.png){kind=small}
Written By: Jagriti Shahi
The Indian government's 2024 budget introduces significant measures to address post-harvest challenges in agriculture, with a focus on creating a more resilient and sustainable supply chain. These initiatives are designed to reduce food loss, promote agri-based industries, support recycling and upcycling, and enhance storage facilities across the country. Below is a detailed research-based overview of the key initiatives and opportunities in post-harvest support and recycling in agriculture.
Figure: Allocation for Agriculture and Allied Activities (2022-2024)
Key Highlights of the 2024 Budget for Post-Harvest Support and Recycling Initiatives
Total Budget Allocation for Agriculture and Allied Activities
The 2024 budget allocated ₹1.92 lakh crore to the agriculture and allied sectors. This represents an 8.8% increase compared to the previous year.
Increase in Subsidies for Post-Harvest Infrastructure
The budget increased subsidies for cold storage, warehouses, and processing units by ₹12,000 crore under the Pradhan Mantri Kisan Sampada Yojana (PMKSY). This will help create modern agricultural infrastructure, reducing wastage and improving market access.
Support for Cold Chains and Warehousing
₹3,500 crore has been earmarked specifically for expanding cold storage and warehousing facilities across rural areas. This includes incentives for setting up integrated cold chains, which will help manage temperature-sensitive produce like fruits, vegetables, and dairy.
Promotion of Agri-Tech and Innovation
The government will allocate ₹500 crore to support AgriTech startups focusing on post-harvest management and recycling initiatives. These startups will be able to access funding under the Startup India Seed Fund scheme, which provides early-stage support for innovations in logistics, storage, and upcycling of agricultural waste.
Post-Harvest Support Initiatives
Cold Storage Expansion
With a significant portion of perishable goods being wasted due to inadequate storage, the government is working to bridge the cold storage gap. The ₹3,500 crore allocation aims to add new facilities across states that produce high volumes of perishables, especially targeting tier 2 and tier 3 towns where this infrastructure is lacking.
Subsidies: Cold storage projects are eligible for subsidies of 35-50% of the total capital cost, depending on the project size and region.
Mega Food Parks Expansion
Continuing under the Pradhan Mantri Kisan Sampada Yojana, the government plans to establish 15 new Mega Food Parks with an investment of ₹2,100 crore in 2024. These parks will offer integrated cold chains, processing units, and warehousing facilities to improve the efficiency of post-harvest operations.
Each park is expected to cater to more than 25,000 farmers in its region and is projected to generate over 50,000 jobs.
Recycling and Upcycling Initiatives: The Circular Economy Push
Recycling of Agricultural Waste
The budget has introduced new policies to convert agricultural waste (such as crop residue and husks) into valuable by-products like biofuels, organic fertilizers, and biodegradable packaging.
₹1,000 crore has been allocated for establishing biomass conversion units under the National Biofuel Policy. These units will help convert stubble and other waste into biofuels, reducing pollution and providing additional income for farmers.
The Ministry of Environment, Forest, and Climate Change has set up bio-based packaging units, offering up to 30% subsidies for industries that use agricultural waste to produce eco-friendly packaging.
Areca Nut and Coconut Waste Upcycling
The government is focusing on the upcycling of areca nut and coconut husks to create biodegradable products, such as packaging materials. The state of Karnataka, a major producer of these crops, stands to benefit from the ₹500 crore allocation for establishing upcycling plants.
These plants are expected to contribute to reducing the dependence on single-use plastics, with an initial target of reducing plastic waste by 20% by 2026.
Previous Budget Initiatives (2022-2023) Impact and Learnings
Post-Harvest Infrastructure Support from Past Budgets
The 2022 and 2023 budgets introduced several foundational policies to improve the agricultural value chain. Notably, the Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) aimed at guaranteeing farmers fair prices and improving storage infrastructure was allocated ₹15,000 crore over two years.
This program resulted in the construction of over 400 new warehouses and cold storage units across India, reducing post-harvest losses by 12% in regions where the infrastructure was set up.
Increased Support for FPOs
The government continued its support for Farmer Producer Organizations (FPOs), providing ₹2,500 crore for 2024 to help small and marginal farmers improve access to storage facilities and markets.
The funds are directed towards establishing 100 new FPOs with integrated processing units, enhancing their ability to manage post-harvest activities.
Opportunities and Startups in Post-Harvest and Recycling Industries
India’s agricultural sector is rapidly evolving, with ample opportunities for innovation in post-harvest handling and recycling.
Cold Storage and Logistics
With the government investing in cold chain infrastructure, startups offering refrigerated logistics and micro-warehousing solutions can tap into a growing market. Companies like Arya and NinjaCart are already capitalizing on these opportunities by providing on-demand cold storage and transportation services.
Sustainable Packaging
The rising demand for biodegradable packaging made from agricultural waste offers significant growth prospects for startups in this space. EcoCushion Paper, a Bengaluru-based startup, has been pioneering the use of rice husk-based packaging and is set to scale operations with government subsidies and funding.
Recycling and Biomass-based Industries
AgriWaste, a startup converting crop residue into bio-based products, is working closely with the government to reduce agricultural waste. With a projected ₹100 crore revenue by 2025, it is expected to lead the biomass recycling industry, with government subsidies supporting its expansion.
1. Post-Harvest Support: Infrastructure, Processing, and Cold Chains
Post-harvest activities are critical in preserving the quality and value of agricultural produce. These include handling, storage, processing, and transportation. The 2024 budget allocates significant resources to improve these systems, specifically in rural areas, to support farmers and enhance India’s agricultural output.
Cold Storage and Warehousing Expansion
Cold storage and warehousing are crucial for minimizing post-harvest losses, especially for perishables like fruits, vegetables, dairy, and seafood. India has a large gap in cold chain infrastructure, resulting in substantial losses of agricultural produce every year. The government has addressed this gap by allocating resources for the construction of new cold storage facilities and warehousing in rural areas.
Cold Chain Support: The budget focuses on enhancing the cold chain infrastructure for horticultural crops. This includes building cold storage facilities and refrigerated transportation to maintain the quality and freshness of the produce.
Agricultural Warehousing: Funds are also dedicated to building additional warehouses and storage silos to accommodate grains and cereals. These improvements aim to reduce spoilage and waste, especially in remote farming regions.
Pradhan Mantri Kisan Sampada Yojana (PMKSY)
The PMKSY continues to be a flagship program for post-harvest management. This scheme provides financial assistance for building processing units, integrated cold chains, and food parks across the country. In 2024, the PMKSY received a significant boost, with funds directed toward the development of modern infrastructure and the establishment of additional Mega Food Parks, which help to process, package, and market agricultural products efficiently.
Mega Food Parks
The Mega Food Parks scheme is designed to bridge the gap between farmers and the retail market by providing modern infrastructure and connecting farmers with processing units. These parks enable better handling and processing of agricultural produce, thereby reducing post-harvest losses.
2. Recycling and Upcycling in Agriculture
Agriculture generates a significant amount of waste, which if properly managed, can be transformed into valuable by-products. The 2024 budget emphasizes sustainability, particularly through recycling and upcycling of agricultural waste.
Waste-to-Wealth Initiatives
The government is promoting biomass-based industries through initiatives that convert agricultural by-products, such as crop stubble and coconut husks, into biofuels, organic fertilizers, and packaging materials. The waste-to-wealth model encourages farmers to adopt sustainable practices and provides them with additional income streams.
Biomass Recycling: Agricultural waste, particularly in regions like Punjab and Haryana, is often burned, contributing to severe air pollution. To combat this, the budget includes subsidies for the setup of biomass recycling units that can convert this waste into bioenergy and bio-based products.
Upcycling of Agricultural Waste
Another focus area is the upcycling of agricultural waste materials like areca nut husks and coconut shells into commercial products, such as biodegradable packaging materials. This sector is gaining momentum with government support for industries involved in creating sustainable alternatives to plastics.
Areca and Coconut Waste: The upcycling of areca and coconut waste is particularly important in regions like Karnataka and Kerala, where these crops are abundant. By converting the waste into useful materials, the government aims to reduce the environmental footprint of agriculture while providing additional revenue streams for farmers.
Sustainable Packaging
With the increasing push toward reducing plastic use, the government is promoting the development of biodegradable packaging made from agricultural waste. These initiatives support industries involved in producing sustainable packaging materials from by-products like sugarcane bagasse and rice husk.
3. Support for AgriTech Startups in Post-Harvest and Recycling
Figure: Subsidies for Post-Harvest Infrastructure (2022-2024)
The government is fostering innovation in agriculture by supporting startups that provide post-harvest solutions and recycling technologies. These startups are developing cutting-edge solutions for issues such as storage, quality control, and waste management.
Startup India Scheme
The Startup India Scheme continues to provide tax benefits and ease of doing business for startups focused on agriculture. This includes ventures involved in post-harvest storage, cold chain management, and the upcycling of agricultural waste. By providing a favorable ecosystem for startups, the government aims to accelerate the development of technology-driven solutions in the agriculture sector.
Key AgriTech Startups in Post-Harvest Solutions
AgNext: Specializes in AI-driven quality assessment technologies that help in post-harvest quality control, ensuring that crops meet market standards.
Arya: Offers a range of post-harvest services, including micro-warehousing, financing, and market linkages, enabling farmers to store their produce and sell it at optimal times.
Ergos: Focuses on providing micro-warehousing facilities for farmers, allowing them to store and monetize their produce efficiently.
4. Previous Budget Initiatives (2022-2023) and Their Impact
The 2022 and 2023 budgets laid the foundation for the post-harvest and recycling initiatives now being expanded in 2024. These budgets introduced key reforms to improve agricultural efficiency and sustainability, including:
National Mission on Edible Oils: Aimed at increasing oilseed production and establishing post-harvest infrastructure for oilseed processing. This mission is expected to significantly reduce India's dependence on imported edible oils.
Support for Farmers Producer Organizations (FPOs): FPOs have been given financial assistance to build storage facilities and processing units. This collective approach helps small and marginal farmers improve their bargaining power and access to markets.
5. Opportunities in Post-Harvest and Recycling Industries
The post-harvest and recycling sectors present significant growth opportunities, supported by government incentives and programs. Entrepreneurs and investors can explore various avenues in these areas:
Cold Storage and Logistics
As the government continues to invest in cold storage facilities and logistics, there is a growing need for businesses that provide refrigerated transportation, temperature-controlled warehouses, and innovative storage solutions.
Sustainable Packaging and Bio-Based Industries
The push for sustainable and biodegradable packaging presents opportunities for businesses involved in producing eco-friendly materials from agricultural waste. These industries can tap into both domestic and international markets, where demand for sustainable products is rising.
Recycling and Waste Management
Businesses focused on recycling agricultural waste into biofuels, organic fertilizers, and other value-added products are poised for growth, especially with government subsidies and support for the establishment of waste-to-energy plants.
Conclusion
The 2024 budget underscores the Indian government’s commitment to addressing the challenges faced by the agricultural sector, particularly in post-harvest management and sustainable practices. By investing in infrastructure like cold chains, storage facilities, and recycling units, the government aims to reduce post-harvest losses, increase farmers' incomes, and support the development of agri-based industries. The initiatives also open up opportunities for startups and businesses to contribute to a more sustainable and efficient agricultural ecosystem. With continued support from the government, these sectors are expected to grow, creating a more resilient supply chain and promoting the circular economy in agriculture.
About Global Launch Base:
Global Launch Base helps international startups expand in India. Our services include market research, validation through surveys, developing a network, building partnerships, fundraising, and strategy revenue growth. Get in touch to learn more about us.
Contact Info:
Website: www.globallaunchbase.com
Email: info@globallaunchbase.com
Comments