Shishir Priyadarshi and Omkar Dhanke
Climate change is reshaping every aspect of our lives, and its toll on agriculture serves as a wake-up call for India to act. The Budget 2025-26 must pivot decisively towards climate adaptation and mitigation, focusing on climate-resilient agricultural practices. This is necessary to ensure the long-term viability of India‘s agrarian economy and rural livelihoods.
The agricultural sector, providing livelihood support to 46% of the population yet contributing only 18.2% to GDP, faces challenges such as low productivity, fragmented land holdings, water scarcity, higher input costs, and post-harvest losses. Climate change aggravates these issues by affecting water availability, increasing heat stress, pest load, and soil degradation. The sector’s dependency on monsoons is also critical, with nearly 60% of the net sown area relying on rainfed conditions. Over the past five years, central and southern India have seen above-normal rainfall, while other regions experienced rainfall deficits. This variability influences and impacts crop selection, cropping patterns, and water and soil management.
India’s agricultural land – the backbone of the food system is struck harder by these challenges. It faces dual challenges – quantitative reduction and qualitative degradation. Marginal farms dominate the landscape (68.45% under one hectare), and rapid urbanization is reducing arable land. In 2021, per capita availability of arable land was just 0.12 hectares (World Bank). These challenges hinder farmers’ ability to mechanize production or adopt technological innovations given the higher marginal costs of input as compared to marginal benefit. Climate change further complicates this with fluctuating crop yields and diminishing returns. Therefore, it is imperative to build climate resilience in agriculture as well as boost land productivity. The Indian Centre for Agricultural Research (ICAR) has developed 100 drought- and heat-tolerant crop seed varieties. However, their large-scale adoption remains limited. For instance, while 75% of wheat cultivation uses climate-resilient seeds, paddy coverage is under 20%. The upcoming budget must focus on making these seeds affordable and accessible, with the Krishi Vigyan Kendra (KVK) providing on-field demonstrations and support to facilitate the transition from conventional seeds.
Additionally, the Crop diversification strategy must supplement climate-resilient seeds to reduce the risks associated with monoculture and address climate vulnerabilities. Food grains constitute 60% of India’s agricultural production, but shifting from staples like wheat and rice to pulses, oilseeds, and millets will not only enhance nutritional security but also reduce dependency on water and fertilizers. Despite policy calls for this shift, efforts have been limited. For example, pulse production faces challenges such as concentrated production, limited procurement under MSP, and low prices. Consequently, India relies on imports for 15% of its annual pulse consumption. To achieve self-sufficiency in pulses by 2027, measures, like assured MSP procurement, price deficiency payments, and expanding cultivation in rice-fallow regions, should be included in the Budget 2025-26.
Similarly, millet cultivation has declined since the Green Revolution. Millets are drought-tolerant, require less water, and thrive in poor soils – showing higher climate resilience. Recognizing their potential, the government declared 2023 as the International Year of Millets, but incentivizing farmers to take up the production remains key. Millet production should be more remunerative than rice and wheat to make this shift possible. Therefore, to generate the demand for millets, the upcoming budget should make provisions for assured MSP procurement, integrating millets into the Public Distribution System (PDS), and including them in meals under schemes like POSHAN Abhiyaan and the Mid-Day Meal Scheme.
Furthermore, the digitalization boom in India holds immense potential for transforming agriculture. The government has already introduced initiatives like the Fund for Innovation and Technology (FIAT) to speed up crop damage assessment and claim settlements and the Namo Drone Didi scheme to help women SHGs rent drones for applying fertilizers and pesticides. Continuing these efforts, the Budget should focus on precision farming, AI-based agro-advisory services in local languages, and enhancing the Kisan Pehchaan Patra (KPP) scheme by creating a unified database of farmers for targeted service delivery.
On the supply side, post-harvest losses remain a major issue in Indian agriculture. Despite being one of the top producers of rice, wheat, and other crops, inadequate post-harvest infrastructure causes significant losses and volatility in prices. According to the Ministry of Food Processing Industries, post-harvest losses amount to ₹1,52,790 crore annually, especially for perishable crops like tomatoes, onions, and potatoes. Preventing these losses is as critical as increasing productivity. Scaling up government initiatives like the transport and storage of perishable crops during peak harvest is essential. The Budget 2025-26 should allocate more funds under the Agriculture Infrastructure Fund (AIF) and the Mission for Integrated Development of Horticulture (MIDH) to establish micro-cold storages and grading units at the village level, helping stabilize supply and consequently prices by increasing the shelf-life.
In addition to preventing losses, addressing inefficiencies in post-harvest infrastructure is also crucial for enhancing India’s export capabilities. Despite contributing 11% of global agricultural production, India’s share in global agricultural exports is only 2-3%. Adopting a value-chain approach, focusing on demand hotspots and key crop value chains aligned with global market priorities, can unlock this potential. This requires targeted interventions across the entire value chain, from input supply and infrastructure to processing, logistics, and market access. To increase agricultural exports, the budget should focus on operationalizing identified clusters, extending this approach to high-value agricultural products, and connecting the Farmer Producer Organisations (FPO) to these clusters. Today, India‘s agricultural sector stands at a critical juncture, where it faces traditional vulnerabilities exacerbated by climate change, but also new opportunities emerging through technology and market expansion. The upcoming Budget must go beyond incremental changes and embrace a transformative approach to ensure agricultural resilience. This includes prioritizing climate-resilient practices, enhancing post-harvest infrastructure, and diversifying crop portfolios to mitigate risks while boosting productivity and nutritional security. Leveraging digital technology and developing a value chain can address inefficiencies in the agricultural sector and enhance India’s global competitiveness. India’s journey from vulnerability to viability in agriculture depends on innovative policy measures, strong budgetary support, and a long-term commitment to sustainability.
