Budget FY24 has not stepped up outlays for agriculture and allied activities—the largest employer of the nation’s workforce—which has upset farmers, farmer unions and agri experts. Although the sector’s performance has been described in the latest Economic Survey as buoyant and resilient, allocations for the department of agriculture and farmers welfare are lower by 7% from the budgeted estimates for FY23. Since this government came to power in 2014, agricultural growth has averaged 3.5% per annum. This far-from-buoyant performance has been strongly influenced by the southwest monsoon, which has become highly wayward due to climate change. There were four years of normal and above normal rains (2016, 2019, 2020, and 2021) when this sector grew at an average annual rate of 4.6%. This is much higher than when rains were below normal or deficient (2014, 2015, 2017, and 2018) when agricultural growth averaged 2.3%.
Given this monsoon-dependence, policy must prioritise investments in resilient infrastructure like irrigation and water management facilities. There is a need to prepare for extremely heavy as well as poor rainfall and develop drought-resistant and short duration crops by investing more in R&D. In this regard, the good news is that Budget FY24 has increased allocations for agri R&D and education by 12%. Outlays on crop science are up by 36%. Every rupee spent on agri R&D yields better returns than a rupee spent on subsidies. The Budget has also stepped up agricultural credit with a focus on animal husbandry, dairy and fisheries, which are rising in relative importance vis-a-vis crop production and improving farmer incomes manifold.
The measures announced in the Budget like the digital public infrastructure for agriculture build on ongoing initiatives like the AgriStack being put in place by the government with data gathered from millions of farmers since 2014. Data from schemes like Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), Soil Health Card and PM Fasal BimaYojana will be linked to land records available with state governments. AI and data analytics can then be harnessed to provide actionable intelligence and personalised services to boost farmer incomes by addressing challenges like plateauing yields, soil degradation, wastage, inadequate market infrastructure. Towards this end, a scheme in the PPP mode is to be launched with public sector research and extension institutions partnering private agri-tech startups and other stakeholders.
AgriStack is integral to the larger Digital India initiative pushed by the government that uses technology to transform how it delivers services to the population. Through authentication by Aadhaar, the government is already transferring food and fuel subsidies, wage payments under the MGNREGA scheme, income to farmers under PM-Kisan, among others. Even as farmers continue to cultivate on diminishing size of holdings and face relentless input cost escalation, PM-Kisan allocations have not been stepped up. The budgeted allocations for the flagship MGNREGA scheme are also lower by 18%. However, being a demand-driven scheme, it can be raised through supplementary demands for grants later on, if need arises. The promised doubling of real incomes of farmers between 2015 and 2022 hasn’t happened. Official data show that real incomes from cultivation have fallen in absolute terms after 2015. Between 2020-21 and 2022-23, annual growth rates in agriculture and allied sectors have been stagnant between 3% and 3.5%. But there are no prizes for guessing why those who live off the land are disappointed by the lower outlays in Budget 2023.