New Delhi: The government has earmarked ₹8,550 crore in financial assistance this fiscal to help 150,000 small and marginal farmers access farm equipment, as it seeks to boost agricultural mechanisation and curb stubble burning through improved crop residue management.
Under the Sub-Mission on Agricultural Mechanisation (SMAM), including its crop residue management (CRM) component, the government will also support the establishment of 5,000 custom hiring centres and hi-tech hubs, two government officials aware of the matter said, citing the targets set by the finance ministry's department of expenditure for the agriculture ministry. Custom hiring centres and hi-tech hubs are facilities where farmers can rent machinery at affordable rates instead of purchasing costly equipment outright.
Stubble control
The targets form part of the Centre's broader strategy to reduce stubble-burning incidents in key agricultural states by promoting mechanised residue management and improving access to farm machinery.
“The department of expenditure has linked the scheme's performance to measurable outcomes, including wider adoption of mechanised farming practices and a reduction in stubble-burning incidents,” said the first of the two officials cited earlier, both of whom spoke on the condition of anonymity.
The scheme is particularly aimed at small and marginal farmers who often find it difficult to invest in expensive equipment such as happy seeders, super seeders, balers and mulchers. The expenses will be met through the Rashtriya Krishi Vikas Yojana (RKVY), for which the government has earmarked an outlay of ₹8,550 crore for FY27, higher than the revised estimate of ₹7,000 crore for FY26.
Queries sent on Friday to the secretaries of the department of expenditure and the department of agriculture, as well as to the spokespersons of the finance and agriculture ministries remained unanswered.
India has around 146.45 million operational agricultural holdings, according to the Agriculture Census 2015-16. Of these, nearly 126 million, or about 86% of the total, belong to small and marginal farmers with landholdings below two hectares.
India has around 141 million hectares of net sown area and nearly 180 million hectares of agricultural land, making it one of the world's largest farming economies.
"Under the scheme, support will be provided for modern farm equipment, including agricultural drones, laser land levellers, precision seed drills, paddy transplanters, combine harvesters and crop residue management machinery such as happy seeders and balers," said the second official.
Agricultural economists said that wider access to modern farm machinery could play an important role in improving productivity and lowering cultivation costs, particularly for small and marginal farmers who often lack the resources to invest in equipment on their own.
“Greater investment in modern farm equipment can help improve productivity, reduce cultivation costs and enhance resource-use efficiency. The focus should be on making modern machinery affordable and accessible to small and marginal farmers, who often face barriers to adoption due to high upfront costs," said Rakesh Arrawatia, professor at the Institute of Rural Management Anand (IRMA) and dean, School of Cooperative Banking and Finance.
Industry demand
Industry representatives said that the allocation would help accelerate mechanisation, although India continues to lag behind developed economies in the use of farm machinery and requires sustained policy support to bridge the gap.
"The government should further strengthen budgetary support for farm mechanisation, as mechanisation levels in India continue to lag behind those in developed economies. This is particularly important in the context of growing labour shortages in the agricultural sector," said Upkar Singh Ahuja, president of the Chamber of Industrial and Commercial Undertakings (CICU) and a farm machinery manufacturer.
Farmer groups, however, said that while the scheme could improve access to machinery, its coverage remains limited relative to the country's vast farming population and requires stronger monitoring to ensure that the support reaches the intended beneficiaries.
"Agriculture has become increasingly machine-intensive, making subsidies and financial support essential for wider adoption of farm mechanisation. However, the current target is too small compared to the vast number of farmers in the country,” said Dharmendra Malik, national spokesperson, Bharatiya Kisan Union (Arajnaitik).
"There should be stricter monitoring to ensure that subsidised machinery benefits the intended farmers rather than being controlled by a select few who earn rental income from other farmers. In addition, small and marginal farmers need greater access to 35–40 HP (horsepower) tractors and other small farm equipment under the subsidy scheme to improve its reach and effectiveness," said Malik.