Union Budget 2026-27: Major steps announced by govt to increase farmers' income

Finance Minister Nirmala Sitharaman on Sunday proposed a slew of initiatives in the Union Budget 2026-27, which she said would boost farmer incomes, create rural employment and strengthen value chains in agriculture and allied sectors.

Presenting the Budget in Parliament, Sitharaman said the government will take up integrated development of 500 reservoirs and Amrit Sarovars to support fisheries, while also strengthening the fisheries value chain in coastal areas with market linkages involving start-ups, women-led groups and Fish Farmers Producer Organisations (FFPOs).

“To provide quality employment opportunities in rural and peri-urban areas, we will support the Animal Husbandry sector in entrepreneurship development,” the finance minister said.

She went on to announce a credit-linked subsidy programme, modernisation of livestock enterprises, creation of integrated livestock, dairy and poultry value chains, and promotion of Livestock Farmer Producer Organisations.

The Budget also laid strong emphasis on high-value agriculture, with support proposed for crops such as coconut, sandalwood, cocoa and cashew in coastal regions, agar trees in the Northeast, and nuts including almonds, walnuts and pine nuts in hilly areas.

Noting that India is the world’s largest producer of coconuts, Sitharaman said about 30 million people, including nearly 10 million farmers, depend on coconut cultivation for their livelihood.

“To further enhance competitiveness in coconut production, I propose a Coconut Promotion Scheme to increase production and enhance productivity through various interventions including replacing old and non-productive trees with new saplings/plants/varieties in major coconut growing States,” the minister said.

A dedicated programme for Indian cashew and cocoa was also announced to make the country self-reliant in raw cashew and cocoa production and processing, enhance export competitiveness and transform Indian cashew and cocoa into premium global brands by 2030.

Sitharaman also announced that the Centre will partner with state governments to promote focused cultivation and post-harvest processing of sandalwood, saying it is closely linked to India’s social and cultural heritage.

For hilly regions, the finance minister proposed support to rejuvenate old, low-yielding orchards and expand high-density cultivation of walnuts, almonds and pine nuts, with a focus on value addition and youth engagement.

The announcements come against the backdrop of a strong performance by the agriculture and allied sectors, as highlighted in the Economic Survey 2025-26 tabled in Parliament on January 29.

According to the Survey, India’s food grain production is estimated to have reached 3,577.3 lakh metric tonnes in the agriculture year 2024-25, an increase of 254.3 LMT over the previous year, driven mainly by higher output of rice, wheat, maize and coarse cereals.

The livestock sector recorded a 195 per cent growth in gross value added between FY15 and FY24, while fish production surged 140 per cent during 2014-24, the Survey said.

In the Union Budget 2025, Sitharaman had announced multiple schemes for agriculture and allied sectors, including the Pradhan Mantri Dhan-Dhaanya Krishi Yojana to develop 100 low-productivity districts and a six-year mission for self-reliance in pulses with an allocation of ₹1,000 crore for FY26.