How budget 2024 has supported Indian agriculture

Agriculture contributes around 18% of India’s GDP and has the 3rd highest allocation in the current budget, hence it becomes important to analyze the impact of budget announcements with respect to the sector of strategic announcements.

Below is the list of key announcements

Focus on agricultural research

• Boosting productivity and climate resilience: A comprehensive review aims to increase productivity and develop climate-resilient crop varieties.
• National cooperation policy: Systematic growth in the cooperative sector will be supported by this policy.
• New varieties introduction: Release of 109 new high-yielding, climate-resilient varieties of 32 field and horticulture crops.

Promoting natural farming

• Farmer involvement: One crore farmers will be introduced to natural farming within two years.
• Bio-input resource centers: Establishment of 10,000 centers to support natural farming.

Digital public infrastructure (DPI)

• Farmer coverage: DPI will be implemented to cover farmers and their lands within three years.
• Digital crop surveys: Surveys will be conducted in 400 districts.
• Kisan credit cards: Issuance of Jan Samarth-based Kisan Credit Cards.
• Farmer registries: Integration of details for six crore farmers and their lands into registries.

Boosting shrimp production and export

• Financing: Facilitation of financing for shrimp farming, processing, and export through NABARD.

Promoting self-sufficiency for pulses and oilseeds

• Self-sufficiency strategy: Development of a strategy to achieve self-sufficiency and enhance production, storage, and marketing of oilseeds and pulses.

Strengthening vegetable production and supply chains

• Efficient supply chains: Promotion of farmer-producer organizations, cooperatives, and start-ups for efficient vegetable supply chains.

Inclusive and sustainable development

• All-inclusive development: Programs focusing on farmers, youth, women, and the poor.
• Women and girls: Allocation of over ₹ 3 lakh crore for schemes benefiting women and girls.
• Polavaram irrigation project: Financing and early completion to ensure food security.

Promotion of value added farm products

• Food irradiation units: Financial support for setting up 50 units in the MSME sector.
• MSME credit scheme: Introduction of a credit guarantee scheme for purchasing machinery and equipment.
• MSME credit model: Development of a new assessment model for credit by public sector banks.
• Credit support: Provision of credit support during stress periods.
• Food quality labs: Establishment of 100 NABL accredited food quality and safety testing labs.
• C-PACE services: Extension of services for voluntary closure of LLPs.

Enhancing water infrastructure for agriculture

• Water and sanitation projects: Announcement of projects for utilizing treated wastewater for agricultural irrigation.

Building sustainable agriculture infrastructure

• Irrigation and flood mitigation: Financial support for ongoing and new schemes, including barrages, river pollution abatement, flood mitigation, and irrigation projects.

Agriculture focus innovation, research, and development

• National research fund: Operationalization of the fund for basic research and prototype development.
• Private sector research: Establishment of a mechanism for private sector-driven research and innovation with a financing pool of ₹ 1 lakh crore.

Land reforms to streamline the farmer’s assets

• Land reforms: Focus on rural land-related actions, including the assignment of Unique Land Parcel Identification Numbers (Bhu-Aadhaar), establishment of land registries, and linking to farmers' registries.

Here are the stocks to benefit from Agricultural reforms:

Source : Crisil, Economic Times, Ken Research, Screener.in. Note:

• This is not an exhaustive list of stocks catering to the agriculture sector
• Stocks selected based on market cap
• CAGR growth rate for the period FY 24-30.
• Price data as on 26th July-24.
• In case of MSME Credit companies, PB is considered instead of PE

Conclusion

The Union Budget 2024 introduces significant initiatives aimed at transforming the agriculture sector. The focus on enhancing productivity, promoting natural farming, and leveraging digital infrastructure is expected to modernise agriculture and make it more resilient to climate change. Support for shrimp production, oilseeds, pulses, and vegetable supply chains will boost production and market efficiency.

Inclusive development programs and substantial allocations for women and girls will promote social justice and economic empowerment.