Budget 2021 is all set to be presented to the nation by Finance Minister Nirmala Sitharaman on 01 February 2021. Though every sectoral allocation, be it industrial production, foreign trade, infrastructure development, jobs, etc., will be keenly watched by the industry and economists, one sector stands out in terms of the Government’s unrelenting push for reforms and progress – the agriculture sector.
The Modi Government has promised to double farmers’ income by 2022 and with the on-going farmer’s unrest, this year’s budget is expected to offer high allocation for the farm sector. The Government enacted three laws – the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act 2020, Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act 2020, and the Essential Commodities (Amendment) Act 2020 – intended to bring barrier-free trade of agriculture produce. However, a section of farmers and unions they represent are yet to be convinced about the need and efficacy of these reforms.
Considering the economic losses suffered by farmers because of the COVID pandemic, the Government is expected to announce several safety nets to the sector to make its agrarian reforms a success.
What the agriculture sector constitutes in 2021
India’s 118.7 million farmers, over half of its population, depend on income from agricultural produce for livelihood. The pandemic and the unprecedented nation-wide lockdown have left them with no choice but to sell their produce either at cheap prices or destroy it.
However, the sector has evolved over the years, with many startups coming up specifically enamored with Artificial Intelligence (AI) and Machine Learning (ML) driven data and agricultural tools to improve productivity and sustainability along with profitability in farm operations. Their services range from AI-based SaaS stack for land preparation, sowing/transplantation, crop management, predictive solutions for pest control to catering to the entire market supply chain of financing, processing, transporting, and trading of farm produces. Companies like Unnati provides app-based access to agri-finance and buyers as well as knowledge support through their predictive analysis tools. The Government is also supporting the sector with its policies like Atma Nirbhar Bharat Abhiyaan.
Who are all can benefit?
Companies engage in the following activities can benefit hugely with an expected boost in the rural and farm sectors:
- Development of farm and related activities
- Development of storage and warehousing activities
- Irrigation and mechanization technologies
- Usage of AI and digital technologies in the farm sector
- Easier and quicker loans for farmers
The Economic Survey 2021 released on January 29 stated that the reforms brought out by the Government in the agriculture sector are overdue and will lead the nation toward the creation of ‘One India One Market’. In this context, we can expect a very liberal approach to the sector, in terms of the financial boost from the Government.
Madhur Singhal, Practice Leader, Agriculture