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Deloitte India releases Pre-Budget Expectations 2023; measures to boost exports and promote development in agriculture

29 December 2022, New Delhi: Agriculture and its allied sectors are the largest sources of livelihood in the country. The country can generate US$ 813 billion in revenue with an investment of US$ 272 billion in the agritech and allied segments by 2031.

The sector is slowly shifting from traditional farming to horticulture and livestock production. The demand for fresh and processed food products is increasing due to rising income levels, urbanization, and changing consumption habits.

Anand Ramanathan, Partner, Deloitte India

In addition, the government has announced several policies, schemes, and programs towards this sector for facilitating and incentivizing agri-produce movement by air transportation, a composite portal to provide agricultural marketing-related services through a single digital platform, etc.

Anand Ramanathan, Partner, Deloitte India has shared a ‘Pre-Budget Expectations 2023’ with viewpoints across Food and Agriculture in India.

Expectation#1: Ease of doing business to accelerate sector growth

The demand for allied sectors, such as food processing, horticulture, livestock production, organic farming, smart proteins, floriculture, dairy, and nutraceuticals, is increasing. Hence, the government must make budgetary allocations and develop monitoring mechanisms to support implementation on the ground. It can refine single-window mechanisms with dedicated application filing, processing, and tracking support across states. The creation of a ‘one-stop-shop’ for approvals and clearances will improve the ease of doing business. Hence, players can quickly avail of scheme benefits and facilitate investors and entrepreneurs to obtain approvals and clearances to expand their business across India.

The government should provide a user-friendly portal with a multi-language support feature as a single point of information to educate players about the already existing schemes and policies. In addition, to facilitate the growth of agri-exports, the government should ease the documentation process; incentivize international tie-ups; educate stakeholders about the best practices in agriculture and manufacturing, the latest international standards in quality and packaging; implement food safety and traceability systems as required by the importing countries of developing economies. These measures will boost Indian exports and promote the development of agriculture and its allied sectors

Expectation#2: The government policies to support technology development and adoption

The evolution of digital technologies, such as Artificial intelligence (AI), Machine Learning (ML), remote sensing, big data, blockchain, Internet of Things (IoT), Geographic Information System (GIS) technology, and the use of drones and robots, is transforming agricultural value chains and modernizing operations. At present, the adoption of these is still nascent in India due to limited penetration of mechanization tools, lack of awareness, and the presence of segregated small-holder farms. To support and accelerate the development and adoption of new technologies, the government has launched the Digital Agriculture Mission (2021–2025).

Expectation#3: Build infrastructure to optimize the food and agribusiness supply chain

With the emergence of new allied sectors, supply chains and operating models need to be more flexible, adaptive, and resilient. Efficient management of food products by creating a network of advanced primary processing, storage, and distribution facilities could add value to products, reduce losses, and enhance key stakeholders’ revenues.

The government should create policies to provide attractive incentives to build facilities, such as micro cold storage to address supply chain issues (lack of proper storage infrastructure, inadequate logistics, high levels of wastage, etc). It should provide financial incentives, training, infrastructure, and marketing facilities to entrepreneurs to set up businesses, such as food processing and milk processing plants. In addition, the government should increase investments to improve infrastructure, including irrigation facilities, logistics, warehousing, and silo storage facilities across states.

Expectation#4: Increase focus on creating awareness and developing market linkages

The government must provide training and financial assistance as well as create awareness about schemes and best practices (crop diversification, organic farming). In addition, it should develop market linkages through a nationwide portal/app (e-mandis), such as the farm gate app developed by the Madhya Pradesh Government, which will provide market price information, assured buy-back arrangements for farmers, and a platform for companies to buy the produce. These e-mandis will facilitate buying and selling of agricultural produce without visiting mandi premises, and these measures will develop new markets for stakeholders. Setting up marketplaces focused on FPOs will drive demand and result in greater price realizations for farmers. India’s important role in shaping the food security agenda for the Indo-Pacific will present an opportunity for the food processing sector to explore a greater level of integration with countries in Southeast Asia, Africa, and the Middle East from an agribusiness standpoint.

On the supply side, policy interventions need to be upgraded with demand generation for Indian produce and processed products in these geographies. Country/ state level partnerships (for example, a partnership between the UAE and Madhya Pradesh as part of the I2U2 grouping) for specific crop/commodity groupings will secure demand, diversify cropping patterns, and increase price realizations for farmers and other stakeholders in the agricultural ecosystem

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