Budget 2025: a push to raise farm yields

In a bid to improve productivity of different crops and bring them up to global benchmarks, the budget announced multiple schemes targeting crops like cotton, pulses and fruits and vegetables. To improve production and credit facilities for farmers in under-performing districts, the budget also announced a new scheme—Prime Minister Dhana Dhanya Krishi Yojana—which will be implemented in partnership with states.

“Through the convergence of existing schemes and specialized measures, the programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters,” finance minister Nirmala Sitharaman said in her budget speech. Besides improving crop yields, the scheme will push crop diversification, improve access to credit, post-harvest storage and irrigation facilities, benefitting 17 million farmers, Sitharaman added.

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Targeting self-sufficiency in pulses within six years, the budget launched a new pulses mission which will focus on three varieties—tur (pigeon peas), urad (black gram) and masoor (lentils). The government will purchase all three varieties at minimum support prices from farmers, the finance minister said. The mission received a funding of ₹1,000 crore, budget documents show. India’s pulses import bill was at a seven-year high of $3.7 billion in 2023-24.

The budget also promised a new technology mission on cotton to improve yields and promote cultivation of long-staple cotton. The finance minister announced two other schemes—one to push for higher production of horticulture crops and another mission on high-yielding seeds. The seeds mission will attempt to strengthen research and propagate seeds which are pest and climate-resilient.

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The budget documents show that the cotton and horticulture schemes was allocated ₹500 crore each, while the seed mission received a modest ₹100 crore. Together, all the technology missions—on pulses, cotton, fruits and vegetables, and seeds—received a funding of ₹2,100 crore.

“It is heartening to see the focus on improving production and productivity across multiple crops. In this regard, the budget follows the analysis from the latest Economic Survey that improving productivity is crucial to tame food inflation,” said Avinash Kishore, senior research fellow at the Delhi office of the International Food Policy Research Institute.

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However, the finance minister could have done more to increase direct funding for agriculture research, Kishore added. “The most ridiculous thing is that India is now spending close to ₹1.7 trillion on urea and other fertiliser subsidies while use-efficiency (production per unit of fertiliser used) is not increasing, particularly for urea. This needs a rational scrutiny and the money can be better spent on productivity enhancement and research.”

In a relief for farmers the budget also enhanced the credit limit for farmers under the Kisan Credit Card (KCC) scheme, from ₹3 lakh currently, to ₹5 lakh.

Mint had reported in December that the budget is likely to increase the KCC credit limit for farmers. Also, in January Mint reported that the budget is likely to announce a scheme around high-yielding seeds for crops like pulses and cotton.

A close look at the budget documents shows that among major schemes, funding for crop insurance was slashed by more than ₹3,600 crore. In 2025-26, the budget estimate (BE) for the scheme is ₹12,242 crore, compared to the revised estimate (RE) of ₹15,860 crore.

Even though the budget enhanced the KCC credit limit for farmers, it kept the funding for interest subsidy under the scheme unchanged at ₹22,600 crore. For the PM-AASHA scheme, which is meant to ensure remunerative prices for farmers and reduce price volatility for consumers, the funding was increased from ₹6,438 crore in 2024-25 (BE and RE) to ₹6,941 crore in 2025-26 (BE).

Overall, the budget for the department of agriculture (under the ministry of agriculture and farmers’ welfare) was reduced from ₹131,195 crore in 2024-25 (RE) to ₹127,290 in 2025-26 (BE). The funding for department of agriculture research and education was raised marginally to ₹10,466 crore (2025-26 BE).

Among other major announcements for the farm sector, the budget promised setting up a new urea plant in Namrup, Assam, to increase domestic availability of the critical fertiliser. The budget also promised to set up a second gene bank in India which will preserve a million germplasm lines of crops, for future food and nutritional security.