A new compost subsidy scheme aims to bolster India’s rural economy by promoting sustainable farming. Offering financial aid to farmers for organic compost production, it seeks to enhance soil health, reduce chemical fertilizer use, and create rural jobs. With a focus on eco-friendly practices, the initiative supports small farmers, ensuring higher yields and economic resilience.
Government Launches Compost Subsidy to Empower Rural Farmers
In a significant move to strengthen India’s rural economy, the government has introduced a new compost subsidy scheme targeting small and marginal farmers. Announced in June 2025, the initiative aims to promote organic farming by providing financial assistance for compost production, aligning with India’s broader goals of sustainability and agricultural resilience. The scheme is part of a larger strategy to reduce dependency on chemical fertilizers, improve soil health, and create employment opportunities in rural areas.
Under the scheme, farmers will receive subsidies covering up to 50% of the cost of setting up composting units, including infrastructure for vermicomposting and bio-waste processing. The government has allocated ₹500 crore for the initial phase, targeting 10 lakh farmers across states like Uttar Pradesh, Bihar, and Rajasthan. The subsidy will be disbursed through Direct Benefit Transfer (DBT), ensuring transparency and timely support. Farmers with landholdings of less than two hectares are prioritized, addressing the needs of small and marginal farmers who form the backbone of India’s agrarian economy.
The initiative also includes training programs to educate farmers on modern composting techniques. Agricultural extension officers will conduct workshops in collaboration with local cooperatives, focusing on producing high-quality organic compost from crop residue and livestock waste. This move is expected to reduce the environmental impact of stubble burning, a persistent issue in states like Punjab and Haryana, where air pollution from crop residue burning has been a growing concern.
Experts highlight that the scheme could transform rural economies by creating a circular economy model. By converting agricultural waste into compost, farmers can reduce input costs while generating additional income through the sale of surplus compost. “This is a game-changer for rural India. It not only promotes sustainable farming but also creates jobs in compost production and supply chains,” said Dr. Rakesh Arrawatia, a professor at the Institute of Rural Management Anand (IRMA).
The scheme complements existing agricultural programs like the Rashtriya Krishi Vikas Yojana (RKVY) and the Sub-Mission on Agricultural Mechanization (SMAM), which provide subsidies for farm equipment and infrastructure. By integrating compost production into these frameworks, the government aims to enhance productivity in low-performing districts, particularly in eastern India. The initiative also aligns with the Prime Minister Dhan-Dhaanya Krishi Yojana, which focuses on boosting productivity for 17 million farmers through credit, irrigation, and crop diversification.
In regions like Thiruvananthapuram, similar efforts are underway to promote rapid composting of organic waste. The Thiruvananthapuram Corporation has implemented projects using aerobic bins and black soldier fly technology, increasing compost output by up to five times. Such innovations could serve as a model for the national scheme, ensuring scalability and efficiency.
The compost subsidy scheme also addresses India’s dependency on imported fertilizers, which has strained farmers due to supply disruptions from countries like China. With 80% of specialty fertilizers imported, the push for organic compost reduces reliance on volatile global markets, offering farmers a cost-effective alternative.
Rural women and youth are expected to benefit significantly, with the scheme encouraging their participation in compost production units. Pilot programs in states like Uttarakhand have shown success in training women to manage supply chains and operate composting machinery, fostering economic empowerment.
However, challenges remain. Farmers face upfront costs for composting infrastructure, and limited access to training could hinder adoption. Experts suggest that the government should streamline subsidy disbursal and expand outreach to ensure last-mile connectivity. “The success of this scheme depends on robust implementation and awareness at the grassroots level,” noted an agriculture ministry official.
By fostering sustainable practices and economic opportunities, the compost subsidy scheme marks a pivotal step toward a resilient rural economy, empowering farmers to thrive in an era of climate challenges and market uncertainties.
Disclaimer: This article is based on recent news reports, government announcements, and expert opinions sourced from publicly available information. The data and projections are subject to change based on policy updates and implementation outcomes. Readers are advised to verify details with official government sources.