Budget 2026-27 Keeps ‘Business as usual’ for farmers

What did farmers expect from the budget this year? There are many possible answers depending on who you are. Unlike Industry associations, farmers do not have a unified ‘business’ organisation to engage with the government and media either pre budget or post budget. There are a few voices, but none powerful enough to move the needle in favour of the farmers. Therefore, one cannot say for sure, what was the expectation and where was the disappointment. Probably, farmers had hoped, ‘prayed’ may be more appropriate, for something that will enhance their income and reduce their risk. More subsidies? Better prices? Easier access? Even they have different choices! They found none of these, and this could be their disappointment. In fact, there is nothing about the ‘farmers’ welfare’ part in the budget of the ministry ‘Agriculture & Farmers welfare’.

A reality check is in place here: Markets, international and domestic, are changing and there is only ‘so much’ that government can or ‘should’ do. Whether Government did what they could is another question! Is it time for farmers to ask for unfettered access to technology, finance and markets, both domestic and international, and take accompanying risks? Is it time to make the shift to new technology, efficient institutions, and more freedom? If that be so, the strategy and the narrative must be clear! 

For the time being, however, let us talk budget and its numbers. M/o Agriculture (& Farmers welfare) gets almost no increase in budget allocations. Fisheries, Dairy and Animal Husbandry gets a jump The budget allocation for the Department of Animal Husbandry & Dairying increases from Rs 5,302.83 crore to Rs 6,153.46 crore (about 16 percent), Department of Fisheries increasing from Rs 1,732.95 crore to Rs 2,761.80 crore, a 59 percent rise, both deservedly so. Cooperation gets a big boost, most of it going to NCEL (the apex export cooperative). What will NCEL do (hopefully for export infrastructure) is not clear. How will it bring ‘samruddhi’ to farmers? we do not know yet! Let us wait and watch! 

The real disappointment is the reduction in allocation for R&D. The DARE (ICAR) allocation fell from Rs 10,280.83 crore (RE FY 2025–26) to Rs 9,967.40 crore (BE FY 2026–27), a decrease of Rs Rs 313.43 crore, or about 3 percent. I did expect a big boost in R&D budget for the following reasons: 

1. Any investment in R&D gives the highest returns in agriculture. 

2. Aatmanirbhar Bharat requires an intense research effort in agriculture and allied sectors.3. Climate resilience and sustainability require much more decentralised and locally relevant research. Ignoring all these challenges may result in a  heavy price being paid in the long run! 

Fertiliser subsidy (Rs.1,70,781 Cr) and food subsidy (Rs. 2,27,629 Cr), the two major subsidies remain untouched. I am sure that there will be an upward revision of both these in RE. But where does the high fertiliser subsidy leave natural farming with its meagre outlay of Rs.750 cr.? 

VB G RAM G, the controversial replacement for MGNREGA gets an outlay of Rs.95,692 crores. This comes with a catch. This represents 60% of the total; states must find the 40%, i.e., about Rs 60,000 crores. Most likely a non-performer this year. When actual expenditures come at the end of the year, we will see the drop in numbers!

Let us take a quick look at  the key announcements for agriculture and allied sectors?

(i) integrated development of 500 reservoirs and Amrit Sarovars

(ii) strengthen the fisheries value chain in coastal areas and enable market linkages involving start-ups and women-led groups together with Fish Farmers Producer Organisations. 

Entrepreneurship development through: 

(a) a Credit-Linked Subsidy Programme 

(b) scaling-up and modernisation of livestock enterprises 

(c) enhance creation of livestock, dairy and poultry-focused integrated-value chains and 

(d) encourage creation of Livestock Farmer Producers Organisations.

Support for high value crops such as coconut, sandalwood, cocoa and cashew in coastal areas, including replacing old and non-productive trees with new saplings/plants/varieties in major coconut growing States.

A dedicated programme proposed for Indian cashew and cocoa to make India self-reliant in raw cashew and cocoa production and processing, enhance export competitiveness and transform Indian Cashew and Indian Cocoa into premium global brands by 2030.

-Promote focused cultivation and post-harvest processing to restore the glory of the Indian Sandalwood ecosystem.

-Launch Bharat-VISTAAR—a multilingual AI tool that shall integrate the AgriStack portals and the ICAR package on agricultural practices with AI systems. This will enhance farm productivity, enable better decisions for farmers and reduce risk by providing customised advisory support.”

Of these, Bharat Vistaar should emerge as a game changer. Integrating AI with some of the key farming related advisories, weather, soil moisture, soil nutrient status, pest infestations market conditions etc., could provide invaluable support to farmers. The design, however, must be locally appropriate for the crops, weather and soil. The danger lies in devising a ‘one size fits all’ format. This requires constant data upgrades and a nimble ICAR driven technology and advisory support system meeting changing demands and emerging challenges.

The announcements for coconut, cashew, cocoa and sandalwood in coastal areas seems to be targeted at the southern states, primarily Kerala, Karnataka and Tamil Nadu. There is a central Coconut Board which had run similar schemes earlier without too much success. How the new scheme is devised will make the difference. Since details are not available, it is difficult to comment on these. However, it is necessary to state that rejuvenation and replanting schemes are not new. These have been tried in many crops with varying degrees of success. 

Self-reliance in raw cashew ( a tree crop) is a long-term objective. Rejuvenation, replanting with new varieties, saplings, plants etc needs an integrated project. Given the fact that farmers do not find planting cashew in fertile lands attractive, the focus must shift to large plantations in marginally degraded lands. Declaring cashew as a plantation crop and giving exemptions under land ceiling laws could bring the much-needed investment in raw cashew production. The idea of enhancing export competitiveness by improving the quality and efficiency of processing is a good idea. However, this needs a clear understanding of technology, quality standards in external markets and needs to focus selectively on ‘export leaders’ and not become a ‘subsidy for all’ regime.

Cocoa is more complex. Starting with the inherent quality of cocoa bean, its pre-processing and the final product for use as an ingredient, a series of interventions must be worked out for effective outcomes. The mistakes of earlier experiments over the last three decades could be good pointers. Ideally, these could have been combined in a mission mode to do research & development, production, processing and markets.

The emphasis on livestock and fisheries is long overdue. These are fast growing sectors and deserve a higher level of support. Animal  protein requirements are on the rise and these sectors can accelerate growth in the sector. Investing in water bodies for inland fisheries, accompanied by sufficient R&D and infrastructure support could propel this sector to greater heights. 

Dairy and poultry have been growing at a higher rate compared to the crop sector. Integrated value chains for poultry are needed across India and could  be easily set up in the private sector.  Dairy value chains do exist in large parts of India in the cooperative sector. The question is : will these be strengthened in states like U.P, M.P etc., where the coops are weak or is this a way to bring more private investment into the dairy value chain? While dairy has become quite attractive to the private sector, cooperatives play a bigger developmental role. This program, therefore, needs to differentiate the social objectives from pure profits while implementing schemes.

A clear strategy to enhance farmer incomes, a clear pathway for sustainable farming, derisking agriculture from climate and market induced vulnerabilities, emphasis in real terms on natural and organic farming are the major misses. The disappointment: reduction in the outlay for R&D in agriculture, low outlays for sustainable farming and no ideas for improving governance in the sector. 

I feel FM could have done more! Farmers will hope for better days as they usually do and continue to produce and keep consumers fed! But is this what we should be happy with? The question remains!