Agri stocks surged upto 11 percent after the Finance Minister announced measures to bolster agricultural productivity and strengthen production of pulses and oilseeds in the Union Budget of 2024. In addition, Sitharaman also announced an allocation of Rs 1.52 lakh crore for agriculture and allied sectors.
Following the announcement, shares agri-related companies- Kaveri Seeds, Jain Irrigation Systems, Mangalam Seeds, JK Agri Genetics, Nath Bio-Genes, Dhanuka Agritech, ShreeOswal Seeds soared 2-11 percent.
The reaction was driven by the government fulfilling the industry's expectations of a continued support to lift farmer income and lift the rural economy.
Sitharaman also highlighted the productivity and resilience in agriculture, focus on developing climate resistant varieties, release of new 109 high yielding and climate resistant varieties for cultivation as the first priority of this Union Budget.
T Manish, Research Analyst, SAMCO Securities named companies like Kaveri Seeds, Dhanuka Agritech as the key beneficiaries of this announcement.
Moreover, the finance minister also announced focus on agriculture research to raise productivity and promoting climate resilience while also strengthening production of pulses and oilseeds.
Meanwhile, in addition to the interim budgets' announcements about the Atmanirbhar Oilseeds Abhiyaan, a strategy will also be formulated to achieve self reliance on oilseeds such as mustard, sesame, sunflower, groundnut and soybean, the finance minister announced.
"We will promote farmer producer organisations, cooperative and startups. We will also use digital public infra in agriculture for coverage of farmers and lands in three years," the finance minister stated.
Inflation, aggravated by climate change, remains a major pain point for the agriculture industry. To address this, the industry was also expecting the government to announce incentives for key crops to boost farmers' incomes and tackle food inflation.
Despite hopes for improved rural consumption, recovery has been sluggish due to adverse weather and the rapid impacts of climate change, putting pressure on the agrochemical industry's financials. The industry is relying on government support through schemes and incentives to boost rural consumption and revive the economy.
Despite hopes for improved rural consumption, recovery has been sluggish. Adverse weather conditions and the rapid impacts of climate change have also put pressure on demand, keeping the agrochemical industry's financials under strain in the near term. Given this challenging backdrop, the industry was relying on the government to provide support to boost rural consumption and the broader economy through various schemes and incentives.
Also Read | Budget 2024: Agri industry hopes for measures to bolster infrastructure, increase production
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