Allocation to the agriculture sector in the Union Budget 2024-25 increased by 4.58 per cent – Rs 1,32,469.86 crore from Rs 1,26,665.56 crore RE (Revised Estimates) of 2023-24.
Out of total allocation, Rs 1,22,528.77 crore was for the Department of Agriculture and Farmers Welfare and Rs 9,941.09 crore to the Department of Agricultural Research and Education.
The allied sectors of fisheries and animal husbandry saw a total allocation of Rs 7,137.68 crore, an increase of 27 per cent compared to 2023-24 RE. The Department of Animal Husbandry and Dairying saw an allocation of Rs 4,521.24 crore (increase of 15 per cent), whereas the Department of Fisheries was allocated Rs 2,616.44 crore (increase of 53.8 per cent). Agriculture and allied sectors put together saw an allocation of Rs 1,39,607.54 crore in 2024-25. Apart from this there is budgetary allocation to schemes in different ministries, all summing up to Rs.1.52 lakh crore.
The share allocated to the agriculture ministry in the overall budget (Rs 48,20,512.08 crore) was just 2.74 per cent, almost at par with 2023-24. In 2022-23 budget, this share was 3.36 per cent. In other words, though there is an increase of Rs.5,804.30 Crs to agriculture sector in 2024-25, the share of allocation to agriculture in the overall budget has been declining since 2022-23.
Allocation of Budget to major schemes in Agriculture
Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA) scheme got an outlay of Rs 6,437.50 crore, an increase of Rs 4,237.50 crore compared to 2023-24. This is likely to give boost the procurement of pulses and oilseeds from farmers at fixed floor prices. The FM also mentioned in her budget speech that the government will strengthen the production, storage and marketing for achieving self-sufficiency in pulses and oilseeds. India currently imports about 14 per cent of its pulses consumption and about 60 per cent of its total annual edible oil consumption.
The FM also announced a digital crop survey for Kharif season using the Digital Public Infrastructure for Agriculture (DPI) in 400 districts. This is expected to address the limitations in the error-ridden tracking and estimation of yield and production of key crops in the current system. The government is planning to digitise the data of six crore farmers and their lands in three years and issue Jan Samarth-based Kisan Credit Cards in five states.
Market Intervention Scheme and Price Support Scheme (MIS-PSS) — has not seen any allocation this year. Even last year (2023-24), MIS-PSS got a token allocation of Rs. 1 Lakh as against Rs 1,500 crore in 2022-23. While PSS is for procurement of notified pulses, oilseeds and copra at MSP will be now covered under PM-AASHA, procurement of perishable agricultural / horticultural crops for which MSP is meant, does not see any budgetary allocation in 2024-25.
The allocation to Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), a cash incentive scheme for landholder farmers, remained unchanged, at Rs 60,000 crore.
Allocation to ‘Formation and Promotion of 10,000 Farmer Producer Organizations (FPOs)’ scheme was Rs 581.67 crore, an increase from Rs 450 crore (RE 2023-24).
In the budget speech, Sitharaman mentioned that 10 million farmers in the next two years will be initiated into natural farming, supported by certification and branding. But the 2023-24 budget speech also had a similar commitment. According to Niti Aayog website data, 10.05 lakh hectares land is under natural farming in 16 States. Prominent states among those 16 States are- Gujarat, Andhra Pradesh, Madhya Pradesh, Kerala, Maharashtra, UP, Odisha, & Jammu & Kashmir. The allocation under the natural farming scheme was increased from Rs. 100 Crore in RE 2023-24 to Rs 365 Crore in 2024-25 budget. (The sum allocated in 2023-24 budget original estimates was much higher, at Rs 459 crore.)
In line with the declaration in the budget 24-25, 109 varieties of 61 crops were released by Indian Agricultural Research Institute on 11th August, 2024 that included 34 field crops and 27 horticultural crops. Among the field crops, seeds of various cereals including millets, forage crops, oilseeds, pulses, sugarcane, cotton, fibre and other potential crops were released.
The other initiatives covered under the Budget 2024-25 are- developing large scale clusters for vegetable production near major consumption centres, and promoting Shrimp production and export through NABARD. The government also announced to introduce a National Cooperation Policy for systematic and all-round development of the cooperative sector.
Weak link- forward market linkage
While the above initiatives announced in the Budget 24-25 for agriculture sector majorly address the backward linkage gaps, no significant measures were announced to focus on strengthening the forward (market) linkages. Though there are certain major initiatives already on the roll like- e NAM that are expected to strengthen the market linkages (farm to market) through digital platforms, the fact remains that our physical infrastructure is very weak. Unless we strengthen the physical infrastructure and ensure direct market linkage to the farmers by eliminating the middlemen, though we may be able to attain food security, we will not be able to ensure income security to the farmers.
Possible solution
The government must seriously start addressing this issue and the proposed National Cooperation Policy can be extended to cover the forward linkages in agriculture by leveraging on the existing PDS infrastructure which can parallelly serve as a direct marketing channel from farm to market to the farmers. The government can think of procuring the food grains directly from the farmers only to cater to the requirements of the targeted beneficiaries under the PDS at MSP and convert the PDS infrastructure into a SPV (Special Purpose Vehicle) wherein the centre, states and the farmers’ cooperative federations become the stake holders. The farmers may use the PDS infrastructure as a use and pay model to reach the market and sell their farm produce at market prices through the cooperative federations.
That way, the PDS infrastructure will also generate revenues and can become a self -financing model over a period of time, thereby reducing the financial burden to the government in its annual budgetary allocation. This will strengthen the storage, distribution infrastructure in the food supply chain and also provide the last mile linkage to the farmers to the direct market access through fair price shops of the PDS that can also serve as their market outlets. This strategy will not only ensure food security to the nation but more importantly lead to income security to the farmers by eliminating the middlemen.
Let us hope that the government will consider this aspect while formulating its National Cooperation Policy which will provide a long-term solution to rural poverty.
