Budget 2024: The agri-sector requires substantial funding to make it more conducive for innovation and solution-based practices geared towards sustainability
India's agricultural sector is, arguably, the livewire of the Indian economy, employing more than 60 percent of the nation's labour force and contributing 18 percent to its GDP. This important source of livelihood has grown in leaps and bounds in recent years, becoming one of the world's biggest exporters of such crops as wheat, rice, sugar, milk, cotton, and horticulture, with cereals accounting for almost half of its market.
Despite this commendable feat, there is so much room for improvement, especially in the areas of improving yield per hectare by cutting down losses due to pests and diseases using integrated pest management, as well as the adoption of innovations and technologies that will enhance productivity and boost yield. Although the Indian government has continued to show commitment to ensuring food security through various initiatives, expectations are high for the coming fiscal year.
In the 2023–24 budget, for instance, the term "agri-tech" was mentioned for the first time, with provisions including the Agriculture Accelerator Fund to promote agri-startups, increased emphasis on digital payments through a digital agricultural infrastructure scheme, and providing computerisation for about 63,000 agri-credit societies worth around Rs 2,516 crore. Nonetheless, there are indications that a lot more will be done through the coming budget to enhance tech adoption in agriculture.
Incentives for enhancing farmer returns
Topmost on the minds of agricultural experts is the need for the government to substantially increase the Minimum Support Price (MSP), the subsidy offered to farmers for selling certain commodities. A boost is necessary to provide sufficient revenues to farmers, who may in turn invest such funds in technological input. After all, the major stumbling block to improved agri-tech across many farms is the lack of access to finance.
Beyond the MSP, which should get a boost in the budget and in turn trigger increased demand for agri-tech products, there are expectations for increased funding and incentives towards research and development in the sector. Increased funding to agri-research institutes, the establishment and/or retooling of specialised laboratories and agricultural institutes, as well as boosting efficiency in genome and pest-resistant seed research, are required to trigger growth in the sector.
What 2024 holds for agri-tech in India
The world is already moving towards a digital revolution in the agricultural industry, and India doesn't intend to be left behind. In recent years, there has been increased penetration of artificial intelligence (AI) and machine learning (ML) in agricultural practices. Notably, this is helping with precision farming, which enhances activities like mapping, spraying, crop scouting, livestock monitoring, and variable rate application (VRA), among others.
Specifically, the use of drones is being largely encouraged, and agripreneurs expect to see more investments in this regard. The Kisan Drone Scheme, introduced in 2023, is a notable initiative that offers subsidies to farmers to promote innovation and growth across farms in India.
The Central Sector Scheme introduced by the Union Cabinet last year will run from 2024 to 2026 and provide drones to 15,000 women in self-help groups (SHGs) to offer them on a rental basis to farmers. Increasing allocations to the programmes will go a long way towards enhancing tech adoption on farms.
Other expectations for the 2024 budget include increased investments in predictive and detective technologies such as sensors to detect the movement of pests as well as the overall condition of the crops and act proactively to prevent losses. Data analytics, the Internet of Things (IoT), automation, robotics, etc. are other tools that should be paid close attention in the delivery of the budget so as to put India on the path of agritech prosperity.
Building resilience for agri-tech penetration
Furthermore, the agri sector requires substantial funding to make it more conducive for innovation and solution-based practices geared towards sustainability. Closely linked to this is the need to make provisions for the introduction of schemes that offer financial and infrastructural support. These can be targeted at both farmers and manufacturers of agricultural products, so as to encourage the latter to cut down prices and make it easier for farmers to buy them.
Relatedly, the proposed launch of the Tur Dal Procurement Portal holds a lot of promise for the sector. The portal is expected to streamline the entire procurement process. Product offerings must therefore match the needs of turdal cultivation, which becomes imperative in light of such strides.
More so, there are high hopes that the Union Budget will introduce a crop diversification programme, which boosts resilience and opens up a spectrum of pest challenges that will necessitate a range of solutions, creating new markets for agri-tech producers and promoting growth.
Also highly anticipated is the successful implementation of the PM-AASHA initiative, a farmer income protection scheme introduced by the government. By dedicating the required revenues for its full execution, the scheme has the potential to stabilise farmers' incomes and offer them the wherewithal to purchase crucial agricultural products.
Towards a more profitable and sustainable agri-sector
India's mission to attain food security and become the world's biggest food supplier is attainable, and the 2024 Union Budget is a good place to start in order to consolidate on the gains of the past and block existing loopholes.
Indeed, the agricultural community looks forward to measures that not only address immediate concerns but also lay the groundwork for a sustainable and technologically advanced farming landscape. This is the only way to secure India today and for future generations.
(Rajesh Aggarwal, Managing Director, Insecticides (India) Limited)