As record-breaking temperatures, heatwaves, and the onslaught of rainstorms welcome the Budget for 2024-25, debt-laden Indian farmers extend surmounting pressure on the Government for support for their woes.

With 65 per cent of the country’s agricultural land dependent on the erratic monsoons, shrinking water supplies and inflated input costs find farmers scrambling to adapt to the impacts of climate change. Reports state that every 1°C temperature increment deals a 4-5 million tonne blow to agricultural production (ICAR).

With up to 80 per cent of marginal farmers suffering crop damage and losses, climate threats like drought (41 per cent), erratic rainfall (32 per cent), and delayed monsoons (24 per cent) emerge as primary sources of concern for farmers. 

While the downtrend of the agriculture and allied sectors highlights insufficiencies in public investment policy, it fails to underline repercussions that permeate through the value chain, endangering the food security of a 142 crore population.

A week’s deviation in rainfall from a planned crop cycle causes an entire season’s crop failure, pushing the country’s agricultural GDP lower by 5 per cent.

A critical examination reveals the need for a fresh perspective on investment allocation, with a nuanced understanding of climate change’s impact on agricultural ecosystems. While public demand for increased agrarian funding signifies immediate relief, it may fail to yield sustainable results.

The scheduled budget holds significant importance as analysts expect a portfolio of interventions at the crossroads of infrastructure and technological innovation. Primus Partners proposes the following perspectives:

Funds for research

The government must channel funds into promoting research and adaptation of climate-resilient seeds and technologies.

Sponsoring private study, the establishment of public institutes in farmer-intensive areas, increasing allocation to established agencies like ICAR, the introduction of relevant modules in universities, and establishing knowledge centers at grassroots levels are key initiatives that may be adapted.

The budget must pave the way in providing public support and investment in the agtech innovation potential of India’s start-up ecosystem. Identification of avenues of incremental income must be supported by market regulation mechanisms and encouraging private participation.

Emphasis on sustainable methods like solar farm development on agricultural land, carbon credit mechanisms, etc. can boost agricultural income and unlock untapped avenues of growth like rent.   

Indoor farming is emerging as an attractive alternative in urban areas, allowing for the cultivation of premium-priced products while reducing dependency on external weather patterns; hiking demand, average yields, and income per hectare. 

Community-driven initiatives like Farmer Producer Organizations at a cluster village level can serve as critical platforms for large-scale adoption of indoor farming.

However, successful implementation in remote villages requires government support in funding capex requirements and establishing market linkages to facilitate demand.   

While 21 per cent of farmers have access to storage facilities, only 15 per cent have used warehousing facilities unhindered by challenges such as small land holdings, lack of credit, or physical resources.

Prioritisation of strengthening value chain infrastructure by funding cluster units for food processing, post-harvesting warehousing, cooling, and grading centres near farms and collection centres is instrumental in minimising the annual ₹1.5 trillion post-harvest losses (equivalent to 2.35 per cent of the nation’s GDP.  

Adopting new direction

Recent years have seen the government adopt a new direction in supporting farmers in attaining competitive pricing, through digitizing markets and providing better trade platforms.

Initiatives like eNAM have revolutionised the fabric of trading by sensitizing and creating awareness among farmers, FPOs, traders, commission agents, etc.

With studies evidencing digital platforms’ potential to increase farmers’ income by up to 20-25 per cent, the market is seeing a surge in private sector participation.

While digital platforms currently host only 30 per cent of all agricultural transactions, demarcating a long journey towards an end-to-end successful model; innovation to differentiate and build traction to attain newer investments is at an all-time high.   

However, the real value lies in strengthening the links to this value chain through technological interventions from farm to fork.

Investment in the implementation of precision farming techniques and automated systems for assaying, sorting, grading, and storage (e.g. digitizing weighing machines for transparent transactions and AI-based assaying equipments utilized in some of the eNAM mandis) is instrumental in reducing post-harvest losses and increasing the overall marketable surplus of farmers and enabling them to demand higher prices.   

The proposed Budget interventions must emphasise a sustainable perspective to supporting farmer ecosystems through the development of robust value chains, improving access to quality inputs backed by funding innovation in technological instruments and infrastructure development.

Prioritizing continued investment in key focus areas is imperative to creating a resilient economy for India.  

The author is Managing Director at Primus Partners  

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