Farm Machinery Bank Scheme

Farm Machinery Bank Scheme: Subsidy, Eligibility and Application Process

Owning expensive farm machinery like tractors, rotavators, seed drills, and harvesters is out of reach for most small and marginal farmers in India, who make up over 85% of the farming community. To solve this problem, the Government of India runs the Farm Machinery Bank (FMB) Scheme under the Sub-Mission on Agricultural Mechanization (SMAM), enabling groups of farmers to collectively own and share a full set of modern equipment at a fraction of the individual cost. This article covers everything you need to know about the scheme — subsidy amount, eligibility, documents, and how to apply.

What Is the Farm Machinery Bank Scheme?

A Farm Machinery Bank is a village-level facility set up under SMAM where a group of farmers, a Self-Help Group (SHG), a Farmer Producer Organisation (FPO), a cooperative society, or a panchayat collectively owns a range of agricultural machinery. Instead of individual farmers buying costly equipment they may use for only a few days a year, the machinery bank allows the whole village to access tractors, tillers, seed drills, sprayers, and harvesters on a shared or rental basis, dramatically reducing the cost of cultivation.

This is different from a Custom Hiring Centre (CHC), which is typically run as a rental business by an individual entrepreneur or group; a Farm Machinery Bank is more community-owned and is especially promoted in low-mechanization states and villages.

Objectives of the Farm Machinery Bank Scheme

• Improve access to modern farm machinery for small and marginal farmers
• Reduce the individual cost burden of owning agricultural equipment
• Increase farm mechanization levels in low farm-power regions
• Reduce cultivation costs and improve timeliness of operations like sowing and harvesting
• Create shared community assets that benefit an entire village

Subsidy Structure Under the Farm Machinery Bank Scheme

The Farm Machinery Bank component under SMAM typically provides:

Note: Exact subsidy percentages and caps vary by state, applicant category, and the specific machinery package chosen. States like Haryana, for example, publish their own FMB and CHC subsidy caps separately. Always confirm the current rate on your state’s agriculture department portal or the official SMAM application tracking site (agrimachinery.nic.in) before applying.

Eligibility for the Farm Machinery Bank Scheme

The scheme is designed to benefit groups rather than individuals. Eligible applicants generally include:

1. Self-Help Groups (SHGs)
2. Farmer Producer Organisations (FPOs)
3. Cooperative societies
4. Registered farmer groups or user groups
5. Gram panchayats (in select village-level implementations)
6. Priority is given to villages in low farm-power/low-mechanization regions
7. Small and marginal farmers, women farmers, and SC/ST farmers within these groups receive preference
8. Applicants who have not already availed a similar subsidy from another central scheme are generally preferred

Documents Required

• Aadhaar card of the group’s authorized representative/members
• Group registration certificate (SHG/FPO/cooperative registration proof)
• Bank account details of the group (for Direct Benefit Transfer)
• Land ownership or land-use proof, where applicable
• List of member farmers with landholding details
• Project proposal/quotation for the machinery to be purchased
• Caste certificate (for SC/ST category benefits, if applicable)
• Photographs of proposed site/shed for machinery storage (in some states)

How to Apply for the Farm Machinery Bank Scheme

1. Visit the official SMAM portal at agrimachinery.nic.in or your state’s agriculture department DBT portal (for example, MahaDBT in Maharashtra).
2. Register the group/entity and complete the required KYC using Aadhaar.
3. Select the “Farm Machinery Bank” component under the mechanization scheme list.
4. Fill in group details, proposed machinery list, and project cost estimate.
5. Upload all required documents in the prescribed format.
6. Submit the application in one sitting, as most portals do not allow saving a partially filled form.
7. Track your application status anytime at agrimachinery.nic.in under “Application Tracking.”
8. On approval, the subsidy is transferred directly to the group’s bank account after machinery purchase and verification.

Benefits of the Farm Machinery Bank Scheme

• Reduces per-hectare cultivation cost by an estimated 15-30% in well-mechanized areas
• Gives small and marginal farmers access to machinery they could never afford individually
• Improves timeliness of critical operations like sowing, spraying, and harvesting
• Creates a shared, community-owned asset that benefits multiple households
• Supports rural employment through machine operation and maintenance work
• Encourages the use of performance-certified, quality-tested equipment

Challenges and Limitations

• Approval and disbursement can take time depending on state processing
• Subsidy caps and percentages differ significantly across states, causing confusion
• Group-based ownership requires proper coordination and a fair usage/scheduling system among members
• Maintenance and repair costs must be managed collectively, which can be a challenge without clear rules

Tips for Farmer Groups Applying

1. Check your state’s specific FMB subsidy cap and guidelines before finalizing your machinery list, since amounts vary by state.
2. Choose machinery that suits your region’s dominant crops and cropping pattern for maximum utilization.
3. Set up a clear usage schedule and fee structure among group members from day one to avoid disputes.
4. Keep all group registration and KYC documents updated and ready before applying.
5. Apply only through the official government portal and never pay any unofficial “processing fee” to agents.

Frequently Asked Questions (FAQ)

Q1: What is the difference between a Farm Machinery Bank and a Custom Hiring Centre? A: A Farm Machinery Bank is typically a community/group-owned facility with a higher subsidy (up to 80%), while a Custom Hiring Centre is usually run as a rental business by an individual entrepreneur or group with a comparatively lower subsidy rate (40-50%).

Q2: How much subsidy is available under the Farm Machinery Bank scheme? A: Subsidy can go up to 80% of the project cost, subject to a state-specific cap that is commonly around ₹8 lakh per bank, though this can vary.

Q3: Can individual farmers apply for this scheme? A: The Farm Machinery Bank scheme is primarily designed for groups — SHGs, FPOs, cooperatives, or registered farmer groups — rather than individual applicants.

Q4: Where can I apply for the Farm Machinery Bank scheme? A: Applications are submitted through the official SMAM portal (agrimachinery.nic.in) or your state’s agricultural DBT portal.

Disclaimer: Subsidy percentages, caps, and eligibility criteria for the Farm Machinery Bank scheme vary by state and are revised periodically. Please verify the latest guidelines with your state agriculture department or the official SMAM portal before applying.

This article was prepared by the krushitools.com team to help farmers and farmer groups make informed decisions.