It is expected that the agriculture budget for 2024-25 addresses multiple pain-points of the sector simultaneously.
Co-written with Anand Ramanathan
India’s increasing population, coupled with a continual upward trajectory in income levels, is resulting in an ongoing surge in the demand for agricultural products, placing an escalating strain on the existing agricultural resources. The current situation underscores the imperative to enhance productivity while concurrently cutting costs and elevating quality to optimize the efficient utilization of available resources. The expanding embrace of state-of-the-art agricultural methodologies, combined with the integration of artificial intelligence (AI), geographic information systems (GIS), drones, and technologies based on remote sensing in agriculture, represents a positive stride forward.
Current challenges faced by the sector
While the agricultural domain has undergone substantial changes in recent decades, obstacles such as fragmented landholdings, reduced productivity, constrained mechanization, limited opportunities for value addition, and inadequate credit accessibility hinder farmers from attaining elevated prices. An additional notable challenge lies in inefficient extension mechanisms, rendering the dissemination of advanced agricultural practices to every farmer a challenging task. Consequently, farmers continue to rely on fundamental and traditional cultivation methods.
2024-25 Budget Expectations
1. Focus on increasing productivity
India, recognized as one of the prominent agricultural nations, still trails behind in productivity when compared to other developed countries. China’s agricultural productivity stands at 6.7 tons per hectare for rice and 5 tons for wheat, whereas India’s figures are 2.4 tons for rice and 3 tons for wheat. This disparity results in an overall reduction in farm output, leading to diminished price realization per acre. Consequently, there is an urgent requirement to raise awareness regarding innovative technologies among farmers to enhance their adoption. Simultaneously, ensuring accessibility of essential tools, implements, and machinery for farmers, and addressing their credit requirements, is crucial.
2. Strengthening storage infrastructure
More than 16% of annual wastage occurs for fruits and vegetables, with oilseeds witnessing a 10% loss, pulses at 9%, and cereals at 6% in India during post-harvest phases. This is primarily attributed to inadequate storage conditions. It is crucial to establish an ample number of steel silos and warehouses, incorporating cutting-edge sensors, to significantly mitigate losses in food grains and enhance the overall system’s resilience. Additionally, there is a need to prioritize the creation of a network of micro-cold storages and packhouses to effectively curb on-farm wastage of fruits and vegetables, providing farmers with an extended selling window.
3. Efficient training & extension facilities
Due to the extensive population size and limited literacy rates among farmers, achieving widespread adoption of innovative agricultural practices poses a significant challenge. The strain on extension services has led to diminished productivity and an expanding disparity in information dissemination. Emphasizing the need to update the extension system through technological intervention is crucial. This enhancement will enable field operatives to connect with a larger number of farmers by delivering precise information. Drawing inspiration from the operational approach of private seed and pesticide companies can be insightful.
4. Development of well-equipped mandis
Numerous initiatives have been undertaken to connect farmers with purchasers across different regions, notably via e-NAM at the central level. Several states have also established their own electronic marketplaces to streamline and enhance transparency in operations for both farmers and traders. Nevertheless, there is a requirement to overhaul the market infrastructure. Emphasis should be placed on establishing and effectively maintaining facilities such as grading centers, dryers, multi-commodity cooling centers, small godams, etc., in addition to ensuring the availability of reefer vehicles tailored to the specific geography and traded crops. This proactive approach will enable farmers to assess the quality of their produce, prolong the shelf life of their crops, and furnish them with essential negotiating leverage.
5. Ramping up technology adoption
The agri-tech sector is anticipated to witness a growth of over 600% in magnitude within the upcoming 5 years. While diminishing cultivation costs and enhancing productivity and output quality, agri-tech is poised to enhance farmers’ portion of consumer prices, potentially augmenting farmers’ earnings by around 20%. Government initiatives like IDEA and Agristack, aimed at database optimization, have gained traction across various states. It is crucial that this data is made openly accessible as intended. Agriculture accelerator funding is backing start-ups, yet the current focus should shift towards streamlining ground-level operations for these entities. To facilitate operational convenience, issuing a unified license for state-level operations, particularly for those engaged in agri-produce trading, is imperative. Granting access to underutilized warehouses/infrastructure, offering subsidies for establishing solar-powered facilities, and supporting cold storage setups can significantly aid startups in swiftly expanding their operations.
Conclusion
Anticipated in the fiscal year 2024-25, the agricultural budget is projected to tackle various challenges within the sector concurrently. This approach ensures the sustained holistic growth of the industry, potentially resulting in a cumulative effect in the years ahead.
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