The protest near the D-Chowk was held ahead of the annual budget speech to be delivered by Finance Minister Ishaq Dar later in the day.
The protesters demanded the subsidies be increased to control prices of agricultural inputs and sought better prices for their crops.
All protests have been banned in the D-Chowk due to security situation and the protesters were warned before the use of force, a police official said.
The protesters had demanded that they be allowed to meet Prime Minister Nawaz Sharif and also raised slogans against him after police action.
Opposition leader in the National Assembly Syed Khurshid Shah arrived at the site of the protest shortly after it started to express solidarity withe the protesters.
"My Pakistan Peoples Party stands by you. We believe that Pakistan will only succeed when the poor man is well-fed and his children go to school," Shah said.
The government is planning to increase the defence budget but it is not known if any special package will be offered for the agriculture sector.
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