Answer

Introduction

Agricultural structural reforms, such as digital integration and market liberalization, aim for long-term productivity but often involve a “gestation period” of disruption. Without concurrent short-term income support, these shifts can alienate the farming community and erode trust in state policy. Recent Budget priorities reflect a strategic attempt to bridge this gap by blending high-tech structural shifts with a “continuity” of existing safety nets to maintain policy credibility.

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Examine with Reference to Recent Budget Priorities

• Digital Structural Overhaul: The Union Budget 2026-27 prioritized Bharat-VISTAAR, an AI-driven digital advisory tool, aiming to shift farming from traditional methods to data-driven precision.
  Eg: The integration of AgriStack and ICAR databases via AI is a structural reform intended to reduce crop failure risks.
• Diversification to High-Value Crops: Strategic funding was allocated to move farmers away from mono-cropping toward high-value segments like sandalwood, cocoa, and nuts.
  Eg: New promotion schemes for coconut and cashew are designed to build global premium brands by 2030.
• Continuity of Income Support: To offset the risks of these transitions, the government maintained the PM-KISAN allocation at ₹63,500 crore, providing a predictable cash cushion.
  Eg: Stakeholders noted that while new initiatives were few, the steady funding of PM-KISAN acts as a stabilizer amidst structural changes.
• Substantial Input Subsidies: Despite a marginal 3% decline, the fertilizer subsidy remained robust at ₹1.71 lakh crore to shield farmers from global price volatility.
  Eg: This ensures that the immediate “cost of production” does not spike while the government pushes for long-term structural efficiency.

Associated Concerns

• Muted Income Gains: Critics argue that “continuity” in income support (PM-KISAN) without an inflationary adjustment fails to address stagnant farm incomes.
  Eg: Activists point out that the Budget lacks a roadmap to ensure MSP realization for crops like soybean and cotton.
• Underutilization of Funds: Revised estimates for agriculture and allied sectors showed a drop from ₹1.59 lakh crore to ₹1.52 lakh crore, suggesting execution bottlenecks.
• Risk of Market-Linked Diversification: Moving to high-value crops increases farmer vulnerability to international market fluctuations without a dedicated price safety net.
  Eg: Diversification is seen as a “higher risk” strategy if not backed by enhanced insurance under PMFBY.
• Decline in Irrigation Outlays: Parring back funds for the Pradhan Mantri Krishi Sinchai Yojana (PMKSY) may weaken the foundation upon which structural productivity reforms are built.

Conclusion

Sustaining the credibility of agricultural policy requires a “hybrid model” where structural efficiency (AI, value chains) is reinforced by dynamic income support. The focus must shift from “expenditure-driven” to “outcome-oriented” support, ensuring that direct benefit transfers evolve alongside market reforms to prevent agrarian distress from stalling India’s Viksit Bharat goals.

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