Sanjiv Kanwar, SVP, Yara India in an interaction with Industry Outlook shares his views on the Budget 2023 in the context of the agriculture sector. He also throws light on what will be the role of industry in ensuring that the set goals are realized.
What are your views on the Budget 2023 in the context of the agriculture sector? What will be its impact on the sector?
The budget for 2023 had a major focus on the agriculture sector, with several initiatives announced to boost the sector and support farmers. It provides higher impetus to regenerative agriculture, inclusive growth, improved access to agriculture credit, better-quality agriculture inputs, digitization, and technological development. The budget also focuses on public-private partnerships through the Clean Plant Program, a cluster-based approach for value chain development; and creating Digital Public Infrastructure for agriculture. In fact, developing a technology-oriented agriculture industry through intensive digitization has been a very strong focus area for the Union Budget 2023.
The increased farm credit, access to better-quality inputs through the clean plant program, and investments in digital infrastructure will facilitate increasing farm-level productivity and farm income levels. In addition, budgetary allocation for the Pradhan Mantri Matsya Kisan Samridhi Sah-Yojana (PMMSY) Sub-scheme, decentralized storage, and the cluster-based value chain approach will lead to more inclusive growth and build the agri-tech start-up ecosystem, that will, theoretically engineer innovations in agriculture. Increase in credit allocation could make it easier for individuals involved in allied agricultural activities to obtain credit facilities. Through a fund dedicated to start-ups in rural India, the FM accorded right thrust on the value-chain approach in the agriculture sector.
PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth" will be launched to incentivise states and union territories to promote alternative fertilisers and balanced use of chemical fertilisers. Digitizing public infrastructure for agriculture may make it easier for farmers to obtain necessary information related to agricultural credit and farming practices. An open source and interoperable public good could leverage the expansive data supporting evidence-based policy-making.
Overall, the measures announced in the Union budget for the agriculture sector are expected to have a positive impact on the sector, by providing much-needed support to farmers and increasing investment in the sector. The measures are likely to lead to increased productivity and profitability for farmers and may also result in higher food production and greater food security for the country.
What will be the role of industry in ensuring that the set goals are realized?
The private sector, including agribusinesses and agro-processing companies, can play a significant role in supporting the government's initiatives and helping to ensure that the goals set out in the budget are realized. Agribusinesses may want to work with farmers to help them increase their productivity and improve their access to markets, while agro-processing companies may invest in new technologies and processes to help increase the value of agricultural products.
Industry can also play a role by sharing international best practices when it comes to sustainable farming practices and rural ecosystems. Industry would benefit from partnering with the Government when it comes to developing rural infrastructure, marketplaces and supply side efficiencies. Specially, ready availability of raw materials and access to information on innovative practices can not only help the farm sector but also help industry tap into the rural growth story emerging from India. Post COVID, a significant amount of farm labour has returned to rural roots and thus the opportunity is ripe for industry to tap into this ready availability of labour and set up production and supply bases closer to farm gate.
Support Start-ups to amplify reach – Private entities can help to deliver agricultural technology services to farmers through public private partnerships which will in return boost the country's farming sector and address the challenges of sustainability, efficiency and inclusivity. Public and private bodies could work together to pool resources and funds to leverage agricultural technology.
What more could have been done to expedite the growth of the agriculture sector?
Numerous ongoing concerns still exist in the agriculture sector despite efforts to overcome them. The government’s control over crucial facets of the industry, like input-output, marketing, and distribution, is one of the main causes for worry. Experts say that it is vital to foster commercialization and diversification as well as employment prospects in the industry.
Modern land record systems are also thought to be necessary for carrying out agricultural reforms successfully. The agriculture industry has the opportunity to improve its sustainability and contribute to economic expansion and development by solving these problems. While the measures outlined in the budget 2023 for the agriculture sector are expected to have a positive impact, there are still several areas where additional efforts could be made to expedite the growth of the agriculture sector. For example, the Govt in gave an impetus to start-ups by creating a dedicated accelerator fund, this may result in the creation of many more start-ups in the country, however, there has been no clear next steps to how can the start-ups contribute and expand further.
Some of the other areas where the industry solicits active government interventions are:
Simplification of regulations: A specific roadmap towards simplifying regulations for introduction of innovative crop nutrition products, particularly micronutrients and speciality fertilisers will help improve the overall quality of the agri-products in India. Specific focus on tackling soil deficiency: Most Indian soils are deficient in organic carbon and macronutrients, which directly affects the crop output. In order to tackle this, it is essential for the government to focus on improving overall soil health.
Mapping specific points of intervention for private sector participation in the agricultural value chain – For example: to reduce fertiliser subsidies govt can encourage use of micronutrient, this will ensure a more sustainable approach to addressing soil depletion as well as diversifying the dependency of farmers away from urea-based fertilizers.
Improving rural infrastructure: Investing in rural infrastructure, including roads, power, and communication systems, is critical for the growth of the agriculture sector. The government could consider additional measures to improve rural infrastructure and to support the growth of rural businesses. While the government has been advocating for increased usage of organic farming practices; there needs to be a narrative push around a model which supports conjunctive use of both inorganic and organic sources (manure, bio-fertilizers etc.) of plant nutrients for judicious use of chemical fertilizers to improve soil health. This is necessary as India being an agrarian economy cannot wholly sustain on an organic farming-based approach.
