook 

Linkage with Other Schemes & The Road Ahead

• Convergence with PMFME (PM Formalisation of Micro Food-Processing Enterprises)
  There is a Standard Operating Procedure (SOP) in place (from August 2022) allowing PMFME beneficiaries to use the same Detailed Project Report (DPR) and sanction letter, apply via the AIF MIS portal, and get the 3% interest subvention under AIF over and above the PMFME subsidy.
• Integration with PM-KUSUM Component-A
  AIF now allows eligible beneficiaries (farmers, FPOs, cooperatives, panchayats) to link solar power projects under PM-KUSUM Component-A for infrastructure, under its expanded scope. This helps blend clean energy with agriculture infrastructure.
• Complementarity with other agri-missions
  AIF works alongside schemes like the Agricultural Marketing Infrastructure (AMI), Mission Organic Value Chain Development for North Eastern Region (MOVCDNER), Digital Public Infrastructure (DPI), Pradhan Mantri Matsya Sampada Yojana (PMMSY) etc., to build an overall infrastructure ecosystem (storage, value chain, market access etc.).
• Recent Expansion & Update (Aug 28, 2024)
  The Union Cabinet approved extension of what AIF covers: added community farming assets, integrated primary+secondary processing (but not standalone secondary processing), enhanced credit guarantee for FPOs, inclusion of PM-KUSUM solar components.

Practical Example

Here’s how convergence helps a farmer or FPO:
If an FPO sets up a micro food processing unit under PMFME and gets a subsidy of 35% under that scheme, they can, via convergence, also apply through AIF using the same DPR and sanction letter to get 3% interest subvention and credit guarantee. That means lower financing cost plus subsidy. The combined support makes the project much more financially viable.

Conclusion 

The Agricultural Infrastructure Fund (AIF) plays an important role in strengthening rural economies by supporting better storage, processing, and marketing facilities for farmers, FPOs, cooperatives, and agri-entrepreneurs. By lowering credit costs and providing structured financing, the scheme helps small producers and collectives turn ideas into sustainable projects. Those who benefit most include farmers’ groups, startups, and rural enterprises that need affordable finance to build essential infrastructure. If you are interested, the next step is to check your eligibility and apply through the official portal https://agriinfra.dac.gov.in, ensuring your documents are ready and verified with your local agriculture office or bank. Always confirm the latest guidelines on the official site or helpline before applying to avoid errors and delays.
Explore detailed resources on this scheme and the full suite of programmes at ALL ABOUT AGRICULTURE. For one-on-one assistance, call us at +91 8484002620.