Context: In the Union Budget, the government has termed agriculture as the first engine of growth and announced PM Dhan Dhanya Yojana. The Economic Survey 2024-25 claimed the agriculture sector as the sector of the future.
Relevance of the Topic: Mains: Detailed question on agriculture sector; challenges; issue; prospects.
Government Efforts in Budget 2025:
- PM Dhan-Dhaanya Krishi Yojana:
- New scheme announced to provide impetus in agriculture growth to 100 districts in the country (under phase 1).
- Focuses on five key aspects; enhancing productivity, improving irrigation facilities; improve credit availability; to adopt crop diversification; to augment post harvest storage at panchayat and block level.
- Rise in Kisan Credit Card interest subvention:
- A rise to 5 lakh from 3 lakh in the Modified interest subvention scheme.
- Boosting fisheries sector-
- The budget is targeted to boost the fisheries sector as it has increased the budgetary allocation of fisheries by 1500 crore.
- Also there is a reduction from 30% to 5% on the custom duties on Frozen Fish Paste for the manufacturers and exporters to provide a boost to the fisheries sector in India.
- Promoting crop diversification-
- Atmanirbhar in pulses- Budget has announced a six-year long mission to become self-reliant in the in pulses with a special focus on tur, urad and masoor.
- Fox seed (Makhana) development- Government has also announced a 100 crore budget for the Makhana Board of Bihar to boost the processing and value addition of the fox seeds.
- National Mission on Seeds:
- The National Mission on High Yielding Seeds will be launched.
- Aim: To enhance the research ecosystem, focus on developing and promoting seeds with high yields, pest resistance, and climate resilience, and make more than 100 seed varieties commercially available.
- Mission for cotton productivity:
- This would be a five-year mission, it will facilitate significant improvements in productivity and sustainability of cotton farming, and promote extra-long staple cotton varieties.
- The best science and technology support will be provided to farmers.
- Enhancing loan limits for farmers:
- The finance minister also announced increasing the loan limit under the Modified Interest Subvention Scheme (MISS) from Rs 3 lakh to Rs 5 lakh.
- New Urea fertilizer plant
- To achieve self-sufficiency in urea fertilizer, the finance minister announced to set up a plant with an annual capacity of 12.7 lakh metric tons at Namrup in Assam.
Prospects of Agriculture Sector:
- Largest workforce participation: A maximum of 46.1% of the labour force participate in the agriculture and allied activities, making it the largest sector to provide employment to the people.
- Women participation: As per Oxfam 80% of the agriculture laborers are women, also maximum women SHGs are associated with the agriculture and allied activities leading to an impetus to women empowerment and participation in the economic activities.
- Fostering associated ecosystem: Agriculture activities are associated with the food processing industries, boost to agriculture productivity will lead to the growth of these export and consumer associated sectors
- Helping in rural demand growth: Growth of agriculture will lead to the boost in the demand of the rural regions leading to more investments in the rural sector.
- Poverty alleviation- As per the situation assessment survey of agriculture, 22% of Below poverty line belong to the agriculture sector/ Agriculture growth and investment will lead to the targeted poverty alleviation.
Major Challenges in the Agriculture Sector:
- Climate stress- The climate change and unpredictable weather patterns adversely affect the crop yield. Eg; Kashmir saffron production declined from 8 metric tons in the past 12 years.
- Fragmented land holding- Around 80% of Indian farmers operate on small plots, that hinders the economies of scale and affects profitability.
- Lack of modernisation- India agriculture lacks the modernisation techniques especially for the women participants in the agriculture. Eg; Agriculture mechanisation level in India is around 40% that is considerably lower than China and USA
- Price fluctuation and market uncertainties- Farmers often lack direct access to markets, leading to dependence on intermediaries who may offer unfavorable prices.
- Informal credit- Indian farmers, despite numerous efforts for financial inclusion, depend on the informal sources of the credit. Eg; 23% farm credits are from informal sources.
- Limited agriculture extension- Farmer and agriculture development is restrained by the limited research and development and underdeveloped agriculture extension in India.
Way Forward:
- Adopting climate-resilient crops, cooperative farming, and smart irrigation practices.
- Integrating technology through AI-based advisory services and digital marketplaces like e-NAM to enhance productivity and market access.
- Strengthening MSP procurement and financial support, including improved crop insurance to safeguard farmers from distress.
- Sustainable practices like organic farming and integrated pest management to ensure long-term soil health.
- Government initiatives such as PMKSY and PMFBY, along with private sector participation, to drive agricultural transformation.
A holistic approach combining policy support, technology, and sustainability can make Indian agriculture more resilient, productive, and profitable for farmers.