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Budget 2024-25: Focus on High-Value Agriculture

 

The Economic Survey has highlighted a significant shift necessary for smallholder farmers to boost their incomes. Traditionally, crops like rice, wheat, millets, pulses, and oilseeds have been the backbone of India's agricultural sector. However, the survey emphasizes the need for farmers to diversify into high-value agriculture, including the cultivation of fruits and vegetables, as well as engaging in fisheries, poultry, and dairy farming. This diversification is crucial for enhancing income levels and ensuring sustainable growth in the agricultural sector.

The Need for Diversification

India's agriculture sector has demonstrated robust growth, with an average rate of 4.18% over the last five years. This growth is crucial for the overall economic development of the country. Despite achieving record food grain production of 329.7 million tonnes in 2022-23, with oilseed production reaching 41.4 million tonnes, the sector's reliance on traditional crops poses limitations on income growth for smallholder farmers. In the following year, 2023-24, food grain production saw a slight dip to 328.8 million tonnes, primarily due to poor and delayed monsoon rains. However, there was a marginal increase in the production of other crops, such as nutri cereals and oilseeds.

UPAg Department of agriculture and farmers welfare

Emphasizing Allied Sectors

The survey highlights the growing importance of allied sectors such as animal husbandry, dairying, and fisheries in enhancing farmers' incomes. These areas offer significant potential and should be emphasized more to boost overall agricultural income. Crop diversification towards oilseeds, pulses, and horticulture can be promoted by addressing key issues like investment in agri-infrastructure, credit accessibility, and the establishment of appropriate market institutions.

The Role of MSP

Minimum Support Price (MSP) has been a vital tool in incentivizing crop diversification. The survey notes that MSP has a positive and statistically significant effect on retail prices of all crops, with a more substantial impact on crops where procurement is substantial, such as paddy and wheat. This underscores the importance of continuing to support MSP while encouraging farmers to diversify their crop choices. However high value agriculture(fruits, vegetables, dairy, etc) are purely market driven and do not require MSP support.

Aligning Production with Agro-Climatic Characteristics

Efforts must be made to align production patterns and practices with the agro-climatic characteristics and natural resources of various geographies. This approach ensures sustainability and efficiency in agriculture. Additionally, research and development, along with the promotion of digital technologies in agriculture, can significantly enhance farm income. Improving the quality of seeds and promoting organic and natural farming practices are crucial steps toward realizing sustainable agriculture.

Enhancing Private Sector Investment     

The survey also advocates for increasing private sector investment in agriculture. Investment in technology, production methods, marketing infrastructure, and reducing post-harvest losses is essential. A greater focus on post-harvest infrastructure and the development of the food processing sector can help reduce wastage and losses, increase the length of storage, and ensure better prices for farmers.

Conclusion

The Economic Survey makes it clear that the path to increased income for smallholder farmers lies in diversification towards high-value agriculture. By leveraging the potential of allied sectors and addressing critical issues in agri-infrastructure and market institutions, farmers can achieve better incomes and contribute to the overall economic growth of the country. Sustainable practices, supported by research and development and enhanced private sector investment, are key to realizing this vision.

 

We with our tool “Fasal Salah” are always advising farmers for crop diversification and making their agriculture climate resistant.



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