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Agri Stocks Surge as Budget 2024 Announces ₹1.52 Lakh Crore in Reforms
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Last Updated: 23rd July 2024 - 04:29 pm
Agricultural stocks surged up to 11% after Finance Minister Nirmala Sitharaman announced new initiatives to boost agricultural productivity and the production of pulses and oilseeds in the Union Budget 2024. The budget allocated ₹1.52 lakh crore for agriculture and allied sectors.
Following the announcement, shares of agriculture-related companies like Kaveri Seeds, Jain Irrigation Systems, Mangalam Seeds, JK Agri Genetics, Nath Bio-Genes, Dhanuka Agritech, and ShreeOswal Seeds increased between 2 and 11%.
Kaveri Seed share price surged nearly 11% to ₹1,073 during morning trade around 11:30 am IST, reaching a 52-week high of ₹1,099.95. Meanwhile, Jain Irrigation Systems saw a gain of nearly 2%, trading at ₹72.30 around the same time.
Mangalam Seeds share price advanced 6.81% to ₹264.95, and JK Agri Genetics gained 2.24% to ₹447.20. In contrast, the benchmark BSE Sensex was down 121 points, or 0.15%, trading at 80,380 around the same time.
The market reacted positively to the government's commitment to support farmer incomes and invigorate the rural economy. Sitharaman emphasized the importance of productivity and resilience in agriculture, introducing 109 new high-yielding and climate-resistant crop varieties as a priority.
T Manish, a Research Analyst at SAMCO Securities, identified Kaveri Seeds and Dhanuka Agritech as primary beneficiaries of these announcements.
Additionally, Sitharaman outlined a focus on agricultural research to enhance productivity and promote climate resilience, along with bolstering the production of pulses and oilseeds. She also discussed the Atmanirbhar Oilseeds Abhiyaan, aiming for self-reliance in oilseeds like mustard, sesame, sunflower, groundnut, and soybean.
"We will promote farmer producer organizations, cooperatives, and startups. We will also utilize digital public infrastructure in agriculture to cover farmers and lands within three years," stated Sitharaman.
Inflation, exacerbated by climate change, remains a challenge for the agriculture industry. The industry hopes for government incentives for key crops to boost farmer incomes and mitigate food inflation.
Despite expectations for improved rural consumption, recovery has been slow due to adverse weather conditions and the rapid impacts of climate change, which have pressured the agrochemical industry's financials. The industry relies on government support through schemes and incentives to revitalize the rural economy.
Inflation continues to pose a significant challenge, compounded by climate change. The government is anticipated to announce incentives for key crops to enhance farmer incomes and address persistent food inflation. Additionally, robust crop insurance mechanisms are expected to mitigate the damage caused by fluctuating weather conditions.
The industry is also hopeful that the government will take steps to enhance access to credit for long-term loans, which would support growth, productivity, and farm incomes.
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