Strengthening Allied Sector and Market Access

₹30,000 Crore Allocated for Allied Sector Infrastructure: Will It Create Lasting Market Access?

On March 2, 2026, the Union government announced a ₹30,000 crore package aimed at strengthening allied agricultural sectors like dairy, fisheries, and beekeeping while improving market access for small and marginal producers. The scheme, under the ambit of the National Mission on Sustainable Agriculture (NMSA), promises better storage facilities, cold chain logistics, and dedicated export zones for high-value non-crop produce. The Ministry of Agriculture sees this as a transformational pivot towards diversifying farmers' incomes. But the real question remains: Can this initiative break entrenched barriers of fragmented supply chains and opaque market structures?

The Institutional Framework: Layers of Ambition

Dairy, fisheries, and non-timber forest produce (NTFP) are already governed by various independent schemes. The Dairy Infrastructure Development Fund (DIDF), for instance, is managed by the National Dairy Development Board (NDDB), receiving a budget infusion of ₹4,000 crore since 2019. Likewise, the Department of Animal Husbandry and Dairying oversees the Matsya Sampada scheme for fisheries, which has an allocated ₹20,000 crore to boost exports and livelihood support. Now, the new package consolidates these efforts, targeting integrated value chains.

The administrative load will fall primarily on state-level Agriculture Departments and Panchayati Raj Institutions (PRIs). Policy documents reference marketing reforms under the Agricultural Produce Market Committee (APMC) Acts, but paradoxically, this sector has seen resistance to deregulation since the Farm Laws rollback of 2021. While NMSA provides the overarching policy umbrella with Section 8 explicitly addressing allied sector clusters, execution depends on the Centre-State coordination—which has historically been spotty.

Policy Depth: The Promise vs. Ground Realities

Key provisions of the announcement flaunt ambitious targets: reducing post-harvest losses by 30% in 5 years, increasing exports of fisheries by 40%, and ensuring direct procurement agreements for 15 lakh producers through Farmer Producer Organisations (FPOs). Yet, the backdrop is sobering. Rural logistics infrastructure has an annual shortfall of ₹12,000 crore according to NITI Aayog estimates, particularly in cold storage systems that allied sectors desperately need.

Previous examples cast a shadow over optimism. Consider the fate of the ₹10,000 crore Gramin Bhandaran Yojana (Rural Storage Scheme). Despite noble objectives of decentralizing storage facilities, the scheme largely benefited traders rather than marginal farmers due to subsidy leakage. An audit by the Comptroller and Auditor General (CAG) in 2023 underlined that only 21% of storage units were operational five years after approval.

Another stark reality is the market stranglehold of intermediaries in sectors like dairy. Milk cooperatives control procurement but often exclude micro-dairy owners from premium deals such as organic milk sourcing. Similarly, fisheries remain shackled by fragmented export regulations—raising concerns that any "dedicated zones" under the new package might reproduce such exclusions rather than dismantle them.

Structural Tensions: Centre-State Collaboration or Friction?

The budgetary design underscores that 60% of the funds require matching contributions from states. This is a potential flashpoint. Several cash-strapped states, particularly those dependent on compensation under GST transitions, may find it difficult to allocate resources despite pressing allied sector needs. This mismatch mirrors the tension witnessed during the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), where states routinely underspent recommended irrigation allocations.

Another issue is inter-ministerial coordination. While dairy falls under the Ministry of Animal Husbandry and agriculture under its respective Ministry, fisheries are split across multiple sub-departments for inland, marine, and exports. The absence of a unified oversight body increases the risk of fragmented implementation. Would the allied sector package then succumb to the kind of bureaucratic vertical silos that have plagued agricultural subsidy schemes in general?

International Comparison: Lessons from New Zealand

New Zealand has a robust framework for supporting allied sectors, particularly dairy and fisheries. Through the Primary Sector Collaborative Workstream, the government intervenes not just in production but also in long-term private sector partnerships for market access. Fonterra, New Zealand's dairy giant, exemplifies how cooperative models thrive when supported by targeted regulations for both domestic supply and high-tech exports. Unlike India, New Zealand's integrated cold storage systems reduce losses to less than 5%—a stark contrast to India's figure of 15-20%. This underscores the necessity of syncing infrastructure with policy goals.

Metrics for Success: Can the Package Deliver?

For the ₹30,000 crore allocation to drive meaningful progress, several metrics must emerge. These include:

• The actual operationalization rate of cold chains within 3 years. Targeting 70% functionality would be pragmatic.
• The quantum of fixed export contracts secured by FPOs outside intermediary control.
• An independent audit mechanism to track state-level spending, akin to mandatory disclosures under the Fiscal Responsibility and Budget Management Act.

Will mere budgetary infusion transform systemic issues of exclusion? Success depends on sustained Centre-State partnerships and whether marginalized producers—not just large cooperatives—see tangible benefits. Political will, rather than policy design alone, will determine outcomes.

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