Union Budget 2024: Expectations from agriculture sector

New Delhi: India’s growing population along with a constant rise in income levels is leading to a constant increase in demand for agricultural products and increasing burden on existing agricultural resources. The prevailing scenario indicates a need to improve productivity along with reducing costs and improving quality to make the most efficient use of the available resources. The growing adoption of cutting-edge agricultural techniques as well as incorporation of artificial intelligence (AI), geographic information systems (GIS), drones, and remote sensing-based technologies in agriculture is a step in the right direction.

Current challenges faced by the sector

Although the agriculture sector has transformed significantly over the last few decades, challenges like fragmented landholdings, low productivity, limited mechanization, minimal value addition opportunities and insufficient credit availability prevent farmers from realizing higher prices. Another major problem is inefficient extension mechanisms, which makes it difficult for advanced agricultural practices to reach each and every farmer. Due to this farmers still use basic, traditional methods for cultivation.

1. Focus on increasing productivity
India, one of the leading agricultural nations, still lags in productivity as compared to other developed countries. China’s agricultural productivity per hectare is 6.7 tons for rice and 5 tons for wheat, compared to India’s 2.4 tons for rice and 3 tons for wheat. This reduces overall farm output leading to lower price realization per acre. Therefore, there is a pressing need to focus on creating awareness about novel technologies among farmers to increase their adoption. At the same time, it is also necessary to ensure that the necessary tools, implements and machines are made affordable for farmers and/or their credit needs are met.

2. Strengthening storage infrastructure
Over 16% of fruits and vegetables, 10% of oilseeds, 9% of pulses, and 6% of cereals are wasted annually in India in the post-harvest stages, mainly due to improper storage conditions. Sufficient steel silos as well as warehouses should be made available while equipping them with modern sensors; this will reduce food grains losses significantly while making the system more robust. Emphasis should also be put on developing a network of micro-cold storages along with packhouses that will aid in reducing on-farm wastage of fruits and vegetables and give farmers a wider selling-window.

3. Efficient training & extension facilities
Given the large population and low literacy levels among farmers, it is difficult to make novel agricultural practices reach every farmer. The overburdening of extension has been resulting in lower productivity, with widening gap in information transfer. The focus should shift to modernizing the extension system with the intervention of technology. This will allow workers on the ground to reach out to more farmers with accurate information. The model followed by private seed and pesticide companies can be an inspiration.

4. Development of well-equipped mandis
Various efforts have been made to link farmers with buyers across geographies, particularly through e-NAM at the central level. Various states have also set-up their own e-mandis to make the operations smooth and transparent for farmers as well as traders. However, there is a need to revamp the mandi infrastructure. Attention should be given to setting up and efficiently maintaining facilities like grading centers, dryers, multi-commodity cooling centers, small godams, etc. along with the availability of reefer vehicles customized to the geography and crops traded. This will help farmers know the quality of their produce. It also increases the shelf life of their produce as well as provide them with much-needed bargaining power.

5. Ramping up technology adoption
The agri-tech market is expected to rise by more than 600% in size in the next 5 years. Along with reducing the cost of cultivation and improving productivity and quality of output, agri-tech is expected to improve farmers’ share of consumer prices, and thereby, improve farmers’ income by up to 20%. The central government’s initiatives of IDEA and Agristack for streamlining of databases has already gained momentum in multiple states. It is needed that this data be made open source as envisaged. The start-ups are also being supported by the agriculture accelerator fund. However, the focus now has to be on streamlining the operations of these players on the ground. For achieving ease of operations, it is necessary that a single-licence be provided for operations within a state, especially for players involved in trading of agri-produce. Access to underutilized warehouses/infrastructure, provision of subsidies to set up solar powered infrastructure, and cold storages can go a long way in supporting startups in ramping up their operations quickly.

Conclusion
It is expected that the agriculture budget for 2024-25 addresses multiple pain-points of the sector simultaneously; thus, continuing the all-round development of the sector which is likely to show compounded impact in upcoming years.