In the Union Budget 2023, FM Sitharaman announced an agricultural accelerator fund that would provide a boost to the agritech startups. FM Sitharaman further stated that the Farm Credit Limit for FY24 will be raised to Rs 20 lakh crore, which will pose as a significant benefit for agrochem and seed companies. Agricultural companies and firms producing other agricultural products have jumped sharply as a result of this statement.
Seed companies such as Bombay Super Hybrid Seeds, Upsurge Seeds of Agriculture and Mangalam Seeds all hit upper circuit at 5% while Kaveri Seed Company grew 2.5%. Vikas Proppant & Granite and Kohinoor Foods saw a jump of 10%. Agri-Tech (India) gained 1.73% as well.
Additionally, fertilizers companies have also seen a sharp increase. Fertilizers And Chemicals Travancore rose 3.14%, Madras Fertilizers added 3.90% while Gujarat State Fertilizers & Chemicals gained 1.81%. Coromandel International saw a more modest gain of 0.8% compared to its peers. The Finance Minister announced the PM Pranam Scheme will promote balanced use of fertilizers reducing fertilizer subsidy bill. This will encourage use of organic farming and micro fertilizer and also, 1 crore farmers will be facilitate to adopt natural farming over the next 3 years, said ICICIDirect.
“‘The Agriculture Accelerator Fund is a welcome move for the agricultural sector. It will act as a catalyst to spur growth in the agriculture tech ecosystem and address a few critical challenges across the value chain relating to input-output linkages, precision farming, ensuring traceability and quality of production, higher value addition, among others. This is not only going to promote entrepreneurship and job creation in this sector but also unlock value in the agribusiness value chain which in turn will boost profitability for the farmers and is a right step towards achieving the vision of doubling farmers’ income,” said Soumyak Biswas, Partner – Management Consulting, BDO India.
“The digital infrastructure for agriculture and farmers, ranging from supply chain to analytics, will transform the entire agri value chain and make it more robust and productive”, said Deepankar Sanwalka, Digital Transformation, Partner Grant Thronton Bharat. Anand Varadarajan, Director, Asit C Mehta Financial Services added, “Government initiated computerisation for 63,000 primary agricultural credit societies with an investment of Rs 2,516 crore is going to make the deployment of Rs 20 lakh crore seamless.”
“In keeping with its focus on inclusive growth, the Union Budget has hiked outlays on Infrastructure and Agriculture which in our view would have a force multiplier impact on the economy”, said S Ranganathan, Head of Research, LKP Securities.