Centre extends AIF scheme to boost farm infrastructure investments

Vijay C Roy

The government has approved the continuation of its flagship Agriculture Infrastructure Fund (AIF) scheme beyond 30 September 2026, extending its operational timeline until 31 March 2027. The move would bolster agricultural infrastructure and improve access to financing for projects across the farm sector, according to two people aware of the development.

The extension is expected to give further fillip to investments in post-harvest management infrastructure and community farming assets, helping improve storage, processing and supply-chain efficiency. This assumes significance given that India loses agricultural produce worth ₹1.53 trillion each year due to post-harvest inefficiency.

“The Department of Expenditure has conveyed its approval for the extension of the Agriculture Infrastructure Fund (AIF) scheme until 31 March 2027. The extension will ensure continuity of the programme and provide eligible beneficiaries with additional time to undertake agricultural infrastructure projects," said the first of the two persons cited earlier.

The Agriculture Infrastructure Fund (AIF) scheme provides financing support for post-harvest infrastructure such as cold storages, warehouses and grading units through interest subvention and credit guarantee benefits. By facilitating the creation of such facilities closer to farms, the government aims to reduce crop wastage and help farmers store their produce until they can sell it at better prices.

According to government data reviewed by Mint, as of 25 October, lending institutions have sanctioned about ₹1.03 trillion under the fund for 228,428 projects across India since inception. Since its launch in 2020-21, the Agriculture Infrastructure Fund scheme has mobilised more than ₹1.75 trillion for the agriculture sector. According to the data, Madhya Pradesh, Maharashtra, Uttar Pradesh, Punjab and Gujarat are among the top five beneficiaries of the fund.

"The extension ensures continued support for strengthening agricultural infrastructure and enhancing post-harvest management across the country," said Puneet Singh Thind, founder & director, Northern Farmers Mega FPO, a federation of farmer-producer organizations from five North Indian states.

Queries emailed to the Union ministry of agriculture and farmers welfare on 23 October remained unanswered till press time.

Among the beneficiaries, projects by farmers top the approved proposals with around 55% share, followed by agri-entrepreneurs at 32%, Primary Agriculture Cooperative Societies (PACS) at 3.1%, and startups constituting 1.3%.

AIF's next phase should focus on improving project identification, bankability and last-mile handholding in regions that have yet to fully utilise the scheme, said Srinivas Kuchibhotla, partner, Deloitte India.

According to data, as of 25 October, Primary processing centres, warehouses and cold-chain infrastructure have emerged as the biggest beneficiaries of lending under the AIF scheme, highlighting a growing focus on strengthening India’s post-harvest agricultural infrastructure.

Of the loans sanctioned under the scheme, ₹25,119.5 crore has been granted for primary processing centres, followed by ₹18,064 crore for warehouses and ₹11,718 crore for cold stores and cold-chain infrastructure, according to government data. Another ₹9,556 crore has been sanctioned for farm and harvest automation, while ₹8,463 crore has gone towards custom hiring centres.

The scheme offers a 3% annual interest subsidy on loans of up to ₹2 crore for a maximum period of seven years. For loans exceeding ₹2 crore, the subsidy is applicable only to the first ₹2 crore.

The fund was launched on 8 July 2020 for creation of post-harvest management infrastructure and community farm assets. Under the fund, a loan provision of ₹1 trillion was made through lending institutions, with a capped interest rate of 9%. The scheme is operational for a period of 13 years, from 2020–21 to 2032–33. Loan disbursement under the AIF was originally scheduled to be completed over six years, by the end of FY2025-26. The deadline was subsequently extended to 30 September 2026 and now to March 2027.

Meanwhile, on 13 February, Prime Minister Narendra Modi announced that the AIF’s loan target would be doubled to ₹2 trillion, expanding the scheme’s financing support for agricultural infrastructure.

Vijay C Roy

Vijay C. Roy is a journalist with over 21 years of experience covering various news beats across different organisations such as Business Standard and The Tribune. In the past, he has covered beats such as finance, auto, MSME, commodities, FMCG, pharmaceutical, agriculture, IT/ITES, infrastructure and start-ups. He joined Mint in February 2025, and covers agriculture, food processing, fertilizers, environment and climate change, bringing over two decades of experience reporting on farm policy, food inflation, crop trade, and rural livelihoods.<br><br>Vijay’s areas of reporting include food security and climate change policies, focusing on their impact on different stakeholders and their implications. His expertise lies in simplifying complex agri-economic issues such as edible oil import dependence, cotton and wheat trends, fertiliser subsidies, and climate-related risks. He has covered key developments including global supply disruptions and evolving trade policies, offering both macroeconomic perspective and field-level context. Known for his credible and balanced reporting, he follows a rigorous, fact-based approach that prioritises accuracy and context. He is driven by a commitment to public interest, aiming to make critical agricultural and economic issues accessible while contributing to informed policy and industry discussions.

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