Budget 2022: FM banks on agri-tech, drones and startups for farm growth

Updated on Feb 02, 2022 06:36 AM IST
The Modi government, in December 2021, cancelled three pieces of agricultural legislation after nearly 13 months of widespread protests by peasants.
The Budget proposed to ramp up drone-based technologies in agriculture, digitisation of land records, and spraying of insecticides and nutrients. (PTI)
The Budget proposed to ramp up drone-based technologies in agriculture, digitisation of land records, and spraying of insecticides and nutrients. (PTI)
By, Hindustan Times, New Delhi

Finance minister Nirmala Sitharaman on Tuesday pushed for an array of digital technologies and use of drones to propel growth in the farm sector, which has seen large protests by tens of thousands of farmers seeking income guarantees from sale of farm produce.

The Modi government, in December 2021, cancelled three pieces of agricultural legislation after nearly 13 months of widespread protests by peasants. The three laws were the cornerstone of the government’s reforms in the farm sector, which employs nearly half all Indians. The scrapped laws were designed to free up restrictions in farm trade and allow traders to stockpile large quantities of farm produce for future trade. They also sought to lay down a national framework for contract farming.

While big-ticket measures or interventions were expected to enable the government achieve some of those goals, the Union Budget chose the tech route to boost the sector.

Presenting the Union Budget 2022-23, Sitharaman announced a new scheme in partnership with the private sector for the delivery of digital and hi-tech services to farmers. The scheme aims to channelise public-sector research along with private agri-tech players in the agricultural value chain, the finance minister said.

The Budget also made a provision of 60 crore under the “digital agriculture” head of allocations, and the government will launch a fund with blended capital to finance start-ups for agriculture and rural enterprises, focusing on the farm-produce value chain, the FM said in her speech.

The government hopes these start-ups will support for farmer coops, machinery for farmers on rental basis at the farm level and technology including IT-based support.

It proposed to ramp up drone-based technologies in agriculture, digitisation of land records, and spraying of insecticides and nutrients.

“Use of ‘Kisan Drones’ will be promoted for crop assessment,” the FM said in her Budget speech.

In all, allocation for the agriculture ministry saw a marginal increase from Budget 2021-22 estimates of 1,23,017.57 crore to 1,24,000 crore for 2022-23. Compared to revised budgetary estimates for 2021-22 for the agriculture ministry, which according to the Budget documents stood at 1,18,294.24, allocation for 2022-23 has gone up by 4%.

Experts say that drones, or unmanned aerial vehicles, could prove transformative for Indian agriculture, making farming smart and efficient, but caution that the costs involved are still high and prohibitive for smaller landholders. Though farm incomes are low (about one-third of those of non-agricultural households), those actually using advanced technologies are less than 1% of farmers.

Experts also point to a peculiar problem. Data shows that high-tech has spread fast in manufacturing -- a process called technology diffusion. For instance, according to the World Bank’s estimates cited by its president Jim Yong Kim in a 2016 speech, automation threatens 69% of today’s jobs in India. In agriculture, however, innovation is still bottled up at the top because most land parcels (plots) are too small, hurting long-term productivity growth.

“The push for drone technologies must be read with recent initiatives of the agriculture ministry to virtually make purchases of agricultural drones by institutions free of cost with upfront grants. The Budget’s aim is to popularise new technologies to increase farm productivity,” said Neelank Misra of Aggrow, a farm-tech startup.

In a move aimed at recycling agricultural waste, which could generate additional income for farmers, Sitharaman also said that 5-7% biomass pellets will be co-fired in thermal power plants, resulting in carbon savings of an estimated 38 MMT annually. “This will also provide extra income to farmers and job opportunities to locals and help avoid stubble burning in agriculture fields,” she said.

The finance minister added the government will promote chemical-free natural farming throughout the country, with a focus on farmers’ lands in 5km wide corridors along river Ganga in the first stage.

She also proposed a new scheme to reduce India’s costly import of cooking oil. The country imports up to two-thirds of its edible oil because output is not enough to meet domestic demand.

Farm leaders demanding a legal guarantee for minimum support prices (MSP) for farm produce criticised the Budget. “This was the sixth year by which the government had promised to double farmers’ income. In this year, when it was about accounting for the six years, there is complete silence. The budged has been characterised by silence…no allocation and no declaration,” said Yogendra Yadav, a leader of Swaraj India and a key figure behind last year’s farmers’ agitation against the Centre’s now-scrapped farm laws.

The finance minister said a comprehensive package for farmers to adopt suitable varieties of fruits and vegetables as well as production and harvesting techniques would be launched in partnership with states.

“Don’t forget, the finance minister has hit all the right buttons, envisaging crop diversification and higher incomes from fruits and vegetables,” said NK Singh, an economist and chairman of the 15th Finance Commission.

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  • ABOUT THE AUTHOR

    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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