India's agriculture scheme opens wider: Why more startups can now tap into crucial farm incentives

The Union government plans to lower the minimum number of farmers required per project so more companies can qualify for subsidies or incentives under the government’s Public-Private Partnership for Integrated Agricultural Value Chain Development (PPPAVCD) scheme, two officials said.

A lower entry barrier will encourage more startups, agritech companies, farmer producer organisations (FPOs), and small agri-businesses to leverage the scheme, ultimately benefitting farmers, they said, declining to be identified.

The programme brings together 27 Central government schemes and is aimed at improving collaboration between FPOs, private companies, and government agencies.

Currently, for companies to be eligible for the scheme, each project should include a minimum of 500 farmers in the plains and 250 in the northeastern region and hilly states, capped at 10,000 farmers per project.

“We have observed that in the case of certain crops and spices such as ginger and turmeric, to get a cluster of 500 farmers in plains and 250 in hilly areas is very difficult. So we have proposed to reduce the farmers count for private players to avail government subsidies or incentives," one of the officials said.

Eight projects worth ₹200 crore have been approved for the agriculture incentive scheme this year. “Another 18 projects having a total project cost of around ₹2,500 crore have been submitted to us for approval and are under consideration," said the second official.

So far, the agriculture ministry has approved a proposal by Ninjacart (P) Ltd, an agri-supply chain platform, to develop a maize cluster in Uttar Pradesh at a total project cost of ₹120.7 crore, which will benefit around 10,000 farmers.

In Odisha, a turmeric value chain development by Heifer International (P) Ltd has been approved at a total project cost of ₹2.12 crore. It will benefit 1000 farmers. In Uttar Pradesh, a potato cluster by Agristo Masa (P) Ltd, involving 750 farmers and a total project cost of around ₹30 crore, has been approved.

“Individually, small farmers often lack bargaining power, but often managing a large number of farmers is also difficult. So, reducing the number of farmers would achieve economies of scale, reduce costs, and improve income and resilience," said Meharban Singh, president, Samana Farmers Vegetable Producer Co. Ltd, a Punjab-based farmer producer organisation.

Benefitting the small farmer

Private entities participating in the PPPAVCD scheme are expected to introduce modern technologies, enhance farming practices, provide quality seeds and agri-inputs, and guarantee buyback arrangements to the farmers.

A cluster of 500-10,000 farmers is being formed under the scheme.

“For decades, farmers have faced challenges like weak market linkages, fluctuating prices, and post-harvest losses. The initiative will help bridge those gaps by creating a strong connection between farmers, markets, and emerging agricultural solutions," said Preet Sandhuu, founder and managing director, AVPL International, a company specializing in drones for the agriculture sector.

“It will also open doors for startups and young entrepreneurs to actively participate in the agri-value chain, building a more connected and efficient ecosystem," Sandhuu said.

The PPPAVCD scheme accommodates both Central schemes (fully funded by the government of India) and Centrally sponsored schemes (jointly funded by the Centre and states). This flexibility ensures that a wide range of policy instruments and funding streams can be leveraged.

Sudhir Panwar, farm expert and a former member of the UP Planning Commission, however, sounded a word of caution.

The scheme “may result in squeezing farmers’ profit because of an asymmetrical position of bargaining if some benchmark price is not fixed for the crop. It may benefit farmers if competition is introduced at the aggregator or processor level", he said.

Agriculture and allied activities remain the primary source of livelihood for nearly 58% of India’s population. The sector is heavily dominated by small holding farmers—around 85% of farmers cultivate less than two hectares of land but collectively manage about 45% of India’s agricultural area.

Despite their critical role, the annual income of most farmers remains low, with limited access to technology, markets, and institutional support.

According to experts, the impact of the government’s marquee agriculture scheme will be far-reaching—ensuring farmers receive fair and stable prices, reducing crop losses, and improving rural employment.

The ministry of agriculture and farmers welfare did not reply to Mint’s queries.