Last Updated: September 17, 2025
Agricultural Subsidies in India: A Complete Guide for Farmers
Agricultural subsidies are money or support that the government gives to farmers to help them with farming costs and increase their income. These subsidies make farming cheaper and help farmers buy seeds, fertilizers, machines, and get loans at lower rates. In India, the government spends about 2% of the country’s total money (GDP) on farm subsidies.forumias
Here are the key things you will learn:
- What are agricultural subsidies and why they matter
- Different types of subsidies available for farmers
- How to get agriculture loan subsidy 2021 and other financial help
- State-wise schemes in Rajasthan, Haryana, and Punjab
- Steps to apply for subsidy on agriculture equipment
What Are Agricultural Subsidies
Agricultural subsidies are government payments made to farmers, farm businesses, and agricultural organizations. Think of it as the government helping farmers by paying part of their farming costs. This makes it easier for farmers to grow crops and earn money.wikipedia
The government started giving subsidies to farmers since farming can be risky. Bad weather, pests, or low crop prices can make farmers lose money. Subsidies help protect farmers from these problems and make sure the country has enough food.
In India, subsidies help both small farmers with tiny farms and larger farmers. The goal is to make farming profitable and keep food prices affordable for everyone.
Types of Agricultural Subsidies in India
India has many different types of subsidies. I will explain each type in simple terms.
Input Subsidies
Input subsidies help farmers buy things they need for farming at cheaper rates. These include fertilizers, seeds, water, and electricity. iisd
Fertilizer Subsidies make up about 45% of all input subsidies. The government pays fertilizer companies so farmers can buy urea and other nutrients at lower prices. For example, if urea costs 100 rupees to make, the government might pay 60 rupees and farmers pay just 40 rupees. rangde
Electricity Subsidies account for about 30% of input subsidies. Many state governments give free or very cheap electricity to farmers for running water pumps. This helps farmers water their crops without worrying about high electric bills. rangde
Irrigation Subsidies make up 16% of input subsidies. Under schemes like PM Krishi Sinchai Yojana, farmers get up to 55% support for drip and sprinkler systems to save water. drishtiias+1
Seed Subsidies help farmers get good quality seeds at lower prices. Programs like the Seed Village Program give farmers high-yielding, disease-resistant seeds. drishtiias
Credit and Insurance Subsidies
Agriculture loan subsidy 2021 and similar credit schemes help farmers get cheaper loans. The Interest Subvention Scheme lets farmers get short-term loans up to Rs 3 lakh through Kisan Credit Card at 7% interest rate. nabard+1
If farmers repay their loans on time, they get an extra 3% discount, bringing the effective rate to just 4%. This means farmers pay much less interest than normal bank loans. nabard
Pradhan Mantri Fasal Bima Yojana (PMFBY) protects farmers from crop failure. Farmers pay just 1.5-5% premium, and the government pays the rest.drishtiias
Output Subsidies
Output subsidies help farmers get good prices for their crops. The Minimum Support Price (MSP) guarantees minimum prices for 22 crops like wheat, rice, pulses, and oilseeds. Government agencies like Food Corporation of India buy crops from farmers at these guaranteed prices.drishtiias
Infrastructure Subsidies
The National Horticulture Board gives 35% subsidy in general areas and 50% in North East and hilly areas for building cold storage facilities. This helps farmers store their produce without spoiling.drishtiias
State-Wise Agricultural Subsidy Schemes
Different states have their own extra subsidy programs for farmers.
Agriculture Department Rajasthan Subsidy
Agriculture department Rajasthan subsidy schemes include several programs for farmers in the state. The Raj Kisan Sathi Portal helps farmers register for over 150 agricultural schemes and track subsidy payments.tractorjunction+1
Key Rajasthan schemes include:
- Kisan Rin Mochan Yojana for loan waivers
- Micro-irrigation subsidy with up to 70% support for drip and sprinkler systems
- Farm mechanization subsidies for tractors and equipment
- Organic farming incentives
Farmers can access these through https://rajkisansathi.nic.in/.rajasthan
Haryana Agriculture Subsidy 2021
Haryana agriculture subsidy 2021 programs focus on agriculture machinery subsidy. Farmers registered on the MFMB portal can get 40-50% subsidy on agriculture machines.agriharyana
The selection happens through lottery system under District Level Executive Committee. Farmers can buy maximum 2 types of machines and must not have taken subsidy on the same machine in the last three years.agriharyana
Punjab Agriculture Department Subsidy
Punjab agriculture department subsidy schemes include support for farm mechanization and equipment. Punjab has been focusing on helping farmers move away from water-intensive crops and adopt sustainable farming methods.
SBI Agriculture Gold Loan Subsidy
SBI agriculture gold loan subsidy is a special scheme where farmers can get loans against their gold jewelry at subsidized rates. Under the interest subvention scheme, farmers can get up to 36% subsidy on interest.deal4loans
Here are the subsidy rates:
- Small and marginal farmers: 25% subsidy
- Women farmers: 33.33% subsidy
- SC/ST farmers: 40% subsidy
The loan amount should not exceed Rs 3 lakh and must be used for agricultural purposes. Farmers need a valid Kisan Credit Card to apply for this subsidy.deal4loans
Agriculture Machine Subsidy and Equipment Subsidies
Agriculture machine subsidy and agriculture machinery subsidy help farmers buy modern equipment at lower costs. The Sub Mission on Agricultural Mechanization provides these benefits:aed.tn
For individual machinery:
- 50% subsidy for SC, ST, Small, Marginal and Women farmers
- 40% subsidy for other farmers
- Extra 20% subsidy for small and marginal SC/ST farmers
Subsidy on agriculture equipment covers items like:
- Tillers and tractors
- Harvesters and threshers
- Irrigation equipment
- Processing machines
Farmers can get subsidies on equipment like rotavators, cultivators, seed drills, and multicrop threshers.aed.tn
How Agricultural Subsidies Work
Let me explain how farmers actually get subsidies in simple steps.
The government usually pays the subsidy in two ways:
- Direct payment to suppliers (like fertilizer companies)
- Reimbursement to farmers after purchase
For fertilizer subsidies, companies sell products to farmers at reduced rates and the government pays the difference to companies. For equipment subsidies, farmers often pay the full amount first and then get money back from the government.rangde
Benefits of Agricultural Subsidies
Subsidies help farmers in many ways:
Lower Costs: Farmers spend less money on seeds, fertilizers, and equipment. This leaves more money as profit.
Better Technology: Subsidies on modern equipment help farmers use better technology to increase crop yields.
Risk Protection: Insurance subsidies protect farmers from weather damage and crop failure.
Stable Income: Price support through MSP gives farmers guaranteed income even when market prices are low.
Credit Access: Subsidized loans help farmers get money for farming without paying high interest rates.
Challenges with Current Subsidy System
Subsidies help farmers, but there are some problems too.
Environmental Issues: Free electricity for water pumps leads to overuse of groundwater. This can cause water shortage problems in the future.iisd
Budget Burden: The government spends huge amounts on subsidies, which affects spending on other important areas like roads and schools.forumias
Unequal Distribution: Larger farmers often get more benefits than small farmers who need help the most.iisd
Market Distortion: Some subsidies encourage growing certain crops even when there is no demand, leading to waste.
How to Apply for Agricultural Subsidies
Here is a step-by-step guide to apply for various subsidies:
Step 1: Get Required Documents Ready
Collect these documents:
- Aadhaar card
- Land ownership papers
- Bank account details
- Kisan Credit Card (if available)
- Income certificate
Step 2: Register on Government Portals
Visit your state agriculture department website or Common Service Centers. Create an account with your Aadhaar number.
Step 3: Choose the Right Scheme
Look through available subsidies and pick ones that match your farming needs. Read eligibility criteria carefully.
Step 4: Submit Application
Fill out application forms completely and upload required documents. Double-check all information before submitting.
Step 5: Track Application Status
Most portals let you check application status online. Note down your application number for future reference.
Step 6: Complete Verification Process
Officials might visit your farm for verification. Make sure you are available during verification time.
Step 7: Receive Subsidy Payment
Once approved, subsidy money will come directly to your bank account or you can collect it from designated centers.
Future of Agricultural Subsidies in India
The government is working to make subsidies more effective and less wasteful. Some changes being planned include:
Direct Benefit Transfer: More subsidies will be paid directly to farmers’ bank accounts instead of going through middlemen.drishtiias
Technology Integration: Using satellites and GPS to monitor subsidy use and prevent misuse.
Sustainable Farming Focus: More subsidies for organic farming and water-saving techniques.
Better Targeting: Focusing subsidies on small and marginal farmers who need help the most.
Data on Agricultural Subsidies in India
| Subsidy Type | Share of Total Input Subsidies | Main Benefits |
|---|---|---|
| Fertilizer | 45.6%iisd | Lower fertilizer costs |
| Electricity | 30%iisd | Free/cheap electricity for irrigation |
| Irrigation | 16.4%iisd | Water supply and conservation |
| Credit | 5.07%iisd | Cheaper loans |
| Insurance | 2.69%iisd | Crop failure protection |
Next Steps for Farmers
If you are a farmer looking to benefit from subsidies, here is what you should do:
Get Information: Visit your nearest agriculture extension office or Common Service Center to learn about available schemes in your area.
Prepare Documents: Keep all required documents ready and updated. This will help you apply quickly when schemes are announced.
Join Farmer Groups: Consider joining Farmer Producer Organizations (FPOs) or Self Help Groups, as they often get better subsidy rates.
Stay Updated: Follow government agriculture websites and local agriculture officers for updates on new schemes and application deadlines.
Use Technology: Download government apps and use online portals to apply for subsidies and track your applications.
Plan Your Farming: Choose crops and farming methods that align with available subsidy schemes to maximize benefits.
Frequently Asked Questions
Q: What is the maximum loan amount covered under agriculture loan subsidy schemes?
A: Under the Interest Subvention Scheme, farmers can get subsidized loans up to Rs 3 lakh through Kisan Credit Card at 7% interest rate.nabard
Q: How much subsidy can farmers get on agriculture machinery?
A: Farmers can get 40-50% subsidy on agriculture machinery, with SC/ST, small, marginal and women farmers getting 50% subsidy and other farmers getting 40% subsidy.aed.tn
Q: What documents are needed to apply for SBI agriculture gold loan subsidy?
A: You need a valid Kisan Credit Card account, loan agreement, identity proof, address proof, and KCC account statement.deal4loans
Q: Which crops are covered under Minimum Support Price?
A: MSP covers 22 crops including wheat, rice, pulses, oilseeds, and provides fair and remunerative price for sugarcane.drishtiias
Q: How can farmers in Rajasthan apply for agriculture subsidies?
A: Farmers in Rajasthan can register and apply through the Raj Kisan Sathi Portal at https://rajkisansathi.nic.in/ which covers over 150 agricultural schemes.rajasthan
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