Sowing new seeds of growth

The promotion of natural farming that Budget FY24 promises needs to be accompanied by robust traceability systems which ensures that farmers get income and customers get quality food on their plates

Sowing new seeds of growth
The announcement of an Agriculture Accelerator Fund for encouraging agri start-ups is another welcome step in identifying and firing up the entrepreneurship space. (IE)

By Amit Vatsyayan

Amidst fears of continuing geo-political strife, rapid climate change and rising global food insecurity, the Union Budget for FY 23 exhibits the government’s vision for balancing economics, environment, and social perspectives. The agriculture sector is one of the key pillars of the Indian economy. The announcements made in this Budget will go a long way in strengthening agriculture and its allied sectors. It demonstrates the government’s resolve to tackle systemic issues that are currently holding agriculture growth and farmers’ income back from the opportunities that exists in this field.

One of the key steps in building a robust agri ecosystem is to invest in building digital public goods, for which the government is showing firm intent. Finance Minister Nirmala Sitharaman’s announcement of building a digital public infrastructure is a step in that direction, as it would eliminate the information asymmetry that currently exists and ensure better access to farm inputs and credit, and also help increase productivity by improving crop estimation and market intelligence. Moreover, the current cost of transactions is prohibitive, both for the farmers and service providers. The cost of data acquisition and finding the correct data are holding the overall sector back due to huge inefficiencies. For the agri sector to proceed further, it needs speed of decision-making and transformation towards a faster process, and the agri stack is a welcome step toward that transformation. Developing a strong ecosystem will also go a long way in boosting the entire agriculture value chain and help Indian agriculture become much more competitive and environmentally sound.

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The announcement of an Agriculture Accelerator Fund for encouraging agri start-ups is another welcome step in identifying and firing up the entrepreneurship space, especially when seen in the background of the global worry about recession and the flight of capital currently happening in many tech companies and start-ups. The Accelerator Fund would help start-ups in multiple areas reach scale and grow beyond the initial phase. it would be critical to assess the lessons learnt in this space to make the accelerator relevant to the context of agriculture.

The Atmanirbhar Horticulture Clean Plant Programme is another critical issue and aims to address the challenges faced by farmers in accessing quality planting material. This Programme will bring focus on production, especially in horticulture, as the quality of planting material determines the quality and quantity of produce, which in turn, determines the income farmers can get. In many states, the quality of planting material has been critical to the success or failure of the farmers. Similarly, the government’s focus on millet is also praiseworthy. As Millets are climate resilient, consume lesser water and are also nutritionally dense, they can resolve the current nutritional challenges facing India and also address the environmental challenges. The Indian government’s approach of proposing millets at the UN and celebrating 2023 as the International Year of the Millets is a great strategy for taking millets to the world. India’s G20 presidency this year, will also give a definite fillip to the agenda of millets.

The announcement on cotton has been a long-standing demand from the cotton industry. The promotion of extra-long staple cotton variety is important as demand for it already exists. It would provide a much better income source for the farmers and benefit the textile industry in a big way. At a time when the world is countering the challenges posed by a rapidly changing climate, the government’s initiative to boost natural farming is a notable step. Apart from promoting soil health and in turn enabling carbon sequestration, natural farming also holds the potential to reduce the cost of production for the farmers. However, the promotion of natural farming needs to be accompanied by robust traceability systems which ensures that farmers get income and customers get quality food on their plates.

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Another highlight of the budget was providing Rs 20 lakh crore credit funding for animal husbandry, fisheries and dairy sector. The focus on increasing credit availability in these sub-sectors is welcome and the important lessons here would be to look at past experiences of credit usage and build up a credible pipeline of credit-worthy projects in the sector.

This budget has been one the most inter-connected budgets that have come in the recent past as it tries to connect environment, economics, and people benefits. While initiatives like natural farming and millets respond well to climate change, the announcements of a coastal mangrove scheme MISHTI—(Mangrove Initiative for Shoreline Habitats & Tangible Incomes) would not only improve environmental conservation through the mangroves but would also significantly improve the lives and livelihoods of communities that are dependent in that area. Similarly, Amrit Dharohar is about conserving our wetlands. One of the critical challenges which India has been facing is conserving the flora and fauna of the wetlands. So conserving the wetlands and investing in them is a welcome step as it would also have a significant impact on agriculture, particularly in the East, North-East and Central India.

In summary, the budget continues to push for systemic changes and balances the interconnections between economic, environment and people priorities.

The writer is leader, agriculture, social sector and skills, EY India

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First published on: 14-02-2023 at 17:47 IST
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