IN NEWS
Union Budget 2026: Farm allocation rises but crop insurance cut raises concerns
Introduction
The Union Budget 2026-27 has increased overall allocation for agriculture and allied activities to ₹1.62 lakh crore (around 7% increase over Revised Estimates of ₹1.51 lakh crore in 2025-26). However, despite the headline rise, the budget reflects limited enhancement or stagnation in key schemes, with a notable cut in crop insurance allocation under PMFBY, raising concerns about agricultural resilience amid rising climate risks.
ANALYSIS
Trend in Agricultural Allocation
The increase in allocation indicates continued policy focus on agriculture. However, the rise is modest relative to sectoral challenges, especially considering:
- Increasing frequency of extreme weather events
- Rising input costs and income volatility
- Need for structural transformation in agriculture
Thus, the budget reflects a quantitative increase but qualitative concerns regarding prioritisation.
Reduction in Crop Insurance Allocation
The allocation for Pradhan Mantri Fasal Bima Yojana (PMFBY) has been reduced:
- From ₹12,267 crore to ₹12,200 crore
- Actual expenditure (2024-25): ₹14,473 crore
- Effective reduction: ~15.7% compared to actual spending
This cut is significant because:
- Crop insurance is a key safety net against climate-induced risks
- Agriculture is increasingly exposed to:
- Floods, heatwaves, erratic rainfall
- Data shows crop damage increased by 400% (2022–2025)
This creates a mismatch between rising risk and declining support.
Underfunding of Key Agricultural Schemes
Many schemes saw:
- Marginal increases or stagnation in funding
- Example:
- Krishionnati Yojana received a higher allocation (+₹4,400 crore)
- Most others remained unchanged or inadequately funded
This suggests:
- Limited push towards productivity enhancement and diversification
- Weak alignment with long-term agricultural transformation goals
National Mission on Natural Farming (NMNF)
- Allocation: ₹750 crore (only 3.4% increase)
- Objective: Promote natural farming and reduce chemical dependence
However:
- Experts argue allocation is insufficient for large-scale transition
- Risk of scheme becoming demonstration-oriented rather than transformational
- Concerns about institutional capacity and funding gaps
Discontinuation / Non-Implementation of Missions
Several missions announced earlier have:
- Zero allocation in Revised Estimates (2025-26)
- Continued zero allocation in Budget 2026-27
Affected missions include:
- Cotton Technology Mission
- Mission for Pulses
- Mission for Vegetables and Fruits
- National Mission on Hybrid Seeds
Implication:
- Indicates policy inconsistency and weak follow-through
- Raises concerns about credibility of announced reforms
Digital Push: Bharat-VISTAAR Initiative
- Allocation: ₹150 crore
- AI-based multilingual tool integrating:
- AgriStack portals
- ICAR agricultural practices database
Expected benefits:
- Improved farm productivity
- Better decision-making support
- Risk reduction through advisory services
Concerns:
- Potential conflict of interest due to private sector involvement
- Risk of commercial influence in farmer advisories
Implications
- Budget reflects incremental approach rather than structural reform
- Reduction in PMFBY weakens risk mitigation capacity
- Underfunding may slow transition to sustainable agriculture
- Policy inconsistency undermines farmer confidence
- Digital initiatives show promise but require regulatory safeguards
STATIC PART (AS PER INPUT)
- Scheme: Pradhan Mantri Fasal Bima Yojana (PMFBY)
- Nature: Crop insurance scheme providing financial protection against crop loss
- Related Initiative: National Mission on Natural Farming (NMNF)
- New Initiative: Bharat-VISTAAR (AI-based agricultural advisory tool)
- Supporting Framework: AgriStack, ICAR agricultural practices
Updated – 01 February 2026 ; 09:51 PM | Down to Earth