Union Budget 2025-26 in Agriculture

Challenges in Indian Agriculture

• Impact of Climate Change: Temperatures in India have risen by 0.7°C since 1951.
  • July-September precipitation has declined by 6%, increasing risks to agricultural productivity.
• Soil Health Issues: Low organic carbon content and inadequate moisture retention in soils.
  • Current farming practices and imbalanced fertiliser usage exacerbate the problem.
• Skewed Fertiliser Subsidy Policy: Urea is heavily subsidised compared to other nutrients like phosphate (P) and potash (K), leading to overuse of nitrogen (N).
  • Micronutrients like iron, zinc, and boron are underutilized.
• Pro-Consumer Bias in Food Policy: Frequent export bans (on onions, wheat, sugar, and rice) and below-cost domestic market dumping by FCI harm farmers.
  • Economic cost of rice to FCI: ₹39/kg; sold in the open market at ₹29/kg.
• Negative Producer Support Estimate (PSE): India’s PSE is -15.5%, indicating an “implicit tax” on farmers, compared to 14% support in China and OECD countries.

Key Suggestions for Agriculture Budget 2025-26

• Increase Agri-R&D Spending:
  • Current allocation: <0.5% of agri-GDP.
  • Proposed: Double to at least 1% of agri-GDP.
• Promote Soil Health:
  • Support practices that enhance organic carbon and moisture retention.
  • Emphasize balanced fertilisation (macronutrients and micronutrients).
• Introduce a Direct Income Transfer Scheme:
  • Based on per-hectare basis, using existing data (fertiliser sales, soil health cards, PM-KISAN).
  • Free fertiliser prices from controls to restore balance in N, P, K usage.
  • Promote technological innovations like nano-urea and nano-DAP.
  • Benefits:
    • Improve nutrient use efficiency.
    • Reduce environmental damage and plug leakages in subsidies.
    • Restore farmer trust through effective communication.
• Learn from Milk Revolution:
  • Milk: India’s largest agri-commodity with 239 million tonnes production, surpassing the US (103 million tonnes).
  • Farmers receive 75-80% of consumer price in the milk value chain.
• Revolutionise Fruits and Vegetables:
  • Currently, farmers receive only ~33% of consumer price.
  • Establish a dedicated board like NDDB (National Dairy Development Board) for fruits and vegetables.
  • Appoint a visionary leader akin to Verghese Kurien to drive reforms.
• End Anti-Market Practices:
  • Stop export controls, private stock limits, and futures bans.
  • Ensure market-driven pricing without excessive government intervention.
• Encourage Long-Term Market Reforms:
  • Move from pro-consumer bias to balanced farmer-consumer policy.
  • Facilitate open markets to enhance farmer incomes and stabilize supply.
• Promote Sustainable Agriculture:
  • Strengthen initiatives like the Natural Farming Mission.
  • Recognize that natural farming alone cannot feed a growing population (1.67 billion by 2050).
  • Combine biofertilisers with appropriate chemical fertilisers for sustainable productivity.

Sharing is caring!