Agriculture for a resilient future

The Union Budget 2024, presented by the government of India, is forward-looking and growth-oriented, prioritising the transformation of India’s agriculture industry as it laid out several strategic initiatives aimed at enhancing productivity, ensuring climate resilience, and fostering innovation in the agricultural sector. The government's commitment to integrating private sector expertise and fostering a collaborative approach towards agricultural innovation is timely and necessary.

Over the past two decades, the World Food Programme has noted that while per capita income more than tripled, the minimum dietary intake has declined. India houses a quarter of the world's undernourished population, positioning it as a critical area for global hunger alleviation efforts. In rural areas, per capita household consumption expenditure in 2023, adjusted for inflation, was ₹2,054 a month, with food accounting for about 46% of this spending. To address rising costs, the budget allocates significant resources to high-yield crop varieties, digital infrastructure, and efficient supply chains to boost rural incomes and reduce food costs, addressing food security challenges through strategic investments and policies.

Fostering a collaborative environment and paving the way for cutting-edge research and development can propel Indian agriculture into a new era of growth and sustainability. The introduction of 109 new high-yielding and climate-resilient varieties of 32 field and horticultural crops underscores government’s intent to provide farmers with the tools they need to adapt and thrive in an ever-changing environment. This initiative is critical as it addresses the dual challenges of enhancing productivity and building resilience against the climate crisis.

A standout feature of the budget is the introduction of digital public infrastructure for agriculture. By leveraging digital technology, farmers will be better equipped to make informed decisions, optimise resource use, and ultimately increase productivity. In partnership with states, the government aims to integrate six crore farmers and their land into a digital registry. The digital crop survey for kharif produce, which will be conducted among these farmers will provide valuable data that can be used to enhance crop management practices and ensure better yields. This initiative will increase transparency and democratise access to digital services, laying a strong foundation for precision agriculture. This could provide a feasible database for companies like FMC Corporation to launch precision agriculture solutions to help rationalize the input used in farming.

The integration of technology in agriculture is crucial for the sector's modernization and long-term sustainability. Notably, the Namo Drone Didi Scheme received ₹500 crore in allocations, under which women-led self-help groups (SHGs) can get benefitted from an 80% subsidy on drone purchases while the remaining cost can be covered through loans from the Agricultural Infrastructure Fund (AIF) at a nominal interest rate. SHGs can rent out these drones to offer services to farmers, potentially earning an extra ₹1 lakh annually. This gives one confidence that the government will continue to invest in building up the larger ecosystem for use of drones in agriculture.

The budget emphasises developing vegetable production clusters near consumption centres and promoting farmer producer organisations (FPOs), cooperatives, and startups - to create efficient supply chains, reduce wastage, and ensure timely delivery of fresh produce, benefiting both farmers and consumers. Support for these grassroots organisations fosters entrepreneurship and empowers farmers to manage their supply chains. Efforts will also be made to strengthen pulses and oilseeds production and establish large-scale vegetable production clusters near major consumption centres.

The government's increased focus on ease of doing business is evident with the introduction of the Jan Vishwas Bill 2.0--that aims to strengthen foreign direct investment (FDI) in agriculture and facilitate the modernisation of the sector through technology and research and development (R&D). Additionally, the proposed decriminalisation of minor offences in the Insecticides Act of 1968 is a welcome move that will further streamline regulatory processes and reduce bureaucratic hurdles.

The initiative to open 1,000 Industrial Training Institutes (ITIs) is another timely measure. These ITIs could play a crucial role in providing the necessary skills for the growing drone-led agricultural economy. By offering drone pilot training and maintenance courses, these centers could ensure that the agricultural sector has the skilled workforce needed to harness the potential of drone technology for precision farming and efficient resource management.

The budget allocates ₹1.5 lakh crore for agriculture and allied sectors, including an increase in funding for the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) scheme, which provides direct financial aid to farmers. This funding will support various initiatives aimed at achieving self-reliance in pulses and oilseeds and strengthening production, storage, and marketing infrastructure, demonstrating the government's commitment to improving productivity and resilience in agriculture. What might make this even more effective is to see a Samman Nidhi link with the adoption of newer technologies and inputs which will improve farm productivity.

Support for the agriculture-food-rural sector has largely concentrated on welfare measures and subsidies. Key components include food and fertilizer subsidies, alongside the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). While these measures aren't specifically managed by the agriculture ministry, they significantly benefit both farmers and consumers within the agri-food-rural sector. The agriculture ministry itself provides substantial income support through initiatives like PM-KISAN, credit subsidies, and PM-Fasal Bima Yojana. Overall, these welfare and subsidy efforts are projected to amount to ₹5.52 trillion for FY25, representing 11.5% of the total budget ( ₹48 trillion).

The Union Budget 2024 continues to aid the foundation for a resilient agricultural sector in India. With policies aimed at innovation, digital transformation, and supply chain improvement, the budget is set to improve farmer livelihoods and food security. Stakeholders should remain engaged in this transformative journey to support the government’s efforts in advancing climate-friendly agricultural practices. Together, we can ensure that Indian farmers thrive and agricultural productivity increases.

This article is authored by Ravi Annavarapu, president, FMC India and South-West Asia.