Investment Support schemes versus Price Support schemes in Indian Agriculture: An Empirical Study of Telangana’s Rythu Bandhu Scheme

Abstract

Indian agriculture employs two major policy instruments to support farmers: investment support (pre-season cash assistance for cultivation inputs) and price support (Minimum Support Price—MSP—and procurement). This study compares farmers' perceptions of these two mechanisms in Telangana using secondary official statistics and primary perception survey data collected during 2024–25. Telangana's investment support model—Rythu Bandhu—expanded substantially from ₹10,486 crore in 2018–19 to ₹14,743 crore in 2022–23, reaching ₹16,892 crore in 2024–25, with ₹81,548 crore cumulatively disbursed over eleven seasons i.e., 2018–19 to 2024–25, benefiting predominantly marginal 73.63% and small 17.70% landholders. Kharif 2024 and Rabi 2024–25 coverage expanded to 182 lakh acres, disbursing ₹8,946 crore combined, reaching approximately 72 lakh eligible farmers. In price support, MSP for paddy increased progressively from ₹2,040/quintal in 2022–23 to ₹2,183/quintal in 2023–24 to ₹2,320/quintal in 2024–25, with national procurement operations generating ₹1,89,745 crore MSP payments in 2024–25 benefiting 1,28,54,267 farmers. State-level paddy procurement in Telangana reached 3.2 million tonnes in 2024–25, up from 2.8 million tonnes in 2023–24. Analysis of 100 surveyed farmers indicates statistically significant differences in perception ratings between the two schemes. The study recommends strengthening procurement infrastructure in marginal farmer clusters, digitizing Rythu Bandhu delivery mechanisms, and integrating both schemes through real-time farmer information systems for enhanced welfare targeting.