Boosting Agricultural Exports: Budgeting for infrastructure, high-value crops, and ag-tech

India stands as a global agricultural leader.

By Anand Ramanathan 

Agriculture's share in India's economy has dropped below 15% due to the rise of the industrial and service sectors, yet its significance remains immense. With nearly three-quarters of Indian families relying on rural incomes, and the majority (some 770 million people or about 70 percent) of the nation’s poor living in rural areas, the agricultural sector is not just an economic pillar but a lifeline for millions.

India stands as a global agricultural leader, being the top producer of pulses (27.67  MMT 28% of Global Production), spices (11.14 MMT), milk (213 MMT 22% of Global production), and having the largest cattle herd. It also holds the largest cultivation areas for wheat, rice, and cotton, and is the second-largest producer of rice, wheat, cotton, sugarcane, farmed fish, sheep and goat meat, fruit, vegetables, and tea. Despite these accolades India's food security hinges on boosting cereal crops, fruits, vegetables, and milk production to meet the demands of growing population across different income strata. Therefore, a swift evolution towards a productive, competitive, diversified, and sustainable agricultural sector is vital.

However, while addressing domestic needs is essential, it is equally important for India to intensify its efforts on boosting agricultural exports. The global market, with its burgeoning demand for high-quality agricultural produce, offers a golden opportunity for India to establish itself as a leading agricultural exporter. This shift is not only economically advantageous but also essential to cater to the Indian diaspora settled abroad, who seek authentic Indian produce and products.

As India prepares for its upcoming budget, a prime opportunity emerges to elevate its agricultural exports to new heights. India's share is about 2.4 per cent in global exports and the government wants to increase it to 4-5 per cent over the next few years. By focusing on enhancing post-harvest infrastructure, investing in high-value and climate-resilient crops, and utilizing cutting-edge ag-tech innovations, the budget can usher in a new era of agricultural prosperity.

First and foremost, bolstering post-harvest infrastructure is critical. The wastage of produce due to inadequate storage and transportation facilities is a perennial challenge that hampers export potential. Fund allocation to build state-of-the-art storage facilities, efficient logistics networks, and robust supply chains will ensure that India's agricultural produce remains fresh and export-ready. This investment will not only reduce post-harvest losses but also enhance the quality and competitiveness of Indian products in global markets.

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Simultaneously, prioritizing high-value crops can transform India’s agricultural landscape. By focusing on crops with significant export potential, such as spices (Pepper, Cardamom, Chilli, Turmeric, Coriander, Cumin, etc.), organic produce, and exotic fruits (Rambutan, Mangosteen, Persimmon, Passion Fruit, Kiwi, Dragon Fruit, Fig, etc.), India can tap into lucrative global markets. The budget can provide the necessary impetus for this shift by offering financial incentives and technical support to farmers willing to venture into these avenues.

Climate change is no longer a distant threat; it is a present reality. The unprecedented summer heat is a stark reminder of this crisis. Developing an adaptation strategy is not optional—it is essential. Budget allocation for extension to promoting climate-resilient agricultural practices, investment in development of tolerant varieties, and enhancing access to financial services and technical advice should be considered. Targeted subsidies, research, and development initiatives can encourage farmers to diversify and embrace these climate-resilient crops, leading to increased incomes and economic resilience.

Moreover, embracing ag-tech innovations will revolutionize Indian agriculture. The integration of advanced technologies like precision farming, AI-driven analytics, and IoT can optimize farming practices, enhance yield, and ensure sustainable use of resources. This technological leap will not only boost domestic productivity but also enhance the appeal of Indian agricultural exports. States like Telangana and UP have developed state specific agri-tech policies to improve proliferation of ag-tech players. The budget should earmark funds for the development and deployment of these technologies, facilitating access for small and marginal farmers. Establishing ag-tech hubs, promoting start-ups, and fostering public-private partnerships can accelerate the adoption of these innovations, positioning India as a leader in agri-tech.

Tech can help in a lot of the initiatives that are being run by the government like the PMFBY (Pradhan Mantri Fasal Bima Yojana), PMKSY (Pradhan Mantri Krishi Sinchai Yojana), Soil Health Card, e-NAM (National Agriculture Market), KCC (Kisan Credit Card), PKVY (Paramparagat Krishi Vikas Yojana), RKVY (Rashtriya Krishi Vikas Yojana), ACABC (Agri Clinics and Agri Business Centres). By adopting technology, farmers can maximize the benefits of these government schemes, leading to improved agricultural productivity, better resource management, and enhanced income. Blockchain technology offers a robust solution to enhance the export potential of GI mapped crops like Tea from Darjeeling, Basmati from the Himalayan Foothills, Alphonso from Ratnagiri, Kalanamak rice from UP, Saffron from Kashmir, etc. Such technologies represent a transformative step towards promoting and marketing the country's hidden agricultural gems. By ensuring authenticity, improving transparency, simplifying certification, and building consumer trust, blockchain can help Indian farmers and producers tap into lucrative global markets.

In conclusion, the upcoming Indian budget holds the key to transforming the agricultural sector into a global powerhouse. By focusing on improving post-harvest infrastructure, subsidizing investment in high-value and climate-resilient crops, and providing a conducive ecosystem for expansion of ag-tech innovations and their proliferation at ground level. This infra-produce-tech trifecta can help India boost its agricultural exports, uplift rural incomes, and secure its place in the global agricultural market. The time is ripe for a visionary budget that paves the way for a thriving and resilient agricultural economy.

Anand Ramanathan is Partner and Consumer Products and Retail sector Leader at Deloitte India. 

Views are personal and do not represent the stand of this publication.