The specific measures announced for agriculture in the Budget reflect the vision of transformative changes that must be induced through right policy interventions proactively to ensure that the farm sector performs in sync with the pace and quality of progress in other sectors of the economy. With rising per capita income, the consumption basket of households is changing, and along with food security nutritional security is also becoming important.
The demand for food is rising, requiring tech-led cultivation practices to raise farm productivity as input-intensive production is increasingly appearing to be less commercially viable and also environmentally unsustainable.
The emphasis of the Budget in transforming agriculture research is path-breaking. The current institutional architecture for applied research in agriculture — Indian Council of Agricultural Research (ICAR), agricultural universities, Krishi Vigyan Kendras (KVKs), private sector R&D initiatives and agri start-ups — has consistently provided innovative solutions over the last several decades, but for which India would not have emerged as a net food surplus country and ensured food security for its 1.4 billion population.
But the challenges in the farm sector are rising, and technological solutions and their mass adoption may be the only way to breakout from a potential low-equilibrium trap. Realignment and refocusing of the research set-up, therefore, seem necessary.
The prominence given to vegetable production and related supply chains in the Budget must be assessed in the context of: (a) the diverging core (ex-food and fuel) inflation and food inflation, with high vegetable prices considerably slowing the disinflation process, highlighting the importance of supply-side measures, and (b) the change in the consumption basket, where, as per the Consumption Expenditure Survey (2022-23), the share of vegetables in consumption now exceeds that of cereals in both urban and rural areas, unlike in 2011-12.
Efficient supply chain
The challenge in the vegetables segment is not only higher production, but also an efficient supply chain that could ensure supply to consumers at more competitive mark-ups. Reduction of post-harvest losses and preservation of perishables — given seasonal supply cycles and high sensitivity to climatic shocks — are also important dimensions of the vegetable supply chain. As envisaged in the Budget, a formal structure for engaging farmer producer organizations (FPOs), cooperatives and agri start-ups, leveraging on their experience and reach in rural areas would be essential.
Post-Covid supply chain disruptions brought to the fore the importance of indigenous production of key food items for preserving domestic food security. Minimising transmission of volatility from global food and commodity (input) prices can also help achieve the goal of domestic price stability. The measures announced in the Budget — missions for pulses and oilseeds and shrimp production and export — would help enhance the country’s resilience and also create new growth opportunities.
With climate change related risks rising, mitigation as well as adaptation across sectors has become unavoidable, notwithstanding the apparent trade-offs between short-term costs and long-term benefits.
The thrust given to natural farming — covering one crore farmers across the country supported by certification and branding, over the next two years — will help enhance the spread of sustainable farming practices. Chemical-free farming, with resource recycling, scope for improving soil fertility, reducing greenhouse gas emissions while also enhancing farmers’ income is already being practised in some States, and the Budget will provide a significant boost for their wider adoption.
Farming is progressively transforming to agri business. In that context, the Budget’s proposal to implement Digital Public Infrastructure (DPI) in agriculture, with a plan to cover farmers and their land records in three years, is another path-breaking initiative. This will empower farmers with easier access to finance and government’s targeted benefits, while also enhancing their reach to partners for agri-business ventures.
With the satisfactory progress of monsoon in July after the June deficit, the outlook for agriculture has improved. The measures in the Budget will brighten the medium-term prospects of agriculture.
The policy challenge of simultaneously raising farmers’ income, enhancing farm productivity, promoting sustainable framing practices, while keeping food prices reasonable for the consumers is daunting, but the Budget deftly balances all these objectives while remaining focused on securing a higher growth trajectory to achieve the goal of a Viksit Bharat by 2047.
The writer is Chairman, NABARD. Views are personal