Budget 2026–2027: Re-engineering the Agricultural Sector

The 2026–2027 Budget outlines a series of measures aimed at re-engineering traditional sectors and enhancing their competitiveness as part of the Government’s strategy to build a future-ready economy anchored in a forward-looking, inclusive and higher-growth trajectory. Particular emphasis is being placed, among others, on revitalising the agricultural sector.

To boost sugar production and achieve the target of 250,000 tonnes by 2030, the Government will allocate Rs 100 million annually over the next three years for the rehabilitation of 500 hectares of land owned by small and medium planters.

Measures are also being introduced to enhance tea production. A grant covering 50 percent of replantation costs, up to a maximum of Rs 25,000 per arpent, will be made available to small tea growers. The initiative is expected to increase tea production by 50 percent by 2029.

In a bid to promote agroforestry and strengthen climate resilience, a Forest Bill will be introduced. An agroforestry project will also be implemented to serve as a resource centre for researchers and farmers while supporting the production of safe food for the local market and reinforcing national food security objectives.

Moreover, the Government is further investing in livestock development to increase local production. Measures include:

An allocation of Rs 45 million for the upgrading of farm buildings, goat reproduction farms, and the expansion of cattle and sheep reproduction farms to increase the supply of breeding stock;

Rs 75 million to subsidise the purchase of animal feed by breeders;

Rs 27 million under the Livestock Development Scheme to support the purchase of animals and equipment, as well as veterinary services; and

Rs 50 million for the construction of a modern veterinary hospital.

In addition, the Government will be implementing a ‘25by35’ Food Security Project with the aim of producing at least 25 percent of the food requirements with minimum dependence on imported inputs by the year 2035. Consequently, the Food and Agricultural Research and Extension Institute Act 2013 will be amended to empower the Institute to implement and deliver the ‘25by35’ Food Security flagship project in a coherent and holistic manner.

A Food Security and Nutrition Bill will also be introduced to promote contract farming, double the amount of land devoted to food production to 25,000 arpents by 2035, and fast-track the recruitment of foreign labour across all skill levels in agriculture.

22 June 2026

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Topics: Agriculture