Normal monsoon forecast eases crop and growth concerns for India

Synopsis

Hundreds of millions of farmers across Asia’s third-largest economy depend on the annual monsoon to nourish their fields. Ample rains may boost production of crops like rice, soybeans, corn and sugar cane, helping to lower food prices and aiding the govt’s efforts to cool inflation.

India, which relies on rain for the vast share of its water, forecast that the monsoon will be normal this year, potentially bolstering the outlook for agriculture production and economic growth.

Showers during the June-September season are likely to be 96% of a long-term average, according to the India Meteorological Department. The estimate comes a day after private forecaster Skymet predicted a below-normal monsoon, saying rains may reach only 94% of the benchmark.

Hundreds of millions of farmers across Asia’s third-largest economy depend on the annual monsoon to nourish their fields. Ample rains may boost production of crops like rice, soybeans, corn and sugar cane, helping to lower food prices and aiding the government’s efforts to cool inflation.

The weather office said that the probability of a normal monsoon is as much as 35% this year. Rainfall between 96% and 104% of the historical average is considered normal. Last year’s monsoon was 106% of the average, boosting food grain output in 2022-23. The weather department’s forecast has a margin of error of 5%.

Based on the IMD’s forecast probability, the risk of lower rainfall remains, said Anubhuti Sahay, the Mumbai-based South Asia chief economist at Standard Chartered Plc. She expects inflation to hover at 5.3% this fiscal year and food inflation at 5.7% given falling wheat stockpiles, rising rural wages and prospects for less rain.

The shift to El Nino could also affect the monsoon in the second half of the season, according to the IMD. The event, triggered by warm water in the equatorial Pacific, is associated with drier conditions and reduced rainfall in India.

The IMD’s forecast of a normal monsoon “comes as a relief as it takes off the upside risk to our and RBI’s CPI inflation forecast” for the year ending March 2024, said Madhavi Arora, an economist at Emkay Global Financial Services Ltd.

Inflation stayed above the Reserve Bank of India’s target of 2%-6% for 10 straight months through October, forcing the central bank to explain to the government why it missed the target. Inflation again climbed to hover above 6% in January and February due to higher cereal prices.

With food constituting nearly half of the index, a normal monsoon could help to bring down food inflation and hence headline inflation.

The monsoon is crucial for winter-sown crops as well, as rains during the period also fill reservoirs and help crops during November and March, when most regions get little showers. India sows rice, soybeans and corn during the monsoon season, and wheat and rapeseed in winter. The nation is the world’s second-biggest producer of wheat, rice, cotton and sugarcane.

“The volume of rainfall, its timing and dispersion will crucially influence crop sowing and output, as well as prices,” said Aditi Nayar, chief economist at ICRA Ltd. Since reservoir levels are healthy by historical standards, a mild delay or sub-par monsoon may not be very challenging, she said.

More from the IMD:

  • Rain seen normal over parts of peninsular, adjoining east-central, eastern, northeastern and northwestern regions during the four-month period.
  • Normal to below-normal showers expected over parts of northwest, west-central and some pockets of northeast regions.
  • El Nino conditions are likely to develop and the impact will be seen in the second half of the season.
  • Out of 15 El Nino years during 1951-2022, there were six occassion when rains were normal to above normal.

The Indian Ocean Dipole, the difference in surface temperatures between western and eastern parts of the sea, may become positive and help monsoon rains.Lower-than-normal snow cover over Eurasia during February and March is favorable for rains in India.

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Govt allows 5 pvt firms for cluster farming in 50,000 hectares with Rs 750cr investment

Synopsis

The Centre will give financial assistance up to Rs 100 crore depending on the size of the project under the recently launched central scheme Cluster Development Programme (CDP), which is implemented by the National Horticulture Board with an outlay of Rs 2,200 crore.

The Centre has allowed five private firms to undertake cluster farming of specific horticulture crops in about 50,000 hectares on a pilot basis entailing an investment of Rs 750 crore, including government subsidy — a moved aimed at making Indian produce globally competitive and boost farmers’ income. Desai Agrifoods, FIL Industries, Sahyadri Farms, Meghalaya Basin Management Agency, and Prasad Seeds are five companies selected for pilot cluster farming through a bidding process.

The Centre will give financial assistance up to Rs 100 crore depending on the size of the project under the recently launched central scheme Cluster Development Programme (CDP), which is implemented by the National Horticulture Board with an outlay of Rs 2,200 crore.

Speaking with PTI, Priya Ranjan, Joint Secretary in the Agriculture Ministry, said, the cluster-based approach has seen an incredible amount of success across the world. In India, the government for the first time is encouraging market-led development of entire value chain of specific horticulture crops by giving financial assistance.

“These five companies are spread across an area of almost 50,000 hectares and cover around 55,000 farmers. The investment within these clusters is about Rs 750 crores,” he said.

For instance, Desai Agrifoods’s Rs 103 crore ‘banana cluster” project will be developed in Ananthapura, Andhra Pradesh, Sahyadri Farms’ Rs 205 crore ‘grapes cluster’ project will come up in Nasik, Maharashtra, while Meghalaya Basin Management Agency’s Rs 52 crore ‘turmeric cluster’ project will be developed in West Jaintia Hills, he said.

FIL Industries will develop an ‘apple cluster’ in Shopian, Jammu and Kashmir, while Prasad Seeds will develop a ‘mango cluster’ in Mahabubnagar, Telangana, he added.

Banana, apple, grapes, turmeric and mango are the main crops that these companies will focus on. The timeline for completion and operationalisation of the project will be four years.

The government aims to develop 55 different clusters identified across the nation, each with its specific crop. Initially, the pilot will be in 12 clusters with seven focussed crops on a pilot basis.

Under the CDP, financial assistance of up to Rs 25 crore will be given for mini clusters of more than 5,000 hectares, up to Rs 50 crore for mid clusters between 5,000-10,000 hectares and up to Rs 100 crore for mega clusters of above 15,000 hectares.

The implementing agencies of cluster farming are selected through a bidding process for different verticals: pre-production and production; post-harvest management and value addition; and logistics, marketing and branding.

In addition to private companies, farmer producer organisations (FPOs), farmer producer companies (FPCs), federations, cooperatives, societies, partnership firms, proprietorship firms, state agriculture and marketing boards and other public sector entities are eligible  for becoming implementing agencies.

The main objective of DCP is to provide ease of access to farmers for clean, good-quality planting material. The provision of these planting materials will enhance the quality of produce at the farm level and will allow farmers to reap the benefits of exporting their crops as well. This will be possible due to the alignment of crop production with international standards.

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Govt urged to increase MSP of pigeon peas (tur dal)

Synopsis

The MSP of tur is Rs 6600/quintal, which is lower than moong’s MSP at Rs 7755/quintal. India is expected to import more quantities of tur dal to meet domestic demand as production is expected to drop. Additionally, the import of tur and urad pulses has been extended under the ‘free’ category until March 31, 2024, to ensure affordable rates for consumers.

Traders and millers of pulses have requested the government to increase the minimum support price (MSP) of pigeon peas (tur dal) to encourage the farmers to grow the pulse.

“The production of pulses has been low this year and hence the prices were ruling high. Encouragement from the government will help farmers choose the crop,” said Suresh Agrawal, president, Dal Mill Association.

Prices of tur and urad jumped 8-10% last month which prompted the central government to set up a committee to monitor the situation pulses, although the prices have dropped since then.

Agrawal added that tur takes longer time in the field compared to moong and other pulses, which makes it the least preferred legume for farmers. The MSP of tur is also lower than moong at Rs 6600/quintal as opposed to Rs 7755 of moong.

India has already decided to import additional quantities of tur dal (pigeon peas) in the marketing year 2023-24 to meet the domestic demand as production in the country is expected to drop.

The marketing year for tur is from December to November.

Tur is mainly imported from east African nations and Myanmar. The Centre had earlier extended the import of tur and urad pulses under the ‘free’ category for another year, till March 31, 2024, according to a notification by the Department of Commerce.

The decision has been taken to ensure seamless import of these pulses and palm oil to augment the domestic availability and ensure affordable rates for consumers.

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Wheat crop loss likely to be 1-2 MT due to untimely rains, overall output to reach record level, says government

Synopsis

India’s wheat production is likely to reach a record 112.2 million tonnes in the current year despite recent weather-related losses of 1-2 million tonnes, according to the country’s government. The government’s effort to procure wheat at minimum support price has already reached 7 lakh tonnes, compared to 2 lakh tonnes in the same period a year ago. Farmers have been encouraged to sell to roller flour millers directly instead of to state-owned  FCI under the Open Market Sale Scheme. The government is also considering requests for relaxed procurement norms from Uttar Pradesh, Punjab and Haryana, where quality losses have occurred due to recent rains.

he government on Friday said wheat production loss due to recent inclement weather is likely to be in the range of 1-2 million tonnes but overall production will reach a record 112.2 million tonne in the current year on higher acreage and yield. The government’s wheat procurement at minimum support price (MSP) is underway and about 7 lakh tonnes have been purchased so far, higher than 2 lakh tonnes in the year-ago period.

The Centre also asked roller flour millers to directly procure from farmers to meet their requirements instead of seeking stock from state-owned FCI under Open Market Sale Scheme.

The government also ruled out the industry’s demand to lift the ban on the export of wheat products considering the bumper output.

Releasing a private wheat crop estimate at an event organised by the Roller Flour Millers’ Federation of India, Subodh Kumar Singh, Additional Secretary in the Food Ministry said there was a difference in wheat production projected by the government and industry last year.

However this year, there are some commonalities in crop estimates. The first common thing is that there is 3-5 per cent increase in wheat acreage, the second is production loss due to untimely rains and hailstorms would be about 1-2 million tonnes and third, there would be an additional 5-5.5 million tonne production over the last year, he said.

“The production would be 5-5.5 million tonnes higher than the last year’s government estimate,” he said.

This means the overall wheat production would be touching the record 112.2 million tonne set for 2022-23 crop year (July-June) and even surpass this level.

AgriWatch had initially projected wheat output at 104.24 million tonne for 2022-23, as against 97.7 million tonnes in the previous year. However, it revised the estimate downward to 102.9 million tonnes factoring in the crop loss due to untimely rains.

In 2021-22 crop year (July-June), wheat production had declined by 1.84 million tonnes to 107.74 million tonnes due to heat waves in some parts of the growing states. Consequently, the government’s procurement had dropped to 19 million tonnes, as per the government data.

The Additional Secretary further said the surveys are important as commodity prices have gone up across the world. The production varies and estimates are important to take a policy decision on export and OMSS.

He said there is going to be a significant increase in production and the availability will be better than last year.

Stating that there is quality loss due to recent rains, the Additional Secretary said the government has taken a timely decision to relax norms for procurement for Madhya Pradesh where grain with lustre loss is being purchased at MSP.

The government is considering requests from Uttar Pradesh, Punjab and Haryana governments, he said.

“We hope the government procurement will be better this year. We will have sufficient supply of stock to meet the PDS and market intervention,” he said.

Meanwhile, domestic prices of wheat and wheat products like atta at present have declined on account of the export ban and sale of grain at discounted rates to bulk consumers via the open market sale scheme (OMSS), he added.

Speaking on the occasion, Food Corporation of India Chairman and Managing Director Ashok K Meena said about 7 lakh tonnes of wheat has been procured so far, higher than 2 lakh tonnes in the year-ago period.

“We are hopeful that a target of 342 lakh tonne of procurement will be achieved this year,” he said.

Wheat stock with FCI stood at 8.4 lakh tonne as on April 1 after taking into account the wheat sale under the OMSS, he said adding that the country has enough wheat to meet the food security demand and market intervention.

On the occasion, the Federation’s President Pramod Kumar requested the government to reconsider lifting the ban on the export of wheat products after the government’s procurement.

The government has banned wheat exports since May 22 in order to arrest the rise in domestic prices.

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About 1.5 lakh farmers practising natural farming in Himachal to be certified under PK3Y in FY24

Synopsis

According to a study, 28 per cent farmers have adopted natural farming techniques on their own through peer-to-peer learning without any training and therefore the focus of PK3Y in this financial year will be consolidation of farmers practising natural farming, said Agriculture Secretary Rakesh Kanwar.

About 1.5 lakh farmers practising natural farming in Himachal Pradesh would be certified under Prakritik Kheti Khushhal Kisan Yojana (PK3Y) in 2023-24. According to a study, 28 per cent farmers have adopted natural farming techniques on their own through peer-to-peer learning without any training and therefore the focus of PK3Y in this financial year will be consolidation of farmers practising natural farming, said Agriculture Secretary Rakesh Kanwar.

Addressing a meeting of the agriculture department officers to discuss the cluster-based agriculture development programme in the state, he said efforts would be made in 2023-24 to certify about 1.5 lakh farmers practising natural farming, a statement issued here on Friday said.

He said focus should be on consolidation of the existing farmers, increasing their area under natural farming, conducting refresher workshops, capacity building training and exposure visits.

The response and success in results on ground show that everyone is convinced that natural farming technique is beneficial and “we just need to take the practice further for overall benefits in agriculture,” he added.

Kanwar asked the department officers to identify clusters, prioritise the issues and come out with a specific need-based budget for each cluster.

State Project Director, PK3Y, Naresh Thakur said PK3Y achieved the earmarked targets in 2022-23. He said over 51,000 farmers have been certified under PK3Y for natural produce and that the natural farming model villages in the state will also be strengthened.

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Sugar output falls 3 pc to 299.6 lakh tonnes in October-March of 2022-23 market year

Synopsis

India’s sugar production fell 3 per cent to 299.6 lakh tonnes in the first six months of the 2022-23 marketing year ending September, according to industry body ISMA. Sugar output stood at 309.9 lakh tonnes in the corresponding period of the previous year.

India’s sugar production fell 3 per cent to 299.6 lakh tonnes in the first six months of the 2022-23 marketing year ending September, according to industry body ISMA. Sugar output stood at 309.9 lakh tonnes in the corresponding period of the previous year.

The sugar marketing year runs from October-September.’

As per the data, sugar production in Uttar Pradesh rose to 89 lakh tonnes during October 2022-March 2023 period from 87.5 lakh tonnes in the year-ago period.

Maharashtra’s sugar production fell to 104.2 lakh tonnes from 118.8 lakh tonnes, while output in Karnataka declined to 55.2 lakh tonnes from 57.2 lakh tonnes.

ISMA has projected production for 2022-23 to 340 lakh tonnes against 358 lakh tonnes in the 2021-22 marketing year.

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India’s Agricultural Economy with AGRITECH

Like in other parts of the globe, India’s small and marginal farmers confront various difficult obstacles that put them on the verge of poverty. The difficulties facing the over 100 million farmers dispersed across the seventh-largest country in the world must be handled methodically and carefully. The following generation of businesspeople has started creating Agriculture Technology (AgriTech) enterprises in order to achieve this. Digital technologies like Artificial Intelligence (AI), Machine Learning (ML), Big Data, Image Analytics (IA), and the Internet of Things (IoT), as well as cutting-edge business models like Software as a Service (SaaS), are being used by these startups to disrupt the agriculture ecosystem and improve the lives of Indian farmers.

Creating Opportunities from Challenges in Indian Agriculture

How significant a problem do farmers confront then? The agricultural industry in India contributes 16% of the country’s GDP, generates more than $500 billion for the economy, and employs more than 150 million people. India is the world’s second-largest contributor to agriculture after China.

86.2% of Indian farmers are tiny and marginal, with land holdings of less than two hectares and incomes of less than $150 a month, despite their significant economic contribution. Their access to markets, technology, inputs, financing, and money is constrained. Additionally to these significant problems, farmers deal with:

  • Fragmented land holdings;
  • Excessively high-interest rates on private lenders’ loans for agriculture;
  • Unreasonable costs for their goods;
  • Agronomy recommendation not supported by science
  • Losses following harvest brought on by inadequate storage facilities;
  • Inefficient supply chains.

Origins and Development of Indian Agritech

Agritech startups that are focused on resolving these important concerns have prospered during the past ten years. These cover a wide range of topics, including farm-to-fork brands that streamline the rural supply chain and improve warehouse infrastructure, B2B Agri markets, and rural fintech solutions. There are already more than 1500 agri startups functioning in India, according to studies, with an estimated 25% annual growth.

By 2025, it is predicted that the market potential for Indian agritech businesses would reach $24 billion USD. Over the next ten years, agritech is anticipated to flourish as a result of several unexplored market prospects, rising interest from international investors, and more government backing.

Redefining Farmers’ Lives

At every point along the value chain, agritech firms are challenging the way agriculture is now practiced.

Precision farming and agri-consulting Through weather, data on the condition of the soil, and expert agronomic advice, startups are increasing production. helping farmers use systematic agricultural techniques based on actual circumstances and using image analytics to detect pests and illnesses on crops These aid farmers in up to 30% crop output improvement.

Through transparent online price discovery for inputs and outputs, supply chain optimization and output market linkage for agri-inputs (seeds, insecticides, etc.) enable farmers to increase their returns. Due to a lack of adequate transportation and storage options, 40% of the product is squandered. Startups are attempting to make the agro supply chain more efficient to cut down on food waste, boost production, and boost farmer income. By combining technology and physical infrastructure, more accurate price realization may be achieved along the whole Agri value chain. The situation benefits both farmers and consumers.

Authenticity and quality control Startups provide farmers with incentives and higher payments for a superior product.

Financial services firms make agricultural financing transparently available to farmers at low-interest rates so they can cover their crop expenditures. In addition, they offer crop insurance to cover losses from pests, illnesses, and bad weather.

Additionally, the government has heavily subsidized the use of drones in Indian agriculture. It provides financial assistance to farmers who rent inexpensive drones to monitor crops and apply agrochemicals and fertilizers. Small and marginal farmers may now access expensive equipment and tools on a pay-per-use basis thanks to drones and agricultural equipment rental firms.

Conclusion 

The crucial barriers outlined above have historically stopped Indian agriculture from realizing its full potential. But the current boom in agritech businesses and the quickening use of digital technology will be key components in resolving these long-standing problems. If we want to keep advancing innovation, enhancing the supply chain, and eventually rebalancing the profit share and improving farmer livelihoods, we must ensure that there is increased and ongoing investment in agritech.

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Punjab farmers to get 33% subsidy on cotton seeds

Describing crop diversification as a critical necessity for the state, the Punjab Chief Minister Bhagwant Mann on Thursday asked farmers to take up crops like Cotton, Basmati Paddy, and Moong and not to take up regular paddy which consumes high quality of water.

In a video message to the farmers of the state, the Chief Minister said several crops were grown on the fertile land of the state but gradually the farmers of the state confined them to regular paddy only. He said that this has adversely affected the topography of the state in terms of excessive power consumption, depletion of the water table, and pollution due burning of stubble. Bhagwant Mann said that to tackle this the need of the hour is to adopt alternative crops.

The Chief Minister confirmed to provide farmers with canal water for cotton crops from April 1 and announced a 33% subsidy on cotton seeds certified by Punjab Agricultural University (PAU). The state will also provide insurance on cotton crop and MSP on Basmati.

The Chief Minister said that Deputy Commissioners and Senior Superintendents of Police have been instructed to depute the Police force for checking the theft of water so that farmers can be benefitted.

Bhagwant Mann said that farmers had also raised the issue of canal water theft by affluent people. Ensuring water supply will help in producing good quality cotton. He further requested the farmers avoid the use of spurious seeds.

Speaking about the other steps to promote crop diversification, the Chief Minister announced a 33% subsidy on cotton seeds certified by PAU Ludhiana thereby the high-yielding seeds will be available at cheaper rates for farmers. He said that preventive measures were also being taken to check the attack of White fly and Pink bollworms. Bhagwant Mann emphasized that the state government has decided to conduct comprehensive research on new insecticides and pesticides to control these problems.

Reiterating his commitment to safeguarding the interests of farmers from all-natural calamities, the Chief Minister also announced that the state government is mulling covering the cotton crop loss under an insurance scheme so that the farmers don’t face any hardships. He further said that basmati paddy has been promoted as the crop for diversification and assured Minimum Support Price (MSP) on it. Bhagwant Mann said that Markfed will be the nodal agency to procure Basmati on MSP.

The Chief Minister said that laboratories are also being set up to inform the farmers about the quantity of insecticides to be used on Basmati so that it meets the export standards of European countries on pest residues.

Recommending the cultivation of PR 126 & other similar varieties of paddy, he said that special emphasis is being given to promote PAU-certified varieties and discouraging the water-guzzling varieties such as PUSA 44 which is a long duration variety.

Bhagwant Mann also said that MSP will be continued on Moong but recent research showed that the crop gets affected by white fly which then moves to cotton crop. He further suggested farmers not to cultivate Moong in Mansa, Bathinda, Mukatsar Sahib, Fazilka districts where is is prevalent. Meanwhile, Bhagwant Mann said that 2500 Kisan Mitra will be deputed along with 100 Agriculture experts of PAU to update farmers about these menaces.

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Punjab FM presents Rs 1.96 lakh crore budget for 2023-24; agriculture, education health key focus areas

Synopsis

Punjab Finance Minister Harpal Singh Cheema presented a Rs 1.96 lakh crore budget for 2023-24 on Friday. The budget has a focus on agriculture, education, and health segments, with total budget size increased by 26% to Rs 1,96,462 crore. The budget is the first full budget of the AAP government. After coming to power in March 2022, the AAP government first passed a vote-on account on March.

Punjab Finance Minister Harpal Singh Cheema presented a Rs 1.96-lakh-crore state budget for 2023-24 in the assembly here on Friday which focussed primarily on agriculture, education and health sectors. Cheema announced various new schemes such as a market price risk mitigation scheme for the horticulture sector, solarisation of agriculture pumps, a young entrepreneur scheme and two coaching initiatives for students in the first full budget of the AAP government.

Speaking in the Assembly, Harpal Singh Cheema said education, health, and agriculture are among the priority sectors for the government.

Total budget size has been increased by 26 per cent to Rs 1,96,462 crore for 2023-24 over the previous year, the state finance minister said.

It was the first full budget of the AAP government. After coming to power in March 2022, the AAP government first passed a vote-on account on March 22 and then it presented its budget in June for the remaining part of the year.

Opposition Congress MLAs staged a walkout from the House while FM was reading out the budget speech after the Speaker did not allow Punjab Congress chief Amrinder Singh Raja Warring to raise a point of order.

During his speech, the state finance minister said the AAP government is working to provide clean, effective and efficient governance and he targeted the previous regimes of leaving the state in a financial mess.

He also targeted the Centre, accusing it of turning a deaf ear to the long pending legitimate demands.

The Finance Minister proposed an allocation of Rs 13,888 crore for the agriculture and allied sector, up by 20 per cent over the previous budget. The government will soon come out with a new agriculture policy for which a committee of experts has been formed, he said.

A sum of Rs 1,000 crore has been allocated for crop diversification. A revolving fund for Basmati crop purchase has also been set up, he said.

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Rs 900 crore sanctioned for holistic development of agriculture sector in J-K

Synopsis

Director Agriculture production and farmers welfare department said besides educating farmers and agri-Startups about the latest developments, the event has been organised with a focus to encourage farmers to adopt cultivation of Millets.

An amount of Rs 900 crore has been sanctioned by the Centre for holistic development of the agriculture sector in Jammu and Kashmir, a government official said, participating in a ‘Kisan Mela’ here. The day-long Mela evoked a massive response with over 900 farmers and other stakeholders including agri startups turning up to know about the latest scientific farming techniques and different government schemes.

Director Agriculture production and farmers welfare department said besides educating farmers and agri-Startups about the latest developments, the event has been organised with a focus to encourage farmers to adopt cultivation of Millets.

“The central government has sanctioned Rs 900 crore for holistic development of the agriculture sector with focus on doubling the income of farmers in J&K,” he said.

The Kisan Mela, inaugurated by Deputy Commissioner Vishesh Paul Mahajan, was held at community Hall, marking the beginning of agricultural activities after prolonged winter in the hilly district.

The stalls, which were set up, showcased advanced farm technologies, indigenous farming methods and other innovative techniques developed by various companies, startups owners and progressive farmers.

“We are planning to completely switch over to Millets by 2047 to meet the demands of the coming generations,” Sharma said.

Progressive farmers and agri-Startups expressed gratitude to the government for organising the event at the beginning of agricultural season in the district.

“I have been practising organic farming for the past 20 years. I grow Quinoa, buckwheat, red paddy, vegetables and apples among others and I am aware of the fact that organic farming leads to environment protection, good soil health, saves water and reduces input cost.

“For seed treatment and insect-pest and disease management, I only use organic manure,” farmer Balwan Singh (64) of Chirala said.

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