Budget 2024: Technology in agriculture, research investment top demands of agritech sector

Agricultural credit and technology were highlighted in last year’s Union Budget. This year, industry executives are hoping for the inclusion of investment in research and technology-focused measures for startups.

Budget 2024: Technology in agriculture, research investment top demands of agritech sector

Monday January 29, 2024,

4 min Read

Over the last six years, the Indian agriculture sector has expanded at an average annual growth rate of 4.6%. India has also rapidly emerged as a top net exporter of agricultural products, as per data from the Economic Survey of 2023.

Last year’s Union Budget made strides in addressing key reforms for the sector—right from increasing farmer credits and green initiatives to precision farming. Financial support for various agricultural verticals including fisheries and animal husbandry, along with increased focus on artificial intelligence-led processes, also emerged as major themes. ‘Green growth’ was one of the seven priorities enlisted in Budget 2023.

This year, the focus remains on digitising the agriculture sector with special emphasis on innovation, additional financial assistance for agritech startups, and data privacy and security.

Also Read
Despite a gloomy 2023, insiders foresee a sunny future for agritech

Emerging technologies in agriculture

This year, the focus on emerging technologies like artificial intelligence (AI), machine learning (ML), and internet of things (IoT) is set to increase, according to Genji Jairam, Managing Director of Farminno Tech, an Andhra Pradesh-based agritech startup which helps farmers meet supply demands using technology.

“The government should introduce tax incentives for new-age technology applications in agriculture such as IoT and AI. This will encourage more investment in research and development,” says Jairam.

Sandiip Bhammer, Founder and Co-Managing Partner of Green Frontier Capital, concurs. He adds that there might be a deeper integration of technology in agriculture to enhance productivity and sustainability. Moreover, credit facilitation for small and medium farmers through technology-driven solutions could be another focus area alongside the continuation of digital initiatives in other sectors.

Farminno’s Jairam adds that the Budget should also encourage subsidy-based machines for farmers and promote smart AI/ML-based polyhouse and greenhouse farming, which would align with the growing need for sustainable and technologically advanced agricultural practices.

agritech budget 2024

Design by Sharath Ravishankar

Also Read
Agritech startup funding declines by third, deal count falls 42% in 2022: Report

Farmer incentivisation

Sufficient credit is important to ensure that farmers can leverage the potential of technology.

“The lack of tax incentives for IoT and AI in agriculture last year was a missed opportunity,” says Green Frontier's Bhammer.

Last year, the agricultural credit target was increased to Rs 20 lakh crore.

This year, reforms should include tax benefits or subsidies for adopting these technologies in the agricultural sector. Moreover, establishing a clear regulatory framework to encourage innovation, while ensuring data privacy and security, is crucial, according to Bhammer. 

“Investment in research and development and collaborations between tech companies and agricultural experts can drive the transformation of this sector,” he notes.

Kartheeswaran KK, Founder and CEO of Ninjacart, noted that the inclusion of interest subvention of 2% on short-term agri-loans would promote financial inclusion and will drive sustainable growth and innovation in the field of agritech.

“Providing formal credit access to all players in the agricultural value chain into this initiative would be a commendable move. This will not only empower farmers but will also be a noteworthy step in expanding India's agriculture trade as a whole,” Kartheeswaran said.

Farminno’s Jairam believes that young entrepreneurs and scientists in the field of agriculture must be encouraged to develop innovative solutions to make inputs and agricultural processes more efficient and affordable. Technology could help streamline the sector.

“Connecting them with the industry will enable them to tackle real-life problems using technologies like IoT, AI and ML. Government grants should strongly support IoT/AI/ML-based research in institutes, particularly in the agricultural sector,” he says.

Further, the Budget should prioritise promoting agriculture-based research and collaborating technology-related scientists directly with farmers to address their real-life challenges, Jairam adds.

Ezhil Subbian, Co-founder and CEO of String Bio, a Bengaluru-based startup which offers solutions using methane for animal nutrition, says that the Budget can include policies geared towards alleviating the credit burden on farmers given the challenges posed by adverse weather conditions, particularly the drought-like situation in 2023.

“String Bio encourages a forward-looking approach that rewards advancements in technology and practices aimed at bolstering soil health. By incentivising innovations in these areas, the government can play a pivotal role in fostering a more sustainable and resilient agricultural ecosystem,” says Subbian.

While last year’s Budget offered some refreshing impetus to the agricultural sector, the success of this year’s allocations depends on how technology can be deployed to improve efficiency and affordability while keeping the farmer as its focus.

(The story was updated to include comments from Ninjacart.)

Edited by Kanishk Singh

Montage of TechSparks Mumbai Sponsors