Financial Assistance for Procurement of Agriculture Machinery and Equipment

Indian government provides financial assistance for procurement of agriculture machinery and equipment to aid its farmers. Considering the dire need, financial assistance is available all across the country. Similarly, the government initiated the Sub Mission on Agricultural Mechanization (SMAM) with the same intention. Consequently, put into force, SMAM in all the states to aid agricultural adaption of modern machines. Thereby, encourages the inculcating of farm machines to enhance food productivity.

Need for Financial Assistance in Agriculture Machines  

With the ever-growing population, the necessity to increase food production follows. However, the agricultural land available is marginally insignificant against the demand. Further on, India with 17% human and 15% livestock of the world is in a state of tumult. Thus, the nation must adapt to every resource to step out of misery. Accordingly, machinery is one of the possible solutions that help increase harvest with effective filed work. Besides, several eastern and North- East region accounts for lower farm power against few states like Punjab, Haryana, western Uttar Pradesh, and Rajasthan. Thus, it is necessary to encourage farm machines in all stated in conceivable ways.

Objectives of Financial Assistance for Procurement of Agriculture Machinery and Equipment

The sub mission is a combination of several ongoing activities such as Promotion and  

Strengthening of agricultural mechanization, Post-Harvest Technology, and management. Besides, other schemes like RKVY, MIDH, NMOOP, SMAM are promoting agriculture with the same objectives.

  1. Spreading awareness regarding the use of machines in the agricultural sector
  2. Encourage the small and marginal farmers to purchase the necessary resources and equipment
  3. Reach out to cultivators from regions with low farm power and urge their production
  4. To promote Custom Hiring Centres
  5. Create hubs for valued and modern farm machinery
  6. Highlighting the importance of stockholders (by capacity enhancing activities)
  7. Facilitate the use of testing centers to ensure performance and attain certification
Structural Components of Financial Assistance for Procurement of Agriculture Machinery and Equipment

To accomplish the said vision, the mission undertakes the following activities:

  1. Workshops to train in farm machine specialization at FMTTI, SAUs and CSIR institutes
  2. Conduct on-field and off-field demonstration to attract and retain the stakeholders
  3. Facilitate the procurement of machines via financial aid
  4. Additional encouragement to small and marginal farmers
Salient Components of Financial Assistance for Procurement of Agriculture Machinery and Equipment
  1. Upgrade and firming up of Agricultural Mechanization via providing exclusive training, workshops, and equipment testing.
  2. Post-Harvest Technology and Management through PHT establishments
  3. Financial Assistance for Procurement of Agriculture Machinery and Equipment
  4. Initiate farm machinery banks (Customs hiring)
  5. Aid financially to promote mechanized techniques
Structure of Financial Assistance for Procurement of Agriculture Machinery and Equipment
1. National Level 

At the national level, the mission will work under the National Steering Committee (NSC) monitored by the Chairmanship of Secretary (AC&FW). Additionally, will contain a Secretary and financial advisor (DAC&FW). Further, a joint secretary from RKVY, MIDH, Crops, and M&T. Also, DDG ICAR, Commissioner of Agriculture, Commissioner of Horticulture, ADC, DC, and Farm Machinery Training and Testing Institute’s Director will be a part of NSC.

2. Executive Committee

Here, the additional Secretary (M&T) shall be the Chairman and the Joint Secretary (M&T), DAC&FW shall act as a member secretary. Further, ADG, ICAR, ADC (M&T), ADC (Crops), ADC (Horticulture), DC (M&T), CFMTTI Bundi will act as expert members. Additionally, the M&T segment of DAC&FW provides all the necessary technical support to the committee to perform its functions.

Roles of Executive Committee 
  • Has to monitor and approve the plan of action
  • Will have the power to relocate resources depending on the requirements and funds. However, can perform this right only by attaining pre-approval from EFC/ CCEA.
  • Is in charge of approving special interventions and also maintaining the harmony between the agencies.
  • Can include and delete any machinery or resources in the list that get financial aid.
State Level 

The Principal secretary or the Agricultural Production commissioner will be the chairman. Further, the directors would be Member Secretary and representatives from SAU, ICAR or similar institutes will be expert members. Accordingly, the most important function is to check the annual plan of the year. Following the State nodal department completion of the plan, their work begins. Additionally, lends hand to the executive committee.

4. District Level

The collector will be the chairman, while the director will be a member secretary. Further, the district officer will act as a Co-member secretary. Finally, the representatives from the institutes will function as expert members. Consecutively, help in carrying forward the vision of the sub mission.

5. Panchayati Raj Institutions 

All the nodal agencies will take part in this to aid in the implementation of the sub mission scheme. Further, they are the local bodies ensuring the obedience of the plan

Protocol for Approval of the Fund 

Initial AAP submission, following approval from SLEC. DAC and FW will allocate the funds to acceptance of the plan. However, 50% would be for small and marginal farmers. Further, the funds are based on Rule 238 of GRFs. 2017 from state or implementing agencies. Following the release of 1st installment and submission of all the document 2nd installment will be released.


Monitoring will be by all the nodal agencies at the national, state, and district levels. Consequently, impact assessment, evaluation and report generation are part of the scheme. Subsequently, the mission believes a positive outcome that is the enhancement of farm mechanization.

1. For components of the Central Sector 
Implementing Agencies 
  1. Training-  Farm Machinery Training and Testing Institutes, State institutes, ICAR, ATMA, and National Innovation Foundation (NIF)
  2. Testing-  Farm Machinery Training and Testing Institutes, State testing centers, ICAR, and government institutes 
  3. Demonstrations-  Farm Machinery Training and Testing Institutes, State Government, ICAR, ATMA, PSUs, and NIF
  4. PHT establishment- State government
Functions of the Agencies 

Prepare an annual plan of action for training, testing, and demonstrations (Annexure-VII) respectively. And submit it to M&T under DAC&FW for EC approval. Additionally, they will also include post-harvest training and management as per AAP guidelines.

2. For Training 

Implementing agencies will be the same as the central sector. Further, the annual calendar depicting all the training will be in the Annexure-IV- A and B format. Moreover, the beneficiaries will be farmers, members of SHG, FPO, rural youth, and so on that require the exposure. Furthermore, the course will cover certain expenses like

  1. Boarding charges
  2. Traveling charges
  3. Institutional Charges

Note that, the charges vary depending on the institute as well as the applicant. However, a common limit is set and over that financial aid will not be offered.

3. Testing 

Implementing agencies–  Farm Machinery Training and Testing Institutes, State testing centers, ICAR, and government institutes. Further, here the beneficiaries are manufacturers of agricultural machines, applicants of agricultural machines, and R and D institutions associated with farm machines. Following that, a standard is set to understand the testing and they monitor the machines for proper functioning. Additionally, the nature of financial assistance is Rs 1.5 crore (one grant) to the institute.

4. Demonstration
  • To demonstrate the cropping system approach in mechanization in large scale
  • Showcase new and modern machine and their uses
  • Custom hiring centers in all districts 

The beneficiaries would be farmers, SHG, cooperative societies, youths, etc.

Nature of Assistance

The government will provide full assistance for demonstration however the equipment will be rental form the custom hiring centers. Accordingly, Rs 2000 per operation, Rs 1500 for training, and Rs 500 for extra expenditure are given. Besides, the agencies will facilitate for the extra charges crossing the limit.

5. Post-harvest technology

State government alone acts as the implementing agency. Further, the training is offered by CIPHET Ludhiana, ICAR, CSIR, and SAU units. Thus, the establishments may be involved in

  1. Processing
  2. Managing by-product
  3. Scientific storage (Low cost)
  4. Transit storage

The beneficiaries will primarily be farmers, SHG, cooperative societies, youths, etc

Nature of Assistance 

50% assistance for the establishment of PHT units with a limit to Rs 1.25 lakhs per machine. However, 10% extra aid for special categories (SC/ST, women, East and north eat region) establishments.

Interventions under Schemes that are Sponsored by the Centre
1. Financial Assistance for Procurement of Agriculture Machinery and Equipment 

Here, the implementing agency is the state government that will provide financial assistance to every beneficiary. Nonetheless, the district nodal agencies will select the beneficiaries. Further, the State Department of Agriculture will monitor the activity of the scheme.

2. Farm Machinery Banks for Customs Hiring 

The state government, NCDC, PSUs, GoI and its organization will act as the implanting agencies. Additionally, their vision is to improve mechanization and to provide ample hiring services to achieve the same. Additionally, to inculcate all the new, modern techniques and machines in agriculture. Accordingly, the AAP will establish custom hiring centers in each district. Consequently, the main focus is on entrepreneurs as beneficiaries. Further, the financial assistance is in accordance with Annexure-II (d) and will be 40% of the cost.

3. Hi-Tech, High Productive Equipment Hub for Custom Hiring 

The same implementing agencies, as the same agenda follows. However, this is to ensure that hubs are present in every district offering the right exposure and encouragement. The financial aid will be covered in Annexure-II (e) and will cover 40% of the cost.

4. Promoting Farm Mechanization in Villages, and Northeast regions

NSDC, NER government, and State government will be in charge of this segment. Precisely, the aim is to encourage farm mechanization. Thus, the agencies will promote the usage of the same while demonstrating their importance. Accordingly, the financial assistance is allotted to establish machinery banks is Rs 10 lakhs. However, the assistance for NER varies and is specified in annexure II (h). Further, the district offices monitor the scheme.

5. SMAM- A Unit to Monitor SMAM is CPMU

A project management team is set up which will involve the joint secretary (M&T). Similarly, will contain expert member from institutes and member secretaries. Following the composition of the committee, the roles will be as follows:

  1. Help to conduct capacity developing activities
  2. Assist in technical and financial matters
  3. Guidance after each evaluation
  4. Encourage campaigns to promote farm mechanization

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