Investments of Rs 1 Lakh Crore Boosted by Agricultural Infrastructure Fund
Agri Infra Fund’s Significant Impact on Agricultural Infrastructure
The Agri Infra Fund (AIF) has facilitated investments exceeding Rs 1 lakh crore across over 1.09 lakh projects, aimed at enhancing farm gate storage, cold storage chains, and logistics. With an impressive Rs 90,000 crore already disbursed and strong backing from the private sector, the initiative targets the reduction of post-harvest losses while also striving to elevate farmer incomes by the fiscal year 2026. Borrowers engaging with AIF are required to contribute a minimum of 10% of the total project expenditure, regardless of any potential capital subsidies.
Government Approvals and Financial Mobilization
To bolster post-harvest infrastructure, including facilities for farm gate storage and logistics, the government has greenlit project proposals worth over Rs 63,500 crore under the AIF since its inception five years ago. Sources indicate that the agriculture ministry has sanctioned projects that have collectively mobilized an investment of Rs 1 lakh crore across various sectors, such as food processing, custom hiring services, cold chains, and warehousing, with a significant proportion of funds coming from private entities. The anticipated disbursement for AIF by the conclusion of this fiscal year is projected to reach around Rs 90,000 crore.
Objectives and Financial Framework of the Scheme
The fund’s primary aim is to establish effective storage and logistics systems for farmers, enabling them to preserve their produce efficiently and sell at optimal market prices by minimizing post-harvest losses and reducing dependency on intermediaries. Launched in May 2020, the AIF aspires to distribute Rs 1 lakh crore through banks and financial institutions by FY26, operating from 2020-21 to 2032-33. The scheme provides loans of up to Rs 2 crore, which can be repaid over a maximum span of seven years. Furthermore, it offers a 3% interest subvention, capped at a 9% interest rate, alongside covering credit guarantee fees paid to banks.
Geographical Distribution of Projects and Enhancement of Farmer Income
In terms of sanctioned projects, states like Punjab (with 21,740 projects), Madhya Pradesh (12,495 projects), Maharashtra (10,418 projects), and Uttar Pradesh (8,563 projects) play significant roles. According to the ministry, advancements in post-harvest management infrastructure—like warehouses, cold storage, sorting and grading units, and ripening chambers—will empower farmers to reach a broader consumer base, thereby increasing their revenue potentials.
Projected Benefits and Strategic Goals
With the implementation of this fund, the agriculture ministry anticipates annual savings from post-harvest losses to be approximately 1.86 million tonnes (MT) and an additional 0.34 MT from horticultural crops. An official stated, “The initial two years of the fund are viewed as a gestation period; however, enhanced marketing infrastructure and logistics at the farm gate will diminish post-harvest losses and elevate farmers’ earnings.” The initiative fosters collaboration among various players in the eco-system, significantly benefiting both entrepreneurs and farmers, while also driving rural industrialization, creating job opportunities, and enhancing markets for processed agricultural products, as per a ministry statement delivered in parliament.
