Since the ninth Five Year Plan, the government has been setting a target of 4 per cent annual growth for the agricultural sector. But it remained elusive. The growth remained only around 3 per cent. It is in the past seven years that the agricultural sector witnessed a growth of about 5 per cent because of the government’s forward-looking policies and higher investment.

Recognising the current and future challenges to sustainable development of agriculture, the Budget has provided for ₹1,51,851 crore, including ₹7,138 crore for animal husbandry, dairying and fisheries. This is 8.05 per cent higher than the expenditure made in 2023-24. The government’s effort to promote diversification into allied activities is visible from the larger increase in allocation for animal husbandry, dairying and fisheries (27.1 per cent). Notably, the growth in the allied sector is more pro-poor.

Within the agricultural sector, substantial increase has happened in fisheries, irrigation and watershed development, price support and stabilisation, and livestock health and disease control. While allocation for crop insurance and direct benefit transfer under PM-KISAN has remained almost unchanged.

In the crop sector, given the challenge of climate change, the Budget lays emphasis on enhancing productivity and its reliance to climate risks such as droughts, floods, and heat-waves, through research on breeding for stress tolerance. It is worth noting that the Budget provides assistance for flood management to Bihar, Assam, Sikkim, Himachal Pradesh and Uttarakhand. By proposing to develop a taxonomy of climate finance to enhance availability of finance for mitigation and adaptation related investments, it moves a step forward to target and track climate finance.

Given the adverse effects of agro-chemicals on natural resources, agro-biodiversity, environment, and human and livestock health, the government aims covering one crore farmers under natural farming over the next two years. Importantly, it supports them in certification and branding. In addition, it has announced establishing 10,000 bio-input resource centres to promote the use of bio-based inputs in agriculture. An additional effort towards this is the 13.2 per cent reduction in the fertilizer subsidy, possibly to use the savings to incentivise natural farming.

Digital crop survey

Crop diversification could preserve natural resources, and enhancing farm income. Digital crop survey announced in the Budget (in 400 districts) will help crop planning in a better way. In addition, the land related actions such as unique land parcel identification number or Bhu-Aadhaar, digitisation of cadastral maps, and establishment of land registry will facilitate credit flow and other services to agriculture. These initiatives may not fructify immediately, but are at the core of long-term planning for sustainable development of agriculture.

India faces a deficit in edible oils. It imports 60 per cent of its edible oil and 10 per cent of pulses requirements. For achieving self-sufficiency in pulses and oilseeds, the government will strengthen their production, storage and marketing.

Efficient supply chains could reduce farmers’ transaction costs and help realise higher prices. Initiative to develop large-scale clusters for vegetables, involving Farmer Producer Organisations, cooperatives and start-ups, closer to the demand centres is a strategic step to effectively link farmers with market. This reminds of the NDDB’s strategy of establishing village dairy cooperatives in the hinterland of cities and towns.

Likewise, financial support for production and export of shrimps, and reduction in basic custom duty on broodstock, shrimp and fish feed are important initiatives to further improve country’s competitiveness in the international market.

To transform agriculture, research, both in and outside agriculture, is essential. In 2022-23, India spent 0.43 of agricultural GDP on research in agriculture, which is about half of the global average. Public investment in research pays rich dividends. Every rupee spent on agricultural research leads to a pay-off of ₹13.85. However, the budget for agricultural research and education has witnessed only a marginal increase, from ₹9,877 crore in 2023-24 to ₹9,941 crore. However, operationalising the fund of ₹1-lakh crore for private-sector driven research and innovations could improve the research outcomes.

Birthal is Director, and Balaji is Scientist, ICAR-National Institute of Agricultural Economics and Policy Research, New Delhi