What the Budget can prioritise for climate action in agriculture

What the Budget can prioritise for climate action in agriculture

In 2024, we breached the 1.5-degree Celsius warming limit for the very first time. About 8 per cent of the world’s farmland is expected to become unsuitable for agriculture due to climate change. Agrarian economies are likely to be hit the hardest. A dip in crop production and decreased nutritional quality of rice and wheat are expected.

Additionally, Indian agriculture supports the livelihoods of 42 per cent of the population and contributes 18.2 per cent of the GDP, as of 2023-24. However, with around 50 per cent of cultivated land relying on rainfall, the sector is acutely vulnerable to climate variability.

Public spending towards agriculture and climate has been central to the National Action Plan on Climate Change (NPACC), 2008. The National Water Mission and the National Mission on Sustainable Agriculture are two critical missions under the NAPCC for derisking Indian agriculture.

Additionally, the central government also has schemes to increase irrigation coverage and improve on-farm water efficiency, both critical for climate action. Rashtriya Krishi Vikas Yojana – Per Drop More Crop (PDMC) has covered 67.46 lakh hectares under micro-irrigation from 2015-16 to 2021-22.

Moreover, the Pradhan Mantri Fasal Bima Yojana has insured farmers against climate-induced crop losses, approving 56.96 crore applications and disbursing ₹1,54,469 crore in claims. Last year, PM Modi also introduced 109 high-yielding, climate-resilient, and biofortified crop varieties.

The 2025-26 Budget will pose the opportunity to build climate resilience in Indian agriculture through a strategic, integrated approach. Three priorities would be critical for climate action — safeguarding key resources like water and soil, promoting sustainable farming practices, and harnessing technology, open data, and digital platforms.

Safeguarding resources

Groundwater supplies 78 per cent of India’s net irrigated area, but a 2023 UN report highlights severe groundwater depletion in many regions. India’s soils are also deteriorating, with 96 to 120 million hectares already classified as degraded, and half of the country’s arable land lacking sufficient soil organic carbon. Last year, only ₹35 crore — 0.02 per cent of the Agriculture Ministry’s total budget — was allocated for soil and water conservation. An increase in budget allocation for soil and water conservation is paramount. Continued funding for intersectional schemes such as PDMC, Atal Bhujal Yojana (groundwater management), and MGNREGS (rural natural resource management) is vital.

The Budget must also promote coordinated action among agriculture, water, and rural development departments. Continued support for the PM Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth, which redirects fertilizer subsidies to sustainable land management, can help reduce dependence on fertiliser and pesticide while improving soil health.

Boost climate adaptation

A critical expectation from the upcoming budget will be a revival of the National Adaptation Fund on Climate Change (NAFCC) established in 2015 by the Government of India. Implemented by the National Bank for Agriculture and Rural Development (Nabard), the NAFCC assists vulnerable States and Union Territories to meet the cost of adaptation.

However, since its inception, the fund saw drastic budget cuts, from ₹115.36 crore in 2017-18, to ₹34 crore in 2022-23. Additionally, boost to natural farming through increased funding for the National Mission on Natural Farming (NMNF) is expected. This programme was announced in 2023 to help 100 million farmers shift to natural farming within three years via the mission, supported by 10,000 bio-input resource centres.

However, the last budget reduced NMNF funding by 20 per cent. It is important to note that in last year’s Budget, the government prioritised major irrigation projects as a key adaptation strategy along with agriculture research, climate-resilient crops, natural farming, pulses, oilseeds, vegetables, supply chains, digital infrastructure, and shrimp production. Continued focus on these aspects will be critical for adaptation of the agriculture sector.

Support for improved data systems

In recent years, the government has shown an interest in improving data systems and accessibility to aid policymakers in reaching remote areas. Under the Digital Agriculture Mission, the 2023-24 Budget introduced AgriStack, a Digital Public Infrastructure initiative that tracks farmer data, such as land records, livestock, crops, and benefits, assigning each farmer a unique ID. Through integration with the JanSamarth portal, AgriStack has reduced scheme access time to 30 mins in a paper-less online format, compared to 15-20 days it used to take earlier.

However, technical literacy of users can be a major hindrance and efforts to build capacity in this regard will be critical in the coming years. In the upcoming budget, the government should focus on the integration of aspects like water availability and irrigation for AgriStack to become a holistic solution.

Neog is engagement manager, Mehta is agriculture specialist and Pujahari partner and lead, Agriculture Practice Area, at Sattva Consulting



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