Chandrajit Banerjee | Modernise Agriculture For A More Prosperous India

Agriculture and allied sectors continue to anchor India’s economic and social stability, sustaining livelihoods for nearly half the population while contributing significantly to food security, rural employment and export earnings. Over the past several decades, India has achieved remarkable success in enhancing food production and ensuring availability at scale. However, as the economy evolves and aspirations rise, the next phase of agricultural growth must move beyond volume-led expansion toward a model that emphasises productivity, competitiveness, value addition and resilience.

As part of its recommendations for the Union Budget 2026-27, the Confederation of Indian Industry (CII) has championed for a comprehensive modernisation of India’s agricultural ecosystem. This transformation must reduce policy distortions, strengthen value chains, and accelerate the adoption of technology-driven, market-linked systems. Unlocking this potential requires a coherent shift toward higher productivity, stronger markets, and more resilient livelihoods — supported by modern practices, diversified value chains and sustainable growth pathways.

A first and critical priority is addressing long-standing market distortions and strengthening agricultural supply chains. While Minimum Support Price (MSP) procurement has played an important role in stabilising farmer incomes and ensuring food security, its concentrated application across a limited set of crops and geographies has weakened broader market signals. Frequent imposition of stock limits, price controls and ad hoc export restrictions further amplify uncertainty, discouraging private investment in storage, processing and higher-value crops.

A calibrated transition toward market-linked pricing mechanisms is therefore essential. This shift should be accompanied by robust risk-mitigation instruments and transparent information systems. In this context, CII has proposed the creation of a National Market Intelligence Grid that provides real-time data on demand trends, price movements, weather risks and export opportunities. Such a platform would enable farmers, Farmer Producer Organis-ations (FPOs), processors, and traders to make informed cropping and investment decisions, align production with demand, and reduce volatility across the value chain.

Equally urgent is the modernisation of post-harvest, storage, and warehousing infrastructure, where inefficiencies continue to erode farmer incomes and inflate consumer prices. Post-harvest losses remain unacceptably high across fruits, vegetables, and perishables, reflecting gaps in storage capacity, logistics and quality management. Mandat-ory registration of warehouses under the Warehousing Development and Regulatory Authority (WDRA), wider adoption of electronic negotiable warehouse receipts (e-NWRs), and recognition of these receipts as negotiable securities can significantly improve transparency, standardisation and access to institutional credit. By enabling farmers to store produce and access finance against warehouse receipts, these reforms can reduce distress sales and strengthen price realisation.

Building on this, CII has recommended the creation of a “One India Food Grid” — an integrated national system connecting storage facilities, village-level collection centres, cold-chain infrastructure, logistics networks and digital tracking platforms. Modelled on the success of the electronic Vaccine Intelligence Network (e-VIN), such a grid would improve traceability, enhance food safety, reduce wastage, and stabilise prices by smoothing supply-demand mismatches across regions.

Secondly, Farmer Producer Organisations must be leveraged more effectively as engines of rural transformation. While the number of FPOs has increased significantly in recent years, many continue to face constraints related to scale, capital access, professional management and market integration. Strengthening FPOs with deeper financial and institutional support is therefore critical to making agriculture more inclusive and commercially viable.

Extending Nabard’s Rs 2,000-crore credit scheme to all food-processing units — both within and outside the formal food parks — would allow FPO-linked enterprises to access long-term, affordable finance. In addition, a dedicated Support Fund to onboard FPOs onto platforms such as the Open Network for Digital Commerce (ONDC), eNAM, and commodity exchanges can dramatically expand their market reach. Integrating FPOs into formal value chains not only enhances farmer bargaining power but also improves quality, traceability, and compliance with domestic and export standards.

Thirdly, private-sector research and development must become a central driver of innovation across seeds, biotechnology, precision agriculture and post-harvest systems. As climate variability intensifies and resource constraints deepen, India’s agricultural future will increasingly depend on science-led solutions. A predictable regulatory environment, strong intellectual property protection, and market-based pricing frameworks are essential to attract sustained investment in agricultural R&D.

Encouraging innovation in climate-resilient seeds, biologicals, digital advisory platforms, and precision input application can significantly improve productivity while reducing environmental footprints. When coupled with large-scale farmer training and awareness programmes, these innovations can accelerate technology adoption, enhance incomes, and position India as a global hub for agri-innovation.

India must also strengthen its global competitiveness in agrochemicals and seeds. Despite strong manufacturing capabilities, the agrochemical sector faces challenges from import dependence and low-cost dumping. A dedicated Production Linked Incentive (PLI) scheme for agrochemicals would support domestic manufacturing, promote scale efficiencies and enhance export competitiveness. Similarly, India’s share in global seed exports — currently around one per cent — remains well below potential. A focused PLI scheme supporting seed research, advanced plant breeding, and export-oriented seed production can unlock new growth avenues while reinforcing India’s leadership in tropical and climate-resilient varieties.

Finally, India must significantly scale its presence in global agricultural trade. Ris-ing global demand for organic, clean-label, and processed agri-products presents a major opportunity for Indian farmers and agri-enterprises. To capture this potential, income support mechanisms must be aligned with export competitiveness. A Price Deficiency Payment model linked to acreage under export-oriented crops — rather than price-based MSP interventions — can safeguard farmer incomes while allowing exports to remain price-competitive.

Strengthening village-level infrastructure for grading, testing, storage, and organic certification is equally important. Establishing a national Clean Label accreditation system would enhance credibility, traceability and consumer trust in Indian products. Moreover, access to pre- and post-shipment credit at internationally benchmarked interest rates is essential if Indian exporters are to compete effectively with global peers.

A structured modernisation push is also required in agri-processing, a sector that holds immense promise for value addition, employment generation, and export growth. CII has recommended the establishment of a dedicated Agro-Processing Financial Institution (SAPFI) to provide tailored, end-to-end financial solutions spanning sourcing, processing, logistics, branding, and exports. Such an institution would address long-standing financing gaps, particularly for mid-sized enterprises, and enable the sector to upgrade technology, improve quality standards, and integrate with global value chains.

Modernising the agricultural value chain — from markets and logistics to technology, processing and finance — has the potential to substantially lift productivity, resilience and farmer incomes. Given agriculture’s central role in sustaining millions of livelihoods, higher value generation in this sector will deliver strong multiplier effects across manufacturing, services and the rural economy. The Union Budget 2026-27 represents a critical opportunity to accelerate this transformation and build a more resilient, competitive, and future-ready agricultural ecosystem for India.

The writer is the director-general of the Confederation of Indian Industry