Expectations from Union Budget 2026: Climate-resilient agriculture

Almost 80% of the agricultural workforce comprises farmers with small land holdings, making it critical to address their most pressing challenges – income security, access to markets and credit, and the incentivization of modern farming techniques. At the same time, addressing sustainability and climate change priorities in the sector is also a core concern. While it is important to increase farmers’ incomes by incentivizing crops with high profit margins, it is equally important to address issues such as soil health, crop diversification and agroforestry to enable sustainability and climate resilient farming in India. It is expected that the Union Budget 2026 would build on the major announcements of the previous budget while driving positive movement toward establishing a climate smart agriculture policy.

An important time for climate smart agriculture

While the government has signaled its intent, we expect more substantive announcements on sustainable agriculture reforms. For example, the government could elaborate on the July 2024 announcement of its framework for climate-resilient agriculture in 50,000 villages across India. In the next 15 years, across multiple crop types, climate change is projected to cause average production losses of 15% to 20%, with some crops facing even higher losses. For farm resilience, incentivizing agroforestry, soil and water conservation, and sustainable farming practices is an urgent priority. We also expect a direct integration of the agriculture sector with the National Action Plan on Climate Change (NAPCC), including measures for solar adoption, energy efficiency, water and ecosystem conservation and green practices. 
 

Some specific expectations from the Union Budget 2026 are outlined as follows:

• Implement the NICRA (National Innovations on Climate Resilient Agriculture) scheme across India

• Expand the ambit of drip irrigation from high-value crops to more crop types for water efficiency

• Promote organic farming

• Equip Krishi Vigyan Kendras to address climate-related challenges and provide farmer training

• Promote modern biotechnology techniques for crop improvement

• Increase the limits of Kisan Credit Cards (KCC) to improve farmers’ access to credit

• Promote allied sectors such as dairy, fisheries and livestock for income diversification 

Building for the future

The Union Budget 2026 can truly set the tone for a future-focused agriculture sector. While addressing the immediate issues, such as MSP rationalization, the government can take the opportunity to leverage the MSP as a platform to promote climate-resilient farming. Providing incentives for water conservation is another core area of intervention. With respect to medium-term and long-term solutions, the sector can also expect announcements around reduction of GHG emissions, soil health and increasing yield and productivity for India to become a food provider for the world.