Rebuilding India’s Agriculture for Resilience and Growth

• 04 Feb 2026

This editorial is based on “Budget implications for the agriculture sector” which was published in The Hindustan Times on 02/02/2026.The article examines India’s shift from subsidy-driven agriculture to infrastructure, technology, and value-chain–led growth. It highlights both opportunities and structural challenges in building a resilient and income-stable farm sector.

For Prelims: ZBNF,PMFBY, Agriculture Infrastructure Fund,Minimum Support Price,AgriStack. 

For Mains: Development in agriculture sector, Key issues in agriculture sector, Measures needed to strengthen agriculture sector.

India’s agriculture is undergoing a quiet structural transition from a subsidy-centric, production-focused system to one increasingly shaped by infrastructure, logistics, and digital governance. Budget 2026–27 deeper push to ports, warehousing, AI-enabled advisories, and export facilitation is redefining how farm value is created and captured. This reflects a policy shift from farm support to market enablement, with implications for income stability, diversification, and global competitiveness. However, muted investments in irrigation and agricultural R&D raise concerns about resilience in an era of climate volatility and resource stress.

What are the Key Developments Shaping India’s Agriculture Sector?

• Strategic Pivot to High-Value Plantation Crops: Moving beyond food security staples, the Budget 2026-27 aggressively promotes high-value "money crops" to boost farm incomes and reduce import dependence.  
  • The policy targets coastal and hill economies specifically, incentivizing the cultivation of nuts and plantation crops to capture premium global markets and create import substitution for raw materials like cocoa and cashew.  
  • For instance, the Budget has called for a dedicated Coconut Promotion Scheme.  
    • To rejuvenate old, low-yielding orchards and expand high-density cultivation of walnuts, almonds and pine nuts, the Budget proposes to support a dedicated programme to enhance farmer incomes and in bringing value addition by engaging youth. 
    • Also, under the National Fibre Scheme, focus has been placed on fibres such as silk, wool and jute, which will provide direct benefits to farmers associated with these sectors. 
• AI-Integrated Digital Extension: The launch of "Bharat-VISTAAR" marks the transition from static data collection to active, AI-driven advisory services. By integrating the "AgriStack" (farmer registry) with ICAR's scientific data, this multilingual platform aims to democratize precision farming, offering real-time, location-specific advice to bridge the massive lab-to-land information gap.  
  • The Budget 2026 allocated ₹150 crore specifically for Bharat-VISTAAR to operationalize this AI framework. 
• Structural Shift to Allied Sectors: The Economic Survey 2025-26 highlights a decisive structural transformation where livestock and fisheries are becoming the primary engines of agricultural growth, outpacing the crop sector.  
  • This "diversification by default" acts as a vital insurance against monsoon volatility, stabilizing rural incomes even when traditional crop outputs decelerate.  
  • For instance, Livestock recorded a 12.77% CAGR at current prices between FY15–FY24, with GVA rising nearly 195%. 
  • Moreover, fish production has increased to 197.75 lakh tonnes in FY 2024-25 from 95.79 lakh tonnes in FY 2013-14, boosting rural incomes and employment diversification. 
• Blue Economy Integration & Value Chain Expansion: The government is industrializing the fisheries sector by integrating inland water bodies into formal value chains to boost "Blue Growth."  
  • The focus has shifted from mere catch volumes to processing and export competitiveness, treating fishing vessels as effectively "mobile export units" to maximize foreign exchange earnings. 
  • For instance, Budget 2026 proposes integrating 500 reservoirs and Amrit Sarovars into the fisheries value chain. It also declared fish catch by Indian vessels in the Exclusive Economic Zone (EEZ) as duty-free, aiming to boost marine exports. 
• Export Resilience Amidst Protectionism: Despite global trade barriers and tariff wars , Indian agri-exports have shown remarkable resilience, pivoting towards non-traditional markets and processed goods.  
  • The strategy involves decoupling from volatile bulk commodities (like wheat) to focus on high-value, tariff-resilient products like coffee and processed fruits, ensuring trade surplus continuity.  
  • For instance, during the financial year 2024-25, India's coffee exports reached $1.80 billion, marking a 40.2% growth over the $1.28 billion achieved in FY 2023-24. 
    • Also, India is the world's largest producer of millets with a share of 38.4% of world's production (FAO, 2023). 
• Institutionalizing Natural Farming: The push for Natural Farming has moved from a pilot project to a "Jan Bhagidari" (mass movement) to permanently reduce the fertilizer subsidy burden and restore soil health.  
  • However, the approach is now cluster-based and market-linked, aiming to create a distinct value chain for chemical-free produce rather than just an input-reduction strategy.  
  • The National Mission on Natural Farming received ₹750 crore in Budget 2026-27 to support bio-input resource centers. It aims to cover 1 crore farmers to supply the growing organic export market. 
• Women at the Helm of India’s Precision Farming Revolution: Namo- Didi scheme is successfully creating a new stratum of "rural technical workforce" among women, addressing both labor shortages and the need for precision application of nano-fertilizers.  
  • It represents a sociological shift where women are not just farm laborers but asset owners and technology providers, altering the power dynamics in rural agrarian economies. 
  • With a ₹1,261 crore outlay, the scheme is deploying 15,000 drones to Women SHGs. These drones cover 1 acre in 7 to 8 minutes, allowing SHGs to earn rental income while reducing fertilizer consumption through precise spraying. 
  • Also, the Union Budget has proposed SHE-Mart to promote Self-Help Entrepreneurs, establishing community-owned retail outlets in every district to market products made by women and SHGs, enabling women in agriculture, animal husbandry, and allied sectors to transition from subsistence work to entrepreneurship. 
• The Collectivization Wave via FPOs: Smallholder fragmentation is being aggressively countered by the "10,000 FPO" scheme, which is successfully shifting farmers from "price takers" to "price makers" through collective bargaining.  
  • This institutional innovation is now maturing, moving beyond mere registration to actual business integration, enabling direct market linkages and value addition at the farm gate.  
  • As of December 2025, ₹430.77 Crore has been distributed to 6557 FPOs as a matching equity grant and credit guarantee cover worth ₹662.71 Cr is issued to 2671 FPOs. 

What are the Key Issues Associated with India’s Agriculture Sector?  

• The "Climate-Insurance" Asymmetry: A critical policy paradox exists where the frequency of extreme weather events is outpacing the state's fiscal capacity for compensation.  
  • While the "climate shock" has become a permanent feature disrupting crop cycles, the budgetary allocation for insurance (PMFBY) is seeing real-term consolidation, forcing a reliance on "adaptation" over "compensation," which leaves smallholders vulnerable to immediate liquidity crunches.  
  • For instance, in 2025, India faced extreme weather on 331 of 334 days, damaging 17.4 million hectares of crop area.  
    • Yet, the Budget 2026-27 allocated ₹12,200 crore for PMFBY, a reduction from revised estimates. 
• Disguised Unemployment & Labor Stagnation: Despite the structural transformation of the broader economy, the agriculture sector continues to absorb a disproportionate share of the workforce, signaling "disguised unemployment."  
  • The failure of the manufacturing sector to pull labor out of farms has led to a scenario where rising agricultural output does not translate into rising per-capita farm income, as the revenue pie is shared among too many dependents.  
  • The Periodic Labour Force Survey (PLFS) 2025 revealed that 57.7% of the rural workforce is still engaged in agriculture, an increase from previous years, this effectively suppresses rural wage growth. 
• Skewed NPK Ratio & Soil Fatigue: The heavy subsidization of Urea has distorted the nutrient application ratio, leading to severe soil toxicity and stagnation in yield growth ("soil fatigue").  
  • Farmers over-apply cheap nitrogen while neglecting phosphorus and potassium, creating a "yield barrier" where applying more fertilizer no longer results in proportional crop output, threatening long-term food security for short-term gains.  
    • For instance, the Economic Survey 2025-26 flagged the N:P:K consumption ratio at a skewed 10.9:4.1:1 (against the ideal 4:2:1). 
• The MSP-Procurement Disconnect: The demand for a "Legal Guarantee for MSP" stems from the market failure where open market prices often crash below production costs during peak harvest.  
  • However, the current procurement infrastructure is heavily skewed towards wheat and rice in limited geographies (Punjab, Haryana), leaving farmers of pulses, oilseeds, and coarse grains in other states effectively outside the safety net despite "paper MSPs."  
  • For instance, while the government announced MSP hikes for 22 crops in 2025-26, actual procurement remained negligible for crops like oilseeds. 
• Fragmentation & Scale Inefficiency: The continuous subdivision of land across generations has reduced the average operational holding to a size where mechanization becomes economically unviable.  
  • This "atomization" of land prevents economies of scale, making modern inputs (like precision irrigation or harvesters) too costly for the individual farmer, thereby trapping them in a low-input, low-output equilibrium. 
  • The average landholding size has shrunk to 1.08 hectares (2025 estimate), with 86% of farmers being Small & Marginal. Lower farm machinery utilization on these small plots is driving up production costs. 
• Post-Harvest "First-Mile" Gaps: While cold chain capacity is growing, the critical "first-mile" connectivity (farm gate to aggregation point) remains broken.  
  • Most post-harvest losses occur immediately after cutting due to a lack of near-farm packhouses and pre-cooling units, forcing farmers into "distress sales" to local traders rather than holding produce for better prices in the organized market.  
  • For instance, India loses approximately ₹92,651 crore annually to post-harvest losses (CIPHET data).  
• Edible Oil & Pulse Import Dependency: A major strategic vulnerability is India's continued reliance on global markets for essential proteins and fats.  
  • Despite "Mission Mode" interventions, domestic production of oilseeds and pulses fluctuates wildly with the monsoon, forcing the government to rely on zero-duty imports to control inflation, which paradoxically depresses domestic prices and discourages farmers from expanding acreage.  
  • For instance, India imported 16 million tonnes of edible oils for nearly Rs 1.61 lakh crore during the 2024-25 marketing year ended October to meet domestic demand, exposing vulnerability to global price volatility and forex outflows. 
  • Maharashtra’s tur (pigeon pea) output for the 2025–26 season was projected to fall by up to 40% due to severe crop damage caused by excessive rainfall, flooding, and waterlogging, potentially triggering a rise in imports to bridge the supply shortfall. 
• Groundwater Depletion & Energy Nexus: The free power policy for tubewells in major agrarian states has created a perverse incentive to mine groundwater, leading to an ecological crisis.  
  • This "Energy-Water nexus" encourages the cultivation of water-guzzling crops like paddy in semi-arid regions, depleting aquifers at a rate that is irreversible and effectively exporting water from dry states to the rest of the world.  
  • For instance, the Dynamic Ground Water Resource Assessment 2025 shows 10.8% of units (730 of 6,762) are over-exploited, while total stressed units (over-exploited, critical, and semi-critical) together account for ~25%. 
    • Also, while about 70% of Indian electricity is carbon-based, a quarter of the nation's consumption goes into agriculture. (Centre for Policy Research)

What Measures are Needed to Strengthen India’s Agriculture Sector?

• Universalizing Digital Public Infrastructure: The primary measure for modernization is the nationwide scaling of AgriStack to create a seamless digital ecosystem for every farmer.  
  • By integrating land records, crop surveys, and unique Farmer IDs, the government can enable "plug-and-play" access to formal credit, crop insurance, and customized advisory services.  
  • This digital backbone eliminates middlemen, reduces the credit-processing lag from weeks to minutes, and allows for precision-targeted benefit transfers that prevent leakage and ensure that aid reaches the actual tiller of the land. 
• Transitioning to Precision Agriculture via "Bharat-VISTAAR": A critical shift is needed from generic agricultural extension to AI-driven precision advisory through platforms like the newly proposed Bharat-VISTAAR.  
  • By leveraging real-time satellite imagery and multilingual AI, farmers can receive plot-specific recommendations on soil health, irrigation schedules, and localized pest alerts.  
  • This "Intelligence-as-a-Service" model helps smallholders optimize input use reducing the excessive application of urea and water thereby lowering production costs while simultaneously increasing yield quality and environmental sustainability. 
• Incentivizing "Market-Led" Crop Diversification: To break the ecologically damaging wheat-rice monoculture, India must implement a Productivity-Linked Incentive (PLI) for high-value and climate-resilient crops like oilseeds, pulses, and plantation crops (coconut, cashew, cocoa). 
  • Instead of just announcing MSPs, the state should develop regional Specialized Crop Boards that provide end-to-end support, from high-quality germplasm to guaranteed procurement for processing industries.  
  • This shifts the focus from "volume-centric" farming to "value-centric" entrepreneurship, aligning domestic production with global demand and reducing the massive import bill for edible oils. 
• Decentralized Post-Harvest Infrastructure and "First-Mile" Connectivity: Strengthening the sector requires moving value-addition closer to the farm gate through Village-Level Processing Hubs funded by the Agriculture Infrastructure Fund (AIF).  
  • Measures should prioritize "first-mile" logistics, such as solar-powered micro-cold rooms, pack-houses, and grading units managed by Farmer Producer Organizations (FPOs)  or SHGs.  
  • By reducing the post-harvest wastage in horticulture, farmers can bypass distress sales during peak harvest and gain the "holding power" necessary to negotiate better prices in the national and global markets. 
• Mainstreaming Climate-Smart and Natural Farming Practices: With climate volatility becoming a permanent risk, India must institutionalize Sustainable Agricultural Practices (SAPs) like Zero Budget Natural Farming (ZBNF) and high-density orcharding.  
  • This involves establishing a decentralized network of Bio-Input Resource Centers at the panchayat level to provide organic fertilizers and pesticides, reducing the financial and ecological burden of chemical inputs.  
  • Such measures not only restore soil organic carbon and groundwater levels but also help Indian produce meet the increasingly stringent "green" standards of international export markets. 
• Professionalizing the Allied Sector: As allied sectors now grow faster than crop farming, they require Industrial-Scale Institutionalization through dedicated value chains and credit-linked subsidies.  
  • Measures should include the creation of "Livestock FPOs" and the integration of inland water bodies (like Amrit Sarovars) into the formal blue economy for intensive aquaculture. Providing universal access to high-quality semen banks, mobile veterinary clinics, and digital traceability for dairy and meat products will ensure that these "monsoon-proof" sectors become the primary drivers of rural income stability and export growth. 
• Reforming Agricultural Credit through "Risk-Guarantee" Frameworks: To unlock private investment, the financial architecture must evolve from simple interest subvention to Credit-Risk Guarantee Funds.  
  • By providing partial guarantees to banks, the state can encourage lending to "high-risk" areas like agri-startups, climate-tech, and small-scale mechanization (drones/robotics).  
  • This de-risking of the sector attracts venture capital and encourages young "Agri-preneurs" to modernize the value chain, transforming farming from a subsistence activity into a technologically sophisticated and bankable business enterprise.

Conclusion

India’s agricultural future lies in value-chain deepening, digital intelligence, and diversification beyond water-intensive crops, not higher subsidies. AI-led advisories, first-mile infrastructure, and allied-sector growth can stabilize farm incomes against climate and price shocks. Achieving oilseed self-reliance, export-oriented processing, and groundwater sustainability demands a shift from price support to productivity-led reforms. 

A climate-smart, technology-driven, market-linked agriculture is vital for India’s food security and rural resilience.

Drishti Mains Question

India’s agriculture is witnessing a structural shift from crop-centric growth to allied sectors and value-chain–led development.Critically examine how this transition can enhance farm income resilience amid climate and market uncertainties.

 

FAQs

1. What is the key shift in India’s agricultural policy under Budget 2026–27?
From subsidy- and crop-centric support to infrastructure-, value-chain-, and market-led agriculture. 

2. Why are allied sectors becoming central to agricultural growth?
They are less monsoon-dependent, grow faster, and diversify rural incomes and employment.

3. What is Bharat-VISTAAR?
An AI-based multilingual digital advisory platform integrating AgriStack and ICAR for precision farming. 

4. What is the major post-harvest challenge in Indian agriculture?
First-mile infrastructure gaps, causing annual losses of over ₹92,000 crore.  

5. Why does edible oil import remain a strategic concern?
Price volatility raises import bills despite stable volumes, affecting farmers and forex stability.

UPSC Civil Services Examination, Previous Year Question (PYQ) 

Prelims:

Q. In the context of India’s preparation for Climate -Smart Agriculture, consider the following statements: (2021)

1. The ‘Climate-Smart Village’ approach in India is a part of a project led by the Climate Change, Agriculture and Food Security (CCAFS), an international research programme.
2. The project of CCAFS is carried out under Consultative Group on International Agricultural Research (CGIAR) headquartered in France.
3. The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) in India is one of the CGIAR’s research centres.

Which of the statements given above are correct? 

(a) 1 and 2 only 

(b) 2 and 3 only 

(c) 1 and 3 only 

(d) 1, 2 and 3 

Ans: (d)

Q. Consider the following pairs: (2014)

Programme/Project	Ministry
1. Drought-Prone Area Programme	Ministry of Agriculture
2. Desert Development Programme	Ministry of Environment and Forests
3. National Watershed Development Project  for Rainfed Areas	Ministry of Rural Development

Which of the above pairs is/are correctly matched? 

(a) 1 and 2 only 

(b) 3 only 

(c) 1, 2 and 3 

(d) None 

Ans: (d)

Q. In India, which of the following can be considered as public investment in agriculture? (2020)

1. Fixing Minimum Support Price for agricultural produce of all crops
2. Computerization of Primary Agricultural Credit Societies
3. Social Capital development
4. Free electricity supply to farmers
5. Waiver of agricultural loans by the banking system
6. Setting up of cold storage facilities by the governments

Select the correct answer using the code given below: 

(a) 1, 2 and 5 only 

(b) 1, 3, 4 and 5 only 

(c) 2, 3 and 6 only 

(d) 1, 2, 3, 4, 5 and 6 

Ans: (c) 

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Mains:

Q. Given the vulnerability of Indian agriculture to vagaries of nature, discuss the need for crop insurance and bring out the salient features of the Pradhan Mantri Fasal Bima Yojana (PMFBY). (2016)

Q. Explain various types of revolutions, took place in Agriculture after Independence in India. How have these revolutions helped in poverty alleviation and food security in India? (2017)