Hero Image

Union Budget 2023-24 must encourage public private partnerships for improved R&D in agriculture sector

By Dr KC Ravi

Indian agriculture is on the threshold of a quantum jump towards sustainability and resilience. A series of enabling measures taken in the recent past have infused a lot of vitality in agriculture.

The government has been largely successful in pushing farm incomes higher through better minimum support prices (MSP), but there is a long way to go still.

In view of ever growing input costs, which put farmers to extra financial exposure, the Union Budget 2023-24 should consider reducing the Goods and Services Tax (GST) on crop protection products, farm equipment, seeds and other inputs.

The GST rate on agro-chemicals should be lowered to 12%. This would help in lowering the prices of the agrochemicals and will ease burden on farmers.

Further, an enhanced outlay for PM-KISAN will also ensure farmers get more liquidity to buy inputs. The industry is also expecting that the Government should devise a special Production Linked Incentives (PLI) scheme for the agrochemical sector which will have a spiraling effect on boosting manufacturing in India.

Push to use of new technologies has drastically reduced the drudgery of farming operations. Emerging technologies such as drones and artificial intelligence (AI) are proving to be game changers. We are anticipating further impetus to use of technology including drones in agriculture, as a follow up of the previous year's announcements.

The proposed digital crop survey, which shall enable a shift from the old patwari system to a more robust AI/ML and GIS-GPS driven mapping of cropland, will not only benefit the Government but also the private industry. We are expecting some announcements in the Budget on this.

There is a lot of focus on R&D in many industries to perform better, however similar enthusiasm is not visible in the case of agriculture. Let us look at some of the numbers. In India, the share of agricultural research spending as a share of agricultural GDP is less than 0.35%. That is abysmally low.

A recent CGIAR report has underlined a cost-to benefit ratio of 10:1 from an increase in agricultural R&D. The positive impact of higher agricultural R&D spending is visible not only in soil quality and output, but also in agricultural incomes.

Therefore, the Union Budget-2023-24 should have adequate financial provisions to make our farmers future-ready. It should give further emphasis on R&D including encouraging public private partnerships (PPP). The government should consider providing a 200% weighted deduction on R&D expenses by agrochemical companies.

Government may consider providing this to those units who have minimum fixed assets of INR 50 crores & incurring expenses of Rs 10 crore. Agri Universities should engage with private sector industries for better synergies in a PPP mode.

Diversification of agriculture needs to be promoted in a mission mode in order to deal with increasing pressures from climate change, soil erosion, biodiversity loss, depleting water tables. A mix of policy push and incentives to farmers shall be required. A further impetus to exports of our horticulture products through policy and financial incentives, in keeping with Hon Prime Minister, Sri Narendra Modi's emphasis on Local for Global, will benefit both farmers and industry.

If we have to become a global hub in agriculture, the Union Budget 2023-24 can be an opportunity to focus on technology, R&D, PPP and also in developing Agritech Entrepreneurs. We urge the government of India to implement a science-based, progressive and predictive regulatory regime for the sector to achieve its true potential and become Atma Nirbhar.

(The author is chief sustainability officer, Syngenta India Pvt Ltd)