Budget 2024-25: Announcements for agriculture sector are an opportunity missed

This was the inaugural Budget not only for the newly elected Union government but also for the Union Agriculture Minister Shivraj Singh Chouhan, who hails from Madhya Pradesh, a state of immense agrarian significance. The Union Budget 2024-25 was a moment brimming with potential, yet it comes across as a missed opportunity.

With a full five-year term ahead, the government had the opportunity to take bold, transformative decisions that could have set the stage for transformative progress. Instead, the government chose to repeat the announcements with all the old rhetoric and the usual jargon. 

Also, there was no word on the status of their previous announcements such as doubling farmers’ income.

The Budget allocated Rs 1.52 lakh crore to agriculture and allied sectors, a slight increase from the allocation of Rs 1.25 lakh crore in the previous budget. However, the share of agriculture in the total budget is a mere 3.1 per cent in a country where almost 2/3rd of the population is engaged with agriculture.  

Question of intent

Emphasising on the enhancement of agricultural productivity and resilience in the face of an adversely changing climate, the Finance Minister announced the release of 109 new high-yielding and climate-resilient varieties of 32 crops for farmers. However, other actions do not reflect a genuine intent towards ensuring sustainability in agriculture.

For instance, Sitharaman announced that in the next two years, 10 million farmers will be initiated into natural farming supported by certification and branding. 

However, there is no information on the progress of the 2023-24 budget commitment that ensured the same number of farmers to adopt natural farming within three years. 

In the Budget 2023-24, a ‘National Mission on Natural Farming’ was also announced with a meagre budget of Rs 459 crore. 

The revised expenditure is Rs 100 crore only. However, instead of increasing the allocations of the scheme, it is further reduced to Rs 365.6 crore for 2024-25. 

At the same time ‘Namo Drone Didi’, which is expected to enhance the fertigation system to spray fertilisers or pesticides (in contrast to what natural farming aims for) by providing drones to 15,000 selected women self-help groups received an allocation of Rs 500 crore. 

Similarly, Sitharaman once again announced the establishment of 10,000 need-based Bio-Input Resource Centres (BRCs). This was previously declared in the Budget speech for 2023-24, where it was stated that 10,000 BRCs would be set up. The fate of those BRCs remains unclear.

The long march to legal MSP

The demand for a legal Minimum Support Price (MSP) has been long overdue and remains a point of contention between farmers and the government. This issue, however, has not been addressed. Legalising MSP for a broader range of crops could potentially diversify crop production, enhance farmers’ livelihoods and benefit the climate.

The access to market is a critical issue for both conventional and sustainable farmers, and Farmer Producer Organisations (FPOs) can be an essential tool in addressing this challenge through direct marketing and economy of scale. 

The government has again reiterated its commitment to supporting and promoting FPOs. The 2020 scheme aimed to establish and promote 10,000 FPOs. The scheme has a total allocation of Rs 6,865 crore — Rs 4,496 crore for 2019-24, and a further Rs 2,369 crore for 2024-28 to support each FPO for five years.

However, for the year 2024-25, only Rs 581.6 crore have been allocated. It was Rs 500 crore in 2022-23 and Rs 700 crore in 2021-22. 

The decreasing and fluctuating yearly allocations suggest a weakening of the financial commitment. The information on the outcomes of the previous scheme is also not provided. 

In addition to these announcements related to oils and pulse seeds and digital public infrastructure, shrimp production in agriculture has also been made. Sitharaman said that the government would strengthen oils and pulse seeds production, storage, and marketing. 

“A strategy is being put in place to bring in Atma Nirbharta in oilseeds such as mustard, groundnut, sesame, soybean, and sunflower,” Sitharaman said.

The government also announced a National Cooperation Policy for the systematic and orderly all-round development of the cooperative sector.

“Fast-tracking the growth of the rural economy and generating employment opportunities on a large scale will be the policy goal,” the finance minister added.

While the budget acknowledges some critical areas, it fails to deliver the bold, transformative changes required to address the deep-rooted issues plaguing Indian agriculture. 

At a time when the climate change looms large and agrarian distress intensifies, the Economic Survey 2023-24 shows that the agricultural growth rate has significantly declined to 1.4 per cent in 2023-24, compared to the 4.7 per cent growth rate in 2022-23.

Hence, the government’s approach in this Budget appears inadequate and lacks the much needed efforts to uplift the sector and ensure sustainable livelihoods for millions of farmers.