Budget 2022: Agriculture gets a tech boost

For farmers to use appropriate production and harvesting techniques, the government will also provide a package with participation from state governments.
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From Kisan Drones to public private partnerships to help deliver high-tech services to farmers, the Union Budget’s focus was on increasing the use of technology in the agricultural sector. 

This year’s budgeted estimate for agriculture is Rs 132513.62 crore, slightly up from the total allotment of Rs 1,31,531.19 crore in 2021 to two departments – Department of Agriculture, Cooperation and Farmers’ Welfare and Department of Agricultural Research and Education that fall under the Agriculture Ministry.

Finance Minister Nirmala Sitharaman also announced in her Budget speech this morning that the procurement of wheat in Rabi 2021-22 and the estimated procurement of paddy in Kharif 2021-22 will cover 1208 lakh metric tonnes of wheat and paddy from 163 lakh farmers. She added that Rs 2.37 lakh crore will be the direct payment of minimum support price (MSP) value to their accounts. “The government’s focus on equitable MSP distribution is encouraging to see,” says Kulwant Singh, a farmer from Jalandhar, Punjab.

Much to the farmers' relief, there was also no mention of the farm laws that were repealed in November 2021 after a long-drawn farmers’ strike at borders of Delhi. “We were worried that farm laws would be spun off into something new, we are glad that didn't happen,” says Singh.

Industry experts also welcomed the focus on technology. The FM has encouraged the use of ‘Kisan Drones’ for crop assessment, digitisation of land records, spraying of insecticides and nutrients.

“The announcement of Kisan Drones for promoting crop assessment, digitising land records, spraying agri-nutrients like fertilisers and pesticides, etc., will give a fillip to increasing the yield of the small and marginal farmers,” says Amith Agarwal, co-founder and CEO, AgriBazaar, an agritech marketplace.

To provide such hi-tech services to farmers, private agritech players will work closely with the public sector, under a scheme that will be launched in the PPP mode. “The Budget has also placed agritech in the right limelight with the Finance Minister reposing faith in the role of these new-age players to transform the agriculture sector in the country under the PPP mode,” says Prasanna Rao, MD and co-founder, Arya.ag.

Along with the focus on increasing farmers’ digital presence, there is a lot of encouragement for agritech startups as well, including a fund with blended capital, raised under the co-investment model, which will be facilitated through NABARD. Sitharaman said, “This is to finance startups for agriculture and rural enterprise, relevant for the farm produce value chain. The activities for these startups will include, inter alia, support for FPOs, machinery for farmers on rental basis at farm level, and technology including IT-based support.”

For farmers to use appropriate production and harvesting techniques, the government will also provide a package with participation from state governments. “Reduction in taxes on implements will drive mechanisation big time. We are going to see many new business models in design and distribution of farm tools and implements,” says Hemendra Mathur, Venture partner, Bharat Innovation Fund.

To reduce dependence on imports of oilseeds, a scheme to increase domestic production of oilseeds is also likely to be implemented. However, some experts believe this is only meddling with existing practices. Sanjeev Sabhlok, economist, former IAS officer and an advisor to the Swatantra Bharat Party (SBP), believes that the government is increasingly meddling with the crops to be produced, “First, the government banned future trading of crops including oilseed crops such as soybean, which led to farmers’ incomes being crushed. Now it wants to further meddle in a farm’s business on the pretext of increasing oilseeds production. The best way to do that is to approve biotechnology-based oilseed crops such as GM canola (India imports GM canola oil on a large scale), HT Bt cotton, and GM mustard. And then get out of the way.”

Additionally, chemical-free natural farming will be promoted throughout the country with a focus on farmers’ lands in the 5 km wide corridors along river Ganga. “For farmers to adopt natural farming, a comprehensive package for the participation of state governments and MSMEs is to be introduced,” Sitharaman said.

States have also been encouraged to revise the syllabus of agricultural universities to include natural, organic farming, and modern-day agriculture.

“This is a big step in ensuring healthy produce for Indians and making our agriculture export-ready. Especially for premium markets like Europe, the USA, Japan, etc,” says Agarwal of AgriBazaar.

“The overall thrust of the Union Budget 2022 seems to be towards building a more robust and resilient agriculture sector through modern technological interventions and incentivising investments. A new focus is on digital and other cutting-edge technologies, such as drones, delivered through the agency of new-age agritech start-ups and other private partners,” says Pravesh Sharma, Director of the agritech platform Samunnati Agro.