Agriculture & Farmers Welfare: Union Budget 2026-27

I. Introduction

The role of the agriculture sector is paramount in achieving food security and inclusive growth. Through technology, sustainability, and diversification, agriculture and its allied sectors are playing a key role in the economic development of India. However, climate change is impacting crops like paddy, wheat and maize to a considerable extent. In view of the same, Small and marginal farmers are not receiving expected returns from their produce. According to the Economic Survey 2025-26, during 2020-24, the average growth in Gross Value Added (GVA) in the agriculture Sector was registered at 4.7%, while it was 4% in crops,6.1% in Livestock and 7.2% in Fishing & Aquaculture.

As a part of government policy and institutional support, even though the government is implementing best possible measures such as input support and income support, self-sufficiency in the agricultural sector is yet to be achieved. Even today India depends heavily on importing fertilizers, seeds, pulses and edible oils.

II. Union Budget 2026-27: Priorities for Agriculture

To increase farmers’ income levels and employment potential through modernization of agricultural practices, the Union Budget 2026-27 prioritized high-value agriculture and technologies. A digital tool called Bharat-Vistar was announced in this budget to provide crop related information to farmers in their own language. 2.7% of the total budget expenditure has been allocated to the Department of Agriculture. Compared to the revised estimates of 2025-26, the amount allocated to the Department of Agriculture in 2026-27 shows a 6% increase.

The government emphasised in this budget its aim to achieve self-sufficiency in the development of agriculture and horticulture sectors, as well as in cashew and coconut cultivation. As at the end of 2023, the import value of coconut, Brazil nuts, and cashew nuts was at $3,354.89 million. To reduce cashew imports, the government proposes to encourage domestic production of cashew through modern technologies to meet the domestic needs and as well to export the surplus. These exports would facilitate to earn foreign exchange The government intends to encourage sandalwood plantations with the cooperation of state governments. Currently, sandalwood agriculture is occurring in 17,432 hectares. Karnataka holds 70-80% share of this and the rest is by Tamil Nadu, Kerala, Andhra Pradesh, and Maharashtra.

The government proposes to increase the area of sandalwood cultivation in this budget. The budget proposes to encourage the Rural youth to set up Agri-tech startups. In this direction the government proposes to make value-added changes in storage and packaging, which would increase farmers’ income considerably. By establishing processing units, the government aims to achieve self sufficiency in cashews and related products. With financial assistance and training for farmers, expensive dry fruit cultivation is proposed to be expanded. Currently, this cultivation exists in Kerala, Goa, Maharashtra, Andhra Pradesh, and Odisha. Further to enhance the income of the farmers , the government is prioritizing high-value agriculture like coconut, cocoa, and cashew. The government would also like to encourage almonds, pine nuts, walnuts cultivation in hilly areas and agarwood in the Northeast states.

III. Critical Gaps & Challenges

It is not uncommon that farmers may face several problems while undertaking high-value crops cultivation. Huge Investments are required for drip irrigation, fertilizers, pesticides, and poly houses. Several challenges are required to be overcome which includes:

• Low awareness of modern technology among farmers
• Limited presence of Farmer Organizations (FPOs)
• Price fluctuations and lack of storage facilities

Budgetary Omissions:

The Budget didn’t address the following important problems in the Agriculture and Farmers welfare . Some of them are furnished below:

• There is no mention of Minimum Support Price (MSP) rationalization, APMC market reforms, or regulation of contract farming.
• The budget lacks adequate schemes and skill development to attract youth toward agriculture.
• No specific measures were announced regarding Climate Resilience.

We have already learnt lessons from the past that promoting high-value crops without proper policy support and infrastructure would lead to regional inequalities. Hence, there is a dire need for government investment in backward areas for irrigation and cold chains. Concerns still remain unresolved in the important areas like ever increasing debt burden, neglect of rural laborers, stagnation of funds for agricultural research etc., The budget provides only a nominal relief to small and marginal farmers. We have to wait and see how the present budget would promote rural entrepreneurship and facilitate inclusive growth at the backdrop of unprecedented natural disasters by making use of the digital tools.

[Dr Tamma Koti Reddy is the Vice Chancellor (Incharge), ICFAI Foundation for Higher Education (A Deemed to-be-University), Hyderabad]