A farmer walks across a wheat field on the outskirts of Amritsar.
| Photo Credit: AFP

A Budget is the response of a government to the challenges in the economy. The effort in the Economic Survey 2024-25 was to spin a positive narrative on the state of Indian agriculture. It claimed that Indian agriculture remained remarkably resilient owing to a rise in productivity, an expansion of crop diversification, and an increase in farmers’ income. These claims were either suspect or highly exaggerated.

To begin with, there is no significant jump in crop productivity. A simple analysis based on index numbers shows that growth rates of yield between 2014-15 and 2022-23 were marginally lower in food grain crops and non-food grain crops than between 2004-05 and 2013-14. Second, there is no major evidence of crop diversification in India, other than marginal shifts in a few States in favour of pulses. If at all diversification is real, it took place outside the crop sector in the spheres of livestock and fisheries. But the share of households involved in the livestock and fisheries sectors is dwarfed by the corresponding share of households in the crop sector. Third, while the government continues to claim a rise in farmers’ income, data show the opposite — there is either a stagnation or fall in farmers’ real incomes in recent years.

The “resilience” of Indian agriculture, a la the Economic Survey, was not policy-induced but owing to a set of fortuitous factors, including the hardening of international prices and favourable weather conditions in the post-Covid years. At the same time, the more deep-seated problems, as evidenced by low productivity, slow growth of prices, shrinkage of profitability, falling real incomes and rural real wages, have continued to create conditions that militate against any growth stimulus emerging from agriculture.

Reduced allocations

From the commentaries prior to the Budget, one expected that the government would reverse its past fiscal neglect of agriculture, which was in large part seen as a penal action for the farmers’ agitations after 2020. The rude shock that the rural electorate delivered to the BJP in June 2024 was also cited as a motivation for course correction. But the Budget belies these optimistic expectations. The fiscal neglect of agriculture continues.

Let us begin with agricultural research, which must be the centre of investment for efforts to raise crop yields alongside the development of climate resilience. The overall increase in spending on agricultural research and education between 2023-24 and 2025-26 is just ₹21 crore. Compare this with the pseudoscientific National Mission on Natural Farming, for which allocation was ₹30 crore in 2023-24 but is ₹616 crore for 2025-26. This is not just a reflection of inverted priorities, but also a shocking embrace of irrationality.

If we consider crop husbandry, which is an umbrella category for expenditures on schemes and institutions in agriculture, the allocation has fallen by ₹5,195 crore between 2023-24 and 2025-26. There has also been a drastic reduction in allocation by ₹3,622 crore for the Pradhan Mantri Fasal Bima Yojana, from which many States have withdrawn due to design failures, between 2024-25 and 2025-26. The allocations for most other central sector schemes are also either stagnant or have fallen.

Much was said in the Budget speech on the new crop-based missions, but the allocations for these are paltry. The allocation for the Cotton Technology Mission is ₹500 crore, the Mission for Pulses is ₹1,000 crore, the Mission for Vegetables and Fruits is ₹500 crore, and the National Mission on Hybrid Seeds is ₹100 crore. A new Makhana Board, with an allocation of ₹100 crore, has been announced for Bihar. But the already existing commodity boards are cash strapped. For example, between 2024-25 and 2025-26, allocation for the Coffee Board has remained unchanged, the Rubber Board’s allocation has risen by just ₹40 crore, and allocation for the Spices Board has risen by just ₹24 crore. Allocation for the Coconut Development Board has been cut from ₹39 crore in 2023-24 to ₹35 crore in 2025-26.

Fiscally ignored sectors

Despite the claims in the Economic Survey on diversification into livestock and fisheries, these sectors also remain fiscally ignored. The total expenditure on fisheries would rise by just ₹87 crore between 2024-25 and 2025-26. Between 2024-25 and 2025-26, the expenditure on animal husbandry is set to fall by ₹407 crore while that on dairy is set to rise by just ₹321 crore. Considered together, the overall expenditure on all budget items in animal husbandry and dairy are to rise by a paltry ₹319 crore between 2024-25 and 2025-26. The Budget portrays these sectors as growth engines, but fiscally squeezes them.

A new scheme called Prime Minister Dhan-Dhaanya Krishi Yojana has been announced. This aims to target 100 districts with low productivity, moderate crop intensity, and below-average credit parameters – much in the model of the Aspirational Districts Programme. But agriculture is a State subject. While the Budget speech mentioned “partnership with States” in the description of this Yojana, it remains to be seen if its governance would be designed to be centralised, of a one-size-fits-all variety, and one that ends up fiscally burdening the States.

While the Budget speech mentioned agriculture several times, these were hardly matched by financial allocations. The schemes and programmes are starved of resources, and the real issues that confront the farmers and the sector remain sidelined.

R. Ramakumar, Professor at the Tata Institute of Social Sciences, Mumbai

Photo used for representation purpose only.
| Photo Credit: The Hindu

While the Finance Minister Nirmala Sitharaman made a mega announcement for the agriculture sector, farmers in Maharashtra, as well as across the nation, expressed their displeasure over the budget allocations.

Considering the prolonged agricultural crisis and poor financial status of farmers across the country, Raju Shetti, president of the Swabhimani Shetkari Sanghatana, a Maharashtra farmers union based in Kolhapur, said even though there was no specific announcement for Maharashtra, all the farmers in his known circle were glued to the television and their mobile phones.  

He said, “We were hopeful that the Minister would be considerate and kind towards the welfare of farmers this time, but we are disappointed. Of the total population in our country, over 60% are farmers but, in the budget, only 3.15% provision is given to farmers. In 2019-20 the provision allocated for farmers was 5.44%. The agricultural economic growth which was 4.7% till 2022-23 has now come down to 3.3%. This gradual decline has resulted in continuous farmers suicide cases, specially in Maharashtra.”  

Since last year, the government has given priority to palm oil import which has caused the decline in our soyabean produce from ₹9,000 per quintal to now ₹4,500 per quintal, Mr. Shetti said. Farmers feel that banning the export of onion and sugar and encouraging the import of cotton and pulses has resulted in the downfall of our country’s agricultural economy.  

Farmers require sufficient warehouse space to stock the surplus produce, Mr. Shetti said. “The price of chemical fertilisers and pesticides have gone up. We urge the Finance Minister to release a white paper stating the GST collected by the government on all the agriculture products and allied industries then check how much provisions they provide for the sector in budget, we demand transparency.“ 

Farmers said that the Centre’s announcement sounds nice to ears with words like agriculture research setup, natural farming, atmanirbharta, digital public infrastructure and so on but in reality, they are hardly implemented. “The agriculture universities in the State do not have enough faculty, they lack proper infrastructure then how will they teach about latest technology to boost agriculture? Natural farming and organic farming are practically not possible as it does not cater to all sections of consumers,” Mr. Shetti said.  

Bharat Dighole, president, Maharashtra State Onion Growers Farmers Association, has welcomed the Finance Minister’s announcement on engaging farmers into natural farming. He added that the farmers were expecting a complete debt waiver from today’s budget. “We [farmers] are disappointed. The government wants to increase agricultural production, but the main problem is that our products do not get sustainable market prices. Farmers had lost crores of rupees due to the drop in prices. Today’s budget did not make any policy decision or financial provision for onion farmers. The government should have made a provision to refund the crores of rupees collected through minimum export price and export duty to the onion producers. Out of the provisions of ₹1.52 lakh crores for the agriculture sector, no provision has been made for the onion producers.” 

All India Kisan Sabha (AIKS) President, Ashok Dhawale said that the allocation for agriculture and allied sectors as a percentage of the total budget has been continuously declining from 2019 onwards from 5.44% to the present 3.15%. “Compared to the 2022-23 actuals, there is a 21.2% decrease in allocations for agriculture and allied activities. The Finance Minister, while claiming to have given priority to agriculture, has given priority to corporates while giving zero priority to the welfare of farmers, workers, and the poor,” Mr. Dhawale said.

There is a massive decline of about 24.7% in allocation to crop husbandry, the farmers organisation stated. “There is also a huge decline by about 34.7% in allocation for fertilisers when compared to the 2022-23 actuals, which amounts to a decline of ₹87,238 crores. This will have a deleterious impact on agricultural productivity,” Vijoo Krishnan, General Secretary of AIKS said.   

On the proposal for implementation of the digital public infrastructure in agriculture for coverage of farmers and their lands in three years, farmers feel that this should be done only after public scrutiny and wide discussion. The plan to bring details of six crore farmers and their lands into the farmer and land registries can have very serious implications, Mr. Dhawale said. “Such centralised digital registries are prone to breach of confidentiality and can open the doors for land grabbing by corporates and other unscrupulous agents,” he said.