Union Budget 2026 | Sowing the seeds of prosperity in agriculture

The Union Budget 2026-27 focuses on four interlinked priorities for agriculture: productivity, quality, climate resilience and sustained income.

The first of these is improving productivity, getting more out of the same land.

Stagnant cultivated area and an increase in per capita income, from Rs 24,000 in fiscal 2005 to Rs 1,84,000 in fiscal 2024, have turned productivity into the agricultural sector’s focus area. While total output remains solid, key crops lag global benchmarks: cotton (‑24 %), maize (‑26.6%) and tomato (‑59%).

Technology push: The budget lifts the Namo Drone Didi allocation seven‑fold to Rs 676 crore, moving drones from pilot programmes to large‑scale services that sharpen input timing and reduce waste. Bharat VISTAR receives Rs 150 crore to blend artificial intelligence (AI)‑driven advisories with AgriStack and Indian Council of Agricultural Research (ICAR) data.

Livestock: A two‑pronged plan targets milk yields, seeking to raise the average from 3‑5 litre per day to the global range of 7‑8 litre.

Second is to go beyond volume-led growth to quality.

Horticulture now generates 369 million metric ton (MMT) of output (more than foodgrain at 354 MMT), yet post‑harvest losses erode earnings.

The budget raises funding for Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) and PM Kisan Sampada Yojana by roughly 13% and 41% respectively, directing money to micro‑food‑processing units, pack‑houses, ripening chambers and refrigerated transport.

Third is to engender climate resilience by preparing for riskier weather regimes.

The Bharat VISTAAR advisory platform will deliver hyper‑local, climate‑smart recommendations to marginal growers, helping them adjust sowing dates, crop choices and input use in real time.

Further, to reduce dependence only on income from crops, the budget makes allocations towards fisheries and livestock segments.

Fourth is income sustenance through diversification away from staples.

Nearly 40 % of the cropped area remains locked in paddy and wheat, exposing farmers to price volatility and water stress. The budget revives focus on high‑value and plantation crops, notably coconut and cashew.

The Union Budget signals a shift from merely managing output risk to confronting income risk through higher productivity, diversification and climate-smart interventions.

(The author is President, Crisil Intelligence)