Successive budgets have talked about aatmanirbharta, but on ground, a lack of progress evidenced by supply shortfalls is deeply concerning

Essentially, India is still an agrarian economy, with agriculture and allied sectors (dairy, poultry, and fishery—called ‘animal agriculture’) providing livelihood to 45% of the country’s workforce but accounting for just about 15% of the GDP.

Fragmented landholding, dependence on monsoon, limited irrigation, low level of input usage, suspect quality of inputs, inadequate pre- and post-harvest management, lack of appropriate rural infrastructure, weak market linkages, and many more related issues have stymied sustained and sustainable farm growth. 

All these have resulted in low yields, non-uniform quality, on-farm and off-farm losses, price volatility and unsatisfactory returns for growers. And now, three big challenges haunt the farm sector—land constraints, looming water shortage, and adverse effects of climate change. The MSP, procurement, annual income support (PM-KISAN), input subsidies, and freebies, like free rations, have failed to lift the farm sector and move towards global competitiveness. We have to go well beyond all of the above for real impact. Agriculture consists of several sub-systems, and so a holistic approach or ecosystem approach is the way forward. Over the years, successive Union budgets came up with several initiatives, but outcomes remained far removed from the hype that came with the announcements.

For our country, success in agriculture would be the true test of democratic federalism. The Centre and the states have to work together with unity of purpose.

Agriculture and related matters like land, water, and markets are in the State List under the Seventh Schedule of the Constitution, while Union budget proposals, including financial outlays for agriculture, the export-import policy, the tariff policy (customs duty), and the fiscal and monetary policy, and also administrative powers that impact the farm sector, are all in the Centre’s domain.

At the macro level, let me suggest a few mantras for farm resurgence. 

l Strengthen the input delivery system for seeds, agrochemicals, fertilisers and finance. For the purpose, set up a monitoring mechanism that seeks to weed out unscrupulous operators.

l Rapidly expand irrigation facilities. Several major and medium irrigation projects face cost and time overruns; in some cases, last-mile connectivity is stalled for want of additional funds. Sort out interstate disputes expeditiously. The centre must take the initiative to work with states.

l Infuse multiple technologies in agriculture, both pre-harvest and post-harvest. Infotech, biotech, satellite tech, nuclear agritech (mutation breeding, irradiation), nanotech, digital tech, drone, blockchain tech, and more. To be sure, technology is scale neutral. Tech will facilitate ‘precision farming’ suitable for our country’s smallholder cultivation. Challenge/encourage startups to find smart solutions.

l Invest in rural infrastructure, including road connectivity and scientific warehouses. Utilise the Agri Infra Development Fund. Depoliticise APMC oversight, strengthen market yard operations, and use technology to ascertain quality and transparent price discovery. Privatise unviable market yards. States must proactively do this.

l Initiate massive awareness, training, and education campaigns for farmers (130 million) to inform them about input management, agronomy, modern cultivation techniques, market outlook, and so on. Over time, seek to convert growers into savvy traders. Deliver weather, input, output, market, and price information to growers on their mobile handset. Engage agricultural universities and Krishi Vigyan Kendras (KVKs) in this educational campaign.

l Given the enormity of the challenge and criticality of the sector, substantially step up the budget outlay for agri- and allied sectors. While outlays are known, where’s the outcome? It devolves on the Finance Minister to present an Outcome Report based on the promises made and outlays provided in the previous year’s budget. Lack of accountability usually fosters inefficiency and indifferent outcomes. The National Mission for Edible Oil (for palm oil), launched in August 2021, had set acreage and production targets for 2025-26. Would the FM provide a status report to the nation?

These are by no means the last words, but these big-ticket reforms or initiatives will go a long way in mitigating the challenges that confront the farm sector. Implementation is the key to success. The centre and the states have to work together with shared objectives and interests. Formulating a National Agriculture Policy with regionally differentiated strategies should be a good starting point for farm resurgence, especially in the context of extant challenges.

I would expect the budget to focus especially on three key crops—oilseeds, pulses, and cotton. We are the world’s largest producer of pulses and second largest in cotton. The country spends over $20 billion on the import of vegetable oils and pulses. Add cotton to the list. We have turned from a net exporter until two years ago to a net importer with an import of five million bales ($300 million). The situation is fraught.

Successive budgets have talked about aatmanirbharta, but on the ground, a lack of progress evidenced by supply shortfalls is deeply concerning. Aatmanirbhar now appears to be a chimaera because there is no holistic and strategic approach to self-reliance, nor is there anyone to take ownership. 

Also, there is a palpable lack of ‘political will’ to regulate or monitor import trade, collect advance data, and make strategic interventions in a way that would judiciously balance growers’ and consumers’ interests. It is possible, but policymakers must be open to rational suggestions. Policy decisions are hardly data-driven. 

Worse, policymaking circles lack the knowledge and capability for commodity commercial intelligence and research to take timely rational decisions. Hedging as a scientific tool for price risk management for value chain participants is unavailable for key crops for reasons no one knows. For the key crops—oilseeds, pulses, and cotton—I make four key suggestions.

Stewardship: Growers need to be educated about good agricultural practices, including input management, agronomy, modern cultivation practices, integrated pest management (IPM), integrated nutrient management (INM), etc. 

Technology: It will be a game changer for the country, but irrational opposition to tech infusion continues to keep farmers vulnerable and dependent on official handouts. This must change. Promote domestic genetic research through public-private partnership.

Replication: Reduce the large inter-regional variation in crop yields by studying the practices adopted by growers in high-yield areas and replicating them in low-yield areas. 

Role of Corporates: Encourage corporates with large exposure to oilseeds, pulses, and cotton to establish backward linkages; let them work with FPOs and help augment domestic production through contract cultivation.