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Small farmers account for the bulk of the production of the three main agricultural export commodities, Rajapaksa, who is also finance minister, told parliament while presenting the budget for 2013.
The replanting subsidy for tea small holders will be increased to 350,000 rupees per hectare from next year from 300,000 rupees.
The subsidy for new planting will be increased to 250,000 rupees from 150,000 rupees per hectare, Rajapaksa said.
The government will also allocate 100 million rupees to help small farmers buy equipment for mechanised harvesting to raise their yields, he said.
The move comes in the wake of labour shortages faced by the island's agriculture sector.
Small farmers cultivating 2-5 acres of rubber will be given free plants to encourage more production, with rubber-based industries resorting to raw rubber imports owing to insufficient local output.
Coconut farmers with up to five acres who have been affected by drought and disease will be given free plants,