Farmers Can Get Up to 80% Subsidy on Agricultural Machinery: Know How to Avail the Benefit

Farmers Can Get Up to 80% Subsidy on Agricultural Machinery: Guide

The Government has promoted farm mechanisation by offering subsidies to farmers, and they have been receiving a growing push to invest in modern farming equipment. Under the Sub-Mission on Agricultural Mechanisation (SMAM), financial assistance is available for purchasing agricultural machinery as well as setting up Farm Machinery Banks and Custom Hiring Centres.

The subsidy is subject to 80% of the project cost for eligible Farm Machinery Banks; individual farmers can avail 40-50% subsidy depending on their categories and applicable scheme for purchasing agricultural machinery.

The government is promoting modern farm machines

Implementation of the SMAM scheme is being taken under the Rashtriya Krishi Vikas Yojana (RKVY) centrally sponsored scheme. It primarily aims to provide better access to modern farm machines – especially for small and marginal farmers who may not have the resources to afford such expensive agricultural machinery on their own.

The scheme covers various categories of agricultural mechanisation, such as modern farm equipment, precision agriculture, drones, and others. It also encourages Custom Hiring Centres and Farm Machinery Banks, enabling farmers to hire machines rather than buying all the machinery.

Agricultural machinery can be used to help farmers complete the agricultural operations of sowing, tillage, harvesting, and crop-residue management more efficiently. Mechanisation can also help farmers to avoid manual labour and undertake time-critical agricultural operations.

The 80% Subsidy is available for Farm Machinery Banks

The 80% subsidy will be especially significant for Farm Machinery Banks. Eligible FMB projects are eligible for financial assistance up to 80% of project cost, on applicable limits and conditions, as per the Ministry of Agriculture and Farmers Welfare.

The average amount of assistance available to individual farmers who buy the machine is 40-50% of the machine's value, depending on the type of beneficiary. Hence, farmers must not presume that every purchase is automatically eligible for an 80% subsidy.

Farm Machinery Banks can provide costly machines to a group of farmers. The machinery may also be rented to other farmers, providing another service and income stream for a farmer or group of farmers running the machinery bank. 16,227 Crop-Residue Machines are being sold in Pakistan, the majority of which are being purchased in Punjab. 

These machines are being encouraged to help manage crop residue and to reduce stubble burning. The use of the CRM machinery is linked to the overall agenda to address the needs of the farmers for mechanised solutions to the management of agricultural residues post-harvest.

The government has helped to support such machinery with subsidy programmes and has enabled farmers and organised groups to gain access to machinery which might otherwise be a substantial investment.

The farmer from Meerut has been given almost an 80% subsidy.

The impact of agricultural machinery subsidies on the operations of the farms can also be illustrated by a recent example from Meerut (UP), where a subsidy was given for agricultural machinery.

A report dated 22 September revealed that Mawana farmer Nand Kishore had purchased agricultural equipment to the tune of Rs. Under the Farm Machinery Bank scheme, 42 lakh has been availed. His tractor was a 75 horsepower unit, and he had a few up-to-date implements.

A project of about Rs. He reportedly got nearly 80% subsidy of Rs. 30 lakh. 24 lakh. The farmer reported that the machine saved approximately 50% of the time that was used for farm operations.

The machine can also be hired to other farmers, possibly generating other income streams from renting their machine.

Bihar Opens 2026–27 Farm Machinery Applications

There is also an active window of opportunity for the farmers and eligible groups of Bihar under the farm mechanisation schemes of the state for the year 2026-27.

Currently, the Bihar Agriculture Department's official Online Farm Mechanisation Application Software has the SMAM and the Custom Hiring Centre and Farm Machinery Bank schemes. The portal has announced an 80% subsidy up to Rs. for 2026-27. A total of Rs 8 lakh is available under the category of SMAM Farm Machinery Bank. It also provides the various assistance limits for the Custom Hiring Centres and Special Custom Hiring Centres.

Some of these programmes have the current application window on the official portal as September 8 – 30, 2026.

How Farmers Can Benefit

Farmers who are interested in the agricultural machinery subsidy should first find out about the subsidy program offered in their state and determine if they qualify. The percentage of subsidy, the maximum financial assistance and the type of machinery and the type of beneficiary may differ across programmes.

Before buying machinery, farmers should also go through the official agriculture department portal or the given method of the government. It is crucial to see the current guidelines, as the majority of subsidies are connected to certain types of beneficiaries or Farm Machinery Bank projects, not any single farm machinery purchase.

Farm mechanisation, when supported by the government, can help farmers save time, cut down labour needs and make use of costly farming machines. Meanwhile, the Farm Machinery Banks and Custom Hiring Centres can provide modern machinery to more farmers on a rental basis.