No economic sector should be evaluated without reference to the long-term and short-term goals. The annual Budget too needs to be examined on a similar anvil. The Union Budget 2025-26 pivots the nation’s long-term vision on Viksit Bharat (2047), and the two pillars that cast a direct responsibility on agriculture are zero-poverty, and making India the ‘food basket of the world.’ Both these are good catalytic agents, as zero-poverty encompasses nutrition-security, and world’s food basket implies achieving high marketable surplus ratios (MSRs) across all the agricultural sub-sectors.

Higher MSRs entails productivity-led agricultural growth which ensures both quantitative adequacy and qualitative standards of the destination countries. Hence, the country would need to draw up long-term action plans for each of the sub-sectors, and activities thereunder, encompassing foodgrains, oilseeds, fruits and vegetables, milk and meat, fish and aquaculture. This pre-requisites new research rooted in agroecological and organic management practices, since our system is already burdened with soil degradation, water toxicity, over-withdrawal of ground water, and pesticide residues beyond. It would, therefore, be imperative to adopt system-based management for higher productivity in preference to season-based yield, as the former promotes diversified cropping programmes, agro-forestry, livestock-linked cropping, and the like which are all ecologically sounder in a challenging context of climate change.

The Budget proposes to spur agricultural growth and productivity, which will find supplementary support from the interventions that the Budget intends to make on its proposals to i) build rural prosperity and resilience; ii) focus on inclusive growth; iii) trigger employment-led growth; iv) promote exports; and v) nurture innovation. Though the economic structure of rural India has undergone basic changes, agriculture’s share in rural GDP is around 40 per cent and it continues to be dominant. Hence, job-led agricultural growth can be secured by rolling out secondary agriculture that promotes food and non-food processing at various scales of economy combined with robustness of agri-exports. The Budget does promise to promote micro-enterprises and skilling to address under-employment common in our agricultural sector. The thrust in exports is appropriate against the background of our agri-exports doubling since 2018. This will lead to higher returns on investment.

The price incentive that we can expect from agri-exports and domestic market reforms will stimulate adoption of better technology and higher capital investments by the farmers which will cascade into higher yields. Rightly does the Budget concentrate on 100 districts with low productivity and low investment rates. A healthy partnership with the States will catapult these districts onto a higher productivity trajectory.

Productivity-led production growth is supported by national missions on oilseeds, pulses, and cotton (with emphasis on long staple cotton); value-chain-based comprehensive programme for fruits and vegetables; and establishment of Makhana Board in Bihar. Highly laudable is the “National Mission High Yielding Seeds.” Quality seeds and clean planting material constitute the starting point of a vigorous value chain. The existing system considered as one of the best in the world needs reforms, to improve farmers’ access and affordability. Adoption of both recommended seed replacement and varietal replacement rates will enhance the productivity by at least 25 per cent.

The attention to fishery and aquaculture sector, which has been registering consistently high growth rates has been rightly assured of a sustainable framework. This will strengthen our exports, and ameliorate the economic status of one of the poorest sections of our society.

Productivity-led growth can be sustained only when it is supported by research & development (R&D), credit, post-harvest management practices that integrates agri-logistics, processing, and marketing (domestic & global) for efficient connectivity between farm gates and demand centres. Various corpus funds that have been created earlier since 2020 under Atma Nirbhar Bharat can be expected to meet these requirements.

On the credit side, kudos for enhancing the production loan limits from ₹3 lakh to ₹5 lakh. This should have been blended with interest subvention on mid-term and long-term loans to give an uptick to capital investments.

The writer is the Chairman, Karnataka Agriculture Price Commission. Views are personal

Published on February 1, 2025