AIF Scheme: Start your own business alongside farming; the government will provide a low-interest loan of up to ₹2 crore..
Farmers who toil to grow crops often have to sell their produce at throwaway prices. Fruits, vegetables, and grains frequently spoil immediately after harvest due to a lack of modern storage and processing facilities. To rescue farmers from this predicament, the Central Government has introduced the Agriculture Infrastructure Fund (AIF) scheme. This scheme offers farmers a fantastic opportunity to go beyond merely being crop producers and become traders and agri-entrepreneurs of their own produce. Farmers can start their own agri-business by availing of low-interest loans of up to ₹2 crore from the government.
The scope of the AIF scheme has been made very broad so that every individual and group associated with the rural and agricultural economy can benefit from it. Any ordinary farmer can apply for this scheme. Additionally, Self-Help Groups (SHGs), Farmer Producer Organizations (FPOs/FPCs), Joint Liability Groups (JLGs), and modern agri-startups operating at the rural level are also eligible. Primary Agricultural Credit Societies (PACS), marketing cooperative societies, and Agricultural Produce Market Committees (APMCs) can also avail the benefits of the AIF scheme.
What are AIF loans used for?
The primary objective of this scheme is to strengthen post-harvest infrastructure, enabling farmers to add value to their produce before bringing it to market, rather than selling it immediately. Various types of agri-businesses can be established under this scheme.
Warehouses, silos, and modern cold storage: Large warehouses and silos can be constructed to protect grains from moisture and pests. Meanwhile, cold storage facilities, pre-cooling units, and secure pack-houses can be set up for perishable products like fruits, vegetables, and milk.
Temperature-controlled logistics: Loans are also available for purchasing insulated vehicles and reefer vans to safely transport perishable agricultural products from one city to another.
Grain and Pulse Processing Units: Mills for producing flour (*atta*), refined flour (*maida*), semolina (*suji*), and broken wheat (*daliya*) from wheat; paddy milling and polishing units; pulse mills; and modern machinery for grain grading and de-stoning (removing pebbles) can be set up.
Fruit, Vegetable, and Oilseed Processing: Facilities such as ripening chambers for safe fruit ripening, deep-freezing plants (IQF) to extend the shelf life of vegetables, modern oil expellers (*ghani*/*kolhu*), and solvent extraction units can be established.
Packaging and Safety Units: Loans can also be availed for setting up facilities for the attractive packaging of agricultural products and irradiation units to protect them from bacteria.
You can get detailed information about the activities eligible for AIF loans by clicking here.
AIF Loan Amount and Interest:
Under the scheme, loans are sanctioned by banks based on project cost and viability. These loans are available without collateral (guarantee). Loans of up to ₹2 crore can be availed. The Central Government provides an annual interest subvention (subsidy) of 3% on the loan for a maximum period of 7 years. For instance, if a loan is obtained at an interest rate of 9%, a 3% interest subsidy applies, bringing the effective interest rate down to just 6%. It is important to note that this is not a direct cash grant from the government; rather, it is a concessional bank loan that must be repaid in installments within a stipulated timeframe.
How to Apply for an AIF Loan?
Decide on the Business: First, you must decide which agribusiness venture you wish to undertake—such as setting up a warehouse, cold chain facility, pulse mill, or packaging unit.
Prepare a Detailed Project Report (DPR): Have a DPR prepared for your project by a technical expert or a Chartered Accountant. This report should include details regarding land status, machinery costs, total project cost, projected production, market demand, and a comprehensive financial plan for loan repayment. Application via Online Portal: Register on the official online portal of the Agriculture Infrastructure Fund and submit your application along with the Detailed Project Report (DPR) and necessary documents.
Bank Verification and Loan Approval: Following preliminary verification by the nodal agency, your application will be forwarded to the concerned bank. The bank will approve the loan after assessing your repayment capacity and the project's viability.
Direct Benefit of Interest Subvention: Once the loan is disbursed, the benefit of a 3% interest subvention will begin to be credited to your loan account in accordance with the prescribed guidelines.
Disclaimer: This content has been sourced and edited from News18 Hindi. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.
