India prepares to unveil its Budget 2025, there is a growing need to ensure that interests of small and marginal farmers are at the forefront of agricultural policymaking. Agriculture remains the backbone of India’s economy, contributing approximately 18 per cent to GDP and providing employment to more than half the population. Beyond economic output, the sector is integral to the nation’s food and nutrition security, rural development, and socio-economic stability. India is among the world’s leading producers of food grains, horticultural crops, dairy products, and spices.

Despite these achievements, the vast majority of Indian farmers continue to face challenges that hinder their growth and prosperity. The agricultural landscape in India is dominated by small and marginal farmers, who constitute around 85 per cent of the farming community. These farmers, owning less than two hectares of land, are responsible for a significant portion of the country’s agricultural output. However, their limited resources, lack of access to modern technology, and inadequate knowledge about government policies often leave them struggling to sustain their livelihoods.

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The upcoming budget must address their concerns and ensure that they benefit from various government agricultural policies. Small and marginal farmers encounter numerous obstacles that prevent them from fully benefiting from government schemes and policies. While the government has introduced various programmes to support the farming community, the benefits often disproportionately favour larger farmers who have better access to information and resources. Some key challenges faced by small farmers include:

• Limited Access to Information: Many small farmers are unaware of government schemes and modern agricultural practices due to their limited education and lack of connectivity to extension services.

• Inadequate Financial Support: Although various financial schemes exist big farmers are mostly the ones taking all the benefits and small farmers often struggle to access credit from formal institutions.

• Dependence on Traditional Methods: Without adequate training, small farmers rely on traditional farming methods, leading to lower productivity and profitability.

• High Input Costs: The cost of seeds, fertilizers, pesticides, and other inputs remains a burden for small farmers, reducing their net income. Despite these challenges, there are certain government schemes, such as the fertilizer subsidy and Direct Benefit Transfer (DBT), that have proven to be effective in reaching even the smallest farmers. The upcoming budget should aim to enhance the reach and impact of these policies. One of the most critical areas for consideration in the budget is the allocation of substantial funds for farmers’ education.

Educating small and marginal farmers about government schemes, modern agricultural practices, and technology is essential for their empowerment. However, reaching out to 14 crore farmer families spread across 6.5 lakh villages is a colossal task that cannot be accomplished by public sector extension services alone that have limited resources. Public Private Partnership will be the most viable option for reaching such large numbers of farmers. The budget should include provisions to incentivize the private sector to participate in farmer education and awareness programmes.

One effective way to achieve this is by offering 200 per cent tax deductions to DST-recognized companies willing to contribute to farmer education. These companies can be allocated districts to ensure that private sector efforts are evenly distributed across the country. This district-wise allocation would enable private players to transfer the latest agricultural technologies and practices to farmers in their designated areas. Support can be extended to agricultural input companies, such as those involved in seed, fertilizers, drip irrigation, and crop protection products, which are already contributing to farmers’ productivity. However, due to limited resources, these companies are unable to reach a large number of farmers. Government assistance could significantly expand their outreach, thereby helping to double farmers’ incomes.

Currently, India’s per-hectare yield and agricultural GDP are far below that of developed countries and China. By empowering the farming community, which is highly dedicated and hardworking, we can unlock immense potential to boost both productivity and agricultural GDP. Such a public-private partnership would ensure that small farmers receive timely information and training on new technologies, crop protection methods, and government schemes. This, in turn, would help them increase productivity, reduce input costs, and improve their overall livelihoods. We appreciate the government’s initiative to provide 15,000 drones for agricultural use. However, it is concerning that only 500 drones were distributed last year. To ensure the swift adoption of this beneficial technology, it is imperative that the government expedites the distribution process.

Additionally, drones should not be categorized as luxury items and should not attract 18 per cent GST. These drones are proving to be a valuable tool for precision spraying of fertilizers and pesticides, ensuring the safety of farmers while significantly reducing water usage to just 10 liters per application. As a modern solution with proven benefits for farmers, the use of drones must be promoted at a much faster pace to bring about transformative changes in Indian agriculture. High input costs remain a significant challenge for small farmers. While fertilizers are heavily subsidized, other essential agricultural inputs, such as pesticides, agrochemicals, and modern equipment like drones, continue to be costly due to high taxes and import duties. To reduce the financial burden on farmers, the budget should consider the following measures:

• Lowering Taxes on Agrochemicals (which attract 18% GST): Pesticides and other agro-chemicals should be taxed at either nil or a maximum of 5 per cent, similar to the tax structure for fertilizers. Lowering these taxes would make crop protection products more affordable for farmers, enabling them to safeguard their crops against pests and diseases. Additionally, it would reduce the profit margins of duplicate and spurious products in the parallel market, thereby minimizing their prevalence. This, in turn, would help improve both the quality of inputs available to farmers and their overall crop yields.

• Reducing Customs Duty on Agrochemical Imports: The current customs duty on agrochemical imports is set at 10 per cent. Reducing this by half would make innovative crop protection solutions more accessible and affordable for Indian farmers. Certain groups are advocating for an increase in customs duty on agrochemical imports. Such proposals would directly raise input costs for farmers, particularly impacting small and marginal farmers. Any move that goes against the interests of these farmers should be firmly rejected, as it would only add to their financial burden and hinder their access to quality agricultural inputs.

• Encouraging the Use of Modern Equipment: The government should encourage the adoption of modern agricultural equipment like drones and micro-irrigation systems (drip and sprinklers) by lowering the current tax rates. At present, drones are taxed at 18 per cent and micro-irrigation equipment at 12 per cent, which makes these technologies expensive for small and marginal farmers. Reducing these rates to 5 per cent would make these essential tools more affordable, promoting their wider use. While subsidies on micro-irrigation are commendable, their benefits often fail to reach small and marginal farmers. Drones, in particular, can revolutionize farm management by helping farmers monitor crop health, apply fertilizers and pesticides with precision, and improve overall efficiency. Making such modern equipment affordable is key to enhancing productivity and ensuring sustainability.

The Prime Minister has adopted a zero-tolerance policy toward the quality of products, including agriinputs. In a statement on 26 November 26, 2024, Agriculture Minister Shri Shivraj Singh Chouhan reiterated that strict action would be taken against those involved in the manufacture and distribution of sub-standard agrochemicals, fertilizers, and seeds. This commitment to quality is essential, as ensuring that farmers receive high-quality inputs is crucial for their success. However, there is considerable distress among farmers, as reflected in their demands during the ongoing agitations, where the supply of quality agri-inputs is a key concern. The current state of agricultural inputs has caused significant hardship, and farmers’ concerns about the lack of reliable, effective products are more pressing than ever.

Despite the government’s strong stance, the implementation of this policy has not yet materialized effectively. Several acts, such as the Fertilizer Control Order (FCO), Insecticides Act (IA), and the Seed Act, exist to regulate the quality of agricultural inputs. However, the critical issue lies in the uneven enforcement of these regulations, particularly in the practice of sampling. Sampling is not being conducted uniformly across the industry, with data from various states revealing that it is being targeted at only a selective group of large companies. This uneven sampling undermines the very purpose of ensuring that quality agri-inputs are accessible to all farmers, further exacerbating the issues they face.

In the pharmaceutical sector, various steps have been taken to control and monitor the supply of counterfeit and sub-standard drugs. Similar measures should be adopted in the agricultural sector to ensure that farmers receive genuine agri-inputs of superior quality. Several measures can be taken to ensure quality inputs and include:

• Strengthening Regulatory Mechanisms: The government should not only strengthen regulatory mechanisms but also monitor the production and distribution of agricultural inputs by concerned authorities.

• Introduce Unique Identification Codes: Similar to the pharmaceutical sector, agricultural inputs can be assigned unique identification codes to track their authenticity and ensure traceability. The Government of India has already introduced a portal called SAATHI to monitor seeds. Additionally, the Ministry has decided to make it mandatory for pesticides as well; however, its implementation is not being effectively monitored. • Public Awareness Campaigns: Farmers should be educated on the importance of using quality inputs and how to identify genuine products. They should also be encouraged to purchase all agricultural inputs with proper bills. Additionally, leading companies have started printing QR codes on their products, and farmers should be made aware of the need to scan these codes to verify the authenticity of the products at the time of purchase.

India’s agricultural sector holds immense potential to contribute to the country’s economic growth and food security. However, to achieve this potential, it is crucial that Budget 2025 prioritizes the interests and benefits of the 85 per cent small and marginal farmers who form the backbone of Indian agriculture. While several government schemes have positively impacted big farmers, there is still a need to enhance the reach and effectiveness of these policies. Educating farmers, reducing input costs, and ensuring the availability of quality agricultural inputs will be key to achieving the ambitious goals set by our nation. By incorporating private-sector involvement and streamlining the processes, Budget 2025 can unlock greater opportunities for small farmers, helping them to overcome existing barriers, increase productivity, and contribute significantly to India’s agricultural growth.

(The writer is former Director of the Indian Institute of Maize Research and an expert in maize breeding and research.)