Subsidies in agriculture are delivered with different purposes, such as increasing monetary revenues, improving productivity, stabilizing prices, and conserving the environment. Witness testimonies indicate that agricultural subsidies are often ineffective in practice due to their negative consequences, like an increase in agricultural input use, degradation of natural resources, decrease in productivity, and addition in costs. The Iranian government has initiated the implementation of a new transformation scheme known as the targeting subsidy plan. In this regard, the study on the impact of such a scheme on farmers’ input use behavior is still inadequate and research should be conducted to fill this knowledge gap. Therefore, this study investigates the impact of the targeting subsidy plan on farmers’ input use behavior. Using archival and library resources, we reviewed recent papers on the impact of such a scheme on farmers’ input use behavior. The reviewed papers include topics such as the definition of subsidy, types of subsidies, agricultural subsidies, the targeting subsidy plan, and the input use behavior of the farmers. Most of the research in this area concludes that the targeting subsidy plan—in the form of the either eliminating or targeting—has substantially influenced farmers’ behavior and altered the way in which farmers use agricultural inputs. Although the social impacts of such a scheme are still ambiguous in the rural areas of Iran, the paper serves as a reference for researchers who would work in the field of subsidy.
