The government is drafting a plan to encourage value addition in agriculture, which might enhance farmers’ incomes, as part of its efforts to assure the sector’s continued development following the repeal of agricultural legislation late last year.
The strategy’s overall goal, according to officials, is to create backward links to the farm. The specifics will most likely be revealed in the February 1 budget.
A government official explained, “The main objective is to provide support for investments to promote value addition and backward connections.”
“This would also include export assistance to assist Indian farmers in finding markets for their goods,” the official added. There are likely to be additional transportation, marketing, and branding advantages for exports of a variety of agriculture products. With a new specialised ministry in place, steps to enhance the cooperative segment are also planned.
In addition to the 10,900 crore production-linked incentive (PLI) plan for food processing, the government is considering additional incentives to encourage the development of essential storage and logistical infrastructure. The food processing sectors’ gross value added (GVA) contributed for 11.38 percent of the GVA in agricultural and associated industries.
This percentage is something the government wishes to increase.
“Value addition and farm produce exports can go a long way toward assuring more sustainable export growth, especially if we can minimise our reliance on water-guzzlers like rice,” said Aditi Nayar, ICRA’s chief economist. According to the official, a comprehensive support plan to help farmers who rely on a single crop diversify their income through assistance from research and development as well as credit support is also being discussed. “Demand-driven activities must be prioritised by policies. More crucially, policies for each agro product should now be developed with the word “global” in mind, rather than “regional” or “local.” “Mahindra & Mahindra’s chief economist, Sachchidanand Shukla, stated.
He believes it is past time for the processing business to be linked to retail, speeding up farm-to-fork pathways and putting more money in farmers’ purses. He went on to say that the government “must expedite or incentivize investments in logistics, especially cold storages.”
In 2015-16, Prime Minister Narendra Modi declared an objective of doubling farmers’ incomes by 2022-23, but the pandemic has made that goal impossible to achieve. In the current fiscal year’s budget, Finance Minister Nirmala Sitharaman announced nine initiatives for the agriculture sector, including raising the farm loan target to $16.5 lakh crore.