Agriculture Subsidies and Schemes – In India

Table of Contents

Introduction to Agriculture Schemes and Subsidies in India

Agricultural schemes and subsidies are necessary because the Indian economy is mainly dependent on the farming sector. These agricultural schemes are beneficial for the farmers and that they should realize it so on take its benefit. The central government is provided with the fertilizer subsidy whereas water subsidy is provided by the state governments.

A Step by Step Guide to Agriculture Schemes and Subsidies in India

Nowadays the Government of India is giving more priority to the welfare of agricultural farmers. During this regard, it’s implementing several farmers’ welfare schemes to revitalize the agriculture sector and to reinforce their economic conditions. So, the government has rolled out new initiatives, schemes, programmes, and plans to profit all the farmers. Our Indian government gives several subsidies to farmers like fertilizer subsidy, agricultural infrastructure subsidy, irrigation subsidy, credit subsidy, power subsidy, and seed subsidy, etc.

Agriculture Subsidies and Schemes for Fertilizer

Disbursement of cheap chemical or non-chemical fertilizers among the Indian farmers. It amounts to the difference between the price paid to the manufacturer of fertilizer (domestic or foreign) and the price, received from farmers, the remainder of the burden is bear by the Indian government. This subsidy ensures;

  • Cheap inputs to farmers,
  • Reasonable returns to the manufacturer,
  • Stability in fertilizer prices, and
  • Availability of fertilizers to farmers in adequate quantity at the necessity.

Agriculture Subsidies and Schemes for Power

Power subsidy is beneficial for farmers because the government charges low rates for the electricity supplied to the farmers. Power is particularly employed by the farmers for irrigation objectives. It is the difference between the value of generating and distributing electricity to agricultural farmers and the price received from farmers.

Agriculture Subsidies and Schemes for Seed

Agriculture Subsidies and Schemes for Seed.
Agriculture Subsidies and Schemes for Seed.

High yielding plant seeds are often provided by the government at low prices and the longer-term payment options. The research and development activities needed to provide such productive seeds are undertaken by the govt. The expenditure on these could also be a sort of subsidy granted to the farmers. Under this scheme, the credit-linked back-ended capital subsidy is going to be provided at the speed of 25% of the project cost subject to an amount of Rs.25.00 lakh per unit on seed infrastructure development. Under this program, hybrids, high yielding varieties, and good quality certified seeds of major crops are distributed to farmers at subsidized rates 50% for general farmers and 75% for SC/ST farmers.

Agriculture Subsidies and Schemes for Infrastructure

Private efforts in many areas don’t convince to be sufficient to reinforce agricultural production. Storage facilities, power, information about the market, and transportation to the ports, etc. are vital for agricultural production and sale operations. These facilities are within the domain of public goods, the costs of which are huge, and whose benefits accrue to all or any of any the cultivators during a neighborhood. No individual farmer will come to the fore to provide these facilities thanks to their bulkiness and inherent problems related to revenue collections (no one is often excluded from its benefit on the bottom of non-payment). Therefore the government takes the responsibility of providing these and given the condition of Indian farmers a lower cost is often charged from the poorer farmers.

General Agricultural Schemes and Subsidies in India

The government of India, as well as the state governments, initiates several schemes helpful to the farmers. Therefore, it focuses on every segment of the agricultural scheme. Such as each subdivision from staple procurement to the transport and marketing of the produce, subsidies are available. Thus, few schemes like RKVY, SMAM, crop diversification, State plan, NFSM, are important for Indian farmers.

1. Rashtriya Krishi Vikas Yojana (RKVY)

In this scheme, the government offers a 100% subsidy depending on the continued project. Further, aims to help the advancement of the farming sector. Additionally, this is often a state plan scheme, that’s the state official committee grant the subsidy is verifying the farmer’s proposal. Moreover, the governments initiated this as a neighborhood of the National Agriculture Development Programme.

2. National Food Security Mission (NFSM)

NFSM scheme is for improving the machinery instead of their purchasing. Further, this scheme aids in maintaining machines like tractor, tillers, then on in fitness. Therefore, increasing the productivity on the farm. Even though, it’s main aim was to extend productivity, it assists several clusters to achieve the aim.

3. Sub-Mission on Agricultural Mechanization (SMAM)

SMAM strives to help the tiny and marginal farmers by creating hubs that aid within the purchase of the kit. Further, this is often an initiative is in every state of the country. Moreover, this was a response to the acute pollution seen during stubble burning. Thus, mechanization adaptation was feasible to scale back the pollution in Haryana, Delhi, Punjab, and Uttar Pradesh. The SMAM scheme promotes Farm Machinery Training and Testing Institutes (FMTTIs), financial assistance, and encourages farm machinery.

4. PM-Kisan Scheme

This Scheme is an initiative of the Government in this 120 million marginal and small Indian farmers with less than 2 hectares of land will get up to Rs. 6,000 per year. Under the Pradhan Mantri Kisan scheme, cultivators will get Rs. 6,000 in three installments.

5. Neem Coated Urea (NCU)

This scheme is initiated to manage the use of urea, enhance the availability of nitrogen to the crop, and reduce the cost of fertilizer application. NCU slows down the discharge of fertilizer and makes it available to the crop in an efficient manner. By using this NCU scheme the entire quantity of domestically manufactured urea is now neem coated. It reduces the value of cultivation and improves soil health management.

6. Pradhan Mantri Kisan Maandhan Yojana

Under this scheme about 5 crores, marginalized farmers will get a minimum pension of Rs 3000 / month on attaining the age of 60. Those who fall within the age bracket of 18 – 40 years are going to be eligible to use the scheme. Under this scheme, the farmers are going to be required to form a monthly contribution of Rs 55 to 200, counting on their age of entry, within the Pension Fund till they retire 60 years. The Government will make an equal contribution of an equivalent amount within the pension fund for the cultivators.

7. Pradhan Mantri Fasal Bima Yojana (PMFBY) Scheme and Restructured Weather Based Crop Insurance Scheme (RWBCIS)

PMFBY scheme and Restructured Weather Based Crop Insurance Scheme (RWBCIS) were launched from Kharif 2016 to supply comprehensive crop coverage from pre-sowing to post-harvest losses against non-preventable natural risks. These schemes are only risk mitigation tools available to farmers at extremely low premium rates payable by farmers at 1.5% for Rabi Crop, 2% for Kharif crops, and 5% for annual commercial/horticultural crops. The balance of the actuarial premium is shared by the Central and State Governments on a 50:50 basis. The government schemes are voluntary for States available in areas and crops that are notified by the State Governments. 

PMFBY (Pradhan Mantri Fasal Bima Yojana) scheme is the government-sponsored crop insurance scheme and this will integrate several stakeholders on one platform.

The main Objectives of PMFBY scheme is;

1. To provide insurance coverage and financial support to the Indian farmers.

2. To stabilize the income of farmers to make sure their continuance in farming.

3. To encourage Indian farmers to adopt innovative and modern practices.

4. To make sure the flow of credit to the agriculture sector.

8. Kisan Credit Card (KCC) Scheme

KCC scheme is one more important Government scheme that gives farmers timely access to credit. Kisan Credit Card scheme was introduced in 1998 to supply short-term formal credit to the farmers. Kisan Credit Card scheme was launched to ensure that the credit requirements for cultivators in the agriculture, fisheries, and animal husbandry sectors were being met. Under the KCC scheme, farmers are given short-term loans to purchase equipment and for their other expenses as well. Many banks provide KCC including SBI, HDFC, ICICI, and Axis.

9. Pashu Kisan Credit Card Scheme

For the development of the animal husbandry sector, the Indian Government has launched ‘Pashu Kisan Credit Card’ for livestock farmers. Haryana is the first state to provide Pashu Kisan Credit Card to the farmers. Under this Pashu Kisan Credit Card Scheme, farmers are given loans to buy a cow, buffalo, and goat, etc.

10. Soil Health Card

To help farmers to enhance productivity from their farms by letting them know about nutrient/fertilizer requirements for their farms. This scheme studies and reviews the health of soil or rather we can say an entire evaluation of the standard of soil right from its characteristics, to water and nutrients content and other biological properties. It will also have corrective measures that a farmer should adopt to obtain a better yield.

11. Paramparagat Krishi Vikas Yojana (PKVY)

Paramparagat Krishi Vikas Yojana is implemented with the aim to market organic cultivation in India. To improve soil health also as organic matter content and to boost the net income of the farmer so on realizing premium prices. PKVY may be a sub-component of the Soil Health Management (SHM) scheme. This scheme aims at the development of models of excellence; ensures long-term soil fertility buildup, resource conservation, and offers safe and healthy food without the utilization of agro-chemicals. It also aims to empower farmers through cluster approach, input production, quality assurance, value addition, and marketing through innovative means.

12. Gramin Bhandaran Yojna

The main objective is to create scientific storage capacity with allied facilities in rural areas. To meet the wants of farmers for storing farm produce processed farm produce and agricultural inputs. Promotion of grading, standardization, and internal control of agricultural produce to enhance their marketability.

13. Rashtriya Krishi Vikas Yojana

Under this Scheme, funds are provided for incentivizing Certified/HYV seeds supply to farmers, Agriculture Mechanisation, Enhancement of Soil Health, Watershed activities, Strengthening of Market infrastructure and Marketing development, Infrastructure to promote extension, Support to Organic and Biofertilizers, Research activities by the State Agricultural Universities, Agro-processing, Strengthening of Laboratories for internal control activities, Production of quality planting material of Horticulture crops, and, Installation of rain gauge stations, etc.

14. Krishi Bhagya

The main aim of this scheme is to improve the rain-fed agriculture scenario with the efficient management of rainwater and enhancing farm productivity. This also aims for the sustainable development of agriculture. Thrust is on the conservation of water and promoting Dryland horticulture. The components of the Krishi Bhagya schemes are farm ponds, polythene lining/alternate lining models, diesel pump sets, micro-irrigation (drip/sprinkler), and shad net round the farm ponds

NABARD Agriculture loans in India

National Bank for Agriculture and Rural Development (NABARD) may be a development financial organization in India that manages credit-related concerns like planning, policy, and operations for agriculture and rural undertakings. NABARD may be a provider of funding for agriculture-related activities and rural development.

Functions of NABARD
  • Providing financing services for the development of rural India
  • Organizing and managing funding programs for agriculture
  • Policymaking for rural financial institutions
  • NABARD provides funding services for the development of food processing units in designated food parks
  • It offers lending services to cold chain and warehouse and cold storage infrastructure
  • NABARD provides short-term and long-term refinance services to its customers  providing direct refinance services to cooperative banks
  • It also offered credit facilities to marketing federations
  • Specializes in providing long-term irrigation system and rural infrastructure development funds
  • This scheme offers every farmer the chance to get necessary machines, importantly tractors. However, they expect a deposit of 15% of the tractors or machinery costs. Nonetheless, NABRAD provides about 30% of the value as a tractor subsidy and 100% for other transport machinery.

Agriculture Subsidies and Schemes for Promoting Machinery

Common Objectives of Subsidiary Schemes Promoting Machineries;

  • To adapt to newer and faster machines
  • Further, to facilitate machine purchasing
  • Helping to decrease the cost of cultivation
  • To ensure the timeliness of cultivation timing
  • To improve the livelihood of the farmers

Agriculture Subsidies and Schemes in Karnataka

Karnataka government has three visions regarding the farming sector. The three visions are; one to maintain the timeliness, second to increase productivity, and finally to reduce human labor. Therefore, the farmer can easily achieve the goal by inculcating the mechanization of farming. Addressing the vision as well as the solution, the government plans on providing all the machines on a rental basis. And, this would be under the Uber for Agricultural Services scheme with an initial investment of Rs 87.5 crore to set up the idea. Further, the middle in association with automobile makers helps the farmers on a rental basis. Besides, loans are also available at the same interest rate as Agricultural loans with up to 9 years repayment time.

Organic farming and Certification in Karnataka – The main objective of this program is to promote the organic farming area by increasing certified organic areas in the next 3 years duration. It is also to focus on the market-oriented commodity in potential areas to get the bulk quantity of genuine organic produce through the farmer’s groups to satisfy the growing demand for domestic. This program is going to be implemented through the Karnataka State Organic Certification Agency (KSOCA) on project mode.

National Mission on Oilseed and Oil Palm – The objective of this programme is to extend the production and productivity of oilseeds, through the purchase of breeder seeds, distribution of certified seeds of pulses and oilseeds.

Agriculture Subsidies and Schemes in Tamil Nadu

The Agriculture Engineering Department in Tamil Nadu has sanctioned Rs. 24.75 lakh as a subsidy to farmers of the district for purchasing tractors. The Tamil Nadu administration is offering assistance under the Agricultural Mechanization Program. Accordingly, aids in purchasing a spread of machines namely Power tiller, Paddy Trans-planter, Rotavator, seed Drill, Zero till Seed, Fertilizer Drill, Bund Former, and Power sprayer.

However, it provides 40% and 50% subsidy to general and SC/ST farmers respectively. Also, the farmer is given the option to select the machinery of their choice. Accordingly, the govt allots Rs 30.75 lakhs for supporting the initiative.

Agriculture Subsidies and Schemes in Kerala

The majority of the population in Kerala is dependent on agriculture. The major crops grown in Kerala are Coconut, Paddy, Banana, Pepper, Cashew, Areca nut, and Rubber, etc. Kerala is an Agrarian economy. Coconut is the most important crop in Kerala.

For several agricultural schemes, the Kerala government has taken a step forward by the addition of software- Farm Mechanization System (FMS) to ensure transparency in distribution. Further, for tractors, they provide a 25% subsidy. Though, in other cases like for tiller, rotavator, and other few machines only loans are available. Also, the repayment is within 5 to 10 years excluding the gestation period.

Agriculture Subsidies and Schemes in Andhra Pradesh

In Andhra Pradesh, agriculture plays an important role. Paddy is the main crop grown in Andhra Pradesh. Other crops grown in Andhra Pradesh are Maize, Jowar, Cotton, Sugarcane, Groundnut, Pulses, and Chillies. The horticulture crops grown in Andhra Pradesh are Mango, Guava, Oil Palm, Coconut, Cashew, Lemon etc. In the scheme of Rythu Radham, the tractors have distributed to the farmers. However, it’s necessary to be eligible that’s must own a minimum of one acre of land, shouldn’t own a tractor, and must have all supporting documents. And, loans are available from ICICI bank with a repayment deadline of 5 years.

Agriculture Subsidies and Schemes in Maharashtra

Maharashtra is a leading State in agriculture. The major crops grown in Maharashtra are Rice, Bajra, Wheat, Tur, Mung, Urad, Gram, and other pulses. The State is a major producer of oilseeds. In Farm Mechanization Scheme, farmers encourage to inculcate the utilization of machinery techniques. Within the case of small, marginal, and SC/ST farmers, it provides a 35% tractor subsidy and 50% for other machines. General categories get a subsidy of 25% for tractor and 40% for other machines. Also, it assists within the purchase of a tractor, power tiller, Threshers, vehicles, and other agricultural implants. Additionally, facility Term loans are offered with repayment of 5 to 9 years. And, no margin for loans under Rs 1 lakh.

Agriculture Subsidies and Schemes in Madhya Pradesh

The MP government offers a subsidy for little tractors through the Macro- Management Scheme. Subsequently, this scheme is in association with the state and therefore the union government. In this scheme, all farmers are eligible to get the benefit. Also, this scheme is successful because the availability of tractor is low in Madhya Pradesh.

Agriculture Subsidies and Schemes in Uttar Pradesh

The scheme for purchasing tractor in UP is that the Krishi Yantra. Thus, it provides 25% of cost aid or Rs 45,000, whichever is less.

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Agriculture Subsidies and Schemes in Assam

Assam produces both food and cash crops. The major food crops produced within the state are Rice (Paddy), Maize (Corn), Pulses, Potato, and Wheat, etc., while the principal cash crops are Tea, Jute, oilseeds, Sugarcane, Cotton, and Tobacco. Chief Minister Samafre Gramya Unnayan Yojana (CMSGUY) is responsible for tractor subsidy in this state. Thus, CMSGUY subsidy offers a 70% subsidy up to Rs 5.5 lakhs. Accordingly, the eligible farmer should own 2 acres of land. Nevertheless, a group (8-10) of farmers benefits from this scheme. Following approval, 70% is obtainable as a subsidy, 20% within the form of a loan, and 10% would be the farmer’s share. That apart, SBI also provide loan to help within the purchase of other machines.

Agriculture Subsidies and Schemes in Odisha

The major crops in Odisha are Rice, Pulses, Oilseeds, Jute, Coconut, and Turmeric. The crops such as Tea, Cotton, Groundnut, and Rubber are of great economic importance in other parts. Odisha contributes one-tenth of the entire Rice produced within the country.

In Odisha state, the capital investment and farm Mechanization schemes are prominent. Also, provides a 50% subsidy for tillers and 40% for tractors. Hassle-free loans are offered by Odisha Gramya bank to buy any agro- vehicle that aids cultivators. Consequently, offers 85% of the cost and other machines with a margin of just 15% of the total cost.

Agriculture Subsidies and Schemes in Gujarat

Tobacco, cotton, and groundnuts are major crops in Gujarat. Other major crops produced are Rice, Wheat, Jowar, Bajra, Maize, and Gram. Animal husbandry and dairying have played an important role within the rural economy of Gujarat. In Gujarat, the Tractor subsidy is given over 25% subsidies for the general category and 35% for special categories. Besides, training and workshops are conducted to spread awareness about the importance of agricultural machines. Loans from Dena Gujrat Gramin bank are also easily attainable.

Agriculture Subsidies and Schemes in Telangana

Agriculture plays a vital role in the Telangana economy, which enhances the overall performance of the Agriculture sector. Telangana state has bountiful resources, fertile soils, and diversified cropping patterns. Telangana Farmers mainly depend on rain-fed water sources for irrigation. Rice is the major food crop in Telangana. The important food crops that are grown in Telangana state are Rice, Maize or Corn, Red Gram, Jowar, Green Gram, Sesame, Castor, Cotton, Groundnut, Soya bean, Sugar cane, Mango, and Black Gram.

Yantra Lakshmi Scheme Telangana – Tractor subsidy
  • The Telangana Government has launched a tractor subsidy for farmers in the state. Under this Yantra Lakshmi scheme, the government will provide subsidies along with loans for purchasing tractors for farmers.
  • Farm Mechanization Scheme will provide a 50% subsidy for the purchasing tractors and other types of farm equipment along with loans for reaming 50%.
  • The scheme is implemented in association with the center for the Mechanization of Agriculture sector.
  • 50% subsidy on the purchasing tractor for individual farmers and co-operative societies.
  • Loans from the nationalized banks for remaining about 50% amount.
  • Under the scheme if the tractor costs approximately Rs. 10 lakh then the farmers will get it for about Rs. 5 lakh rupees and for the remaining 5 lakh amount farmers can apply for the loan from the nationalized banks
  • For SC/ST farmers 100% subsidy will be provided for the purchase of tractor along with trolleys and other equipment’s
‘Rythu Bandhu’ Scheme in Telagana

The Rythu Bandhu scheme has been launched by the Telangana government for the development of farmers. The Telangana government is providing 58.33 lakh farmers, Rs. 5000 per acre per season to support the farm investment for Rabi and Kharif seasons.

To improve agriculture productivity and income to the farmers besides breaking the vicious cycle of rural indebtedness Agriculture Investment Support Scheme is known as Rythu Bandhu. Investment Support for Agriculture and Horticulture crops is being provided about Rs. 5,000 per acre per season for purchase of farm inputs such as Seeds, Fertilizers, Pesticides, Labor, and other investments twice a year, for Rabi and Kharif seasons. Therefore, this is the first direct farmer investment support scheme in India, where the cash is paid directly.

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