Now to the question about if it were to be in a situation of bitcoin while the amount cannot be recovered like the way they can from bank accounts but that would not have been needed in the first place because on the blockchain, everyone can see the source of the money and where its going to settle and whoever or whatever its being used for. In that case, on verifying the identity of the farmer and establishing their wallet addresses then it can go directly to their wallets and except the sender moves it to another account, we all know its not reversible which narrow down the culprits.
First of all I don't think that in a country like India where the status of Cryptocurrencies is still unclear, Bitcoin transactions will be used to transfer funds for farmers and if in future the government decides to do it then it will be possible for them.The reason is the lack of knowledge about Bitcoin and Crypto wallets. Here many farmers are still not having a bank account and those who are having are struggling to use it. In these type of situations it will be very difficult for the government to teach them about the working of wallets.They will easily lose their private keys and the money they received.