Sandalwood, coconut and cocoa farming get Budget boost

The government has announced a major push for high-value agriculture in the Union Budget 2026-27 with targeted support for coconut, sandalwood, cocoa and cashew to boost farm incomes, productivity and rural employment.

Union Finance Minister Nirmala Sitharaman said the government aims to diversify farm output and strengthen value-added agriculture by promoting region-specific, high-value crops. Coastal regions will receive focused support for coconut, sandalwood, cocoa and cashew cultivation, while agar trees will be promoted in the North East. In hilly regions, the government plans to support nut crops such as almonds, walnuts and pine nuts.

Highlighting India’s dominance in coconut production, the Finance Minister noted that India is the world’s largest producer of coconuts, with nearly 30 million people dependent on the crop for their livelihoods. This includes around 10 million farmers engaged in coconut cultivation and allied activities.

Also Read: How this Goa family earns Rs 42 lakh per acre from coconut farming

The revival of coconuts

To strengthen the sector, she announced a new Coconut Promotion Scheme, aimed at increasing production and improving productivity in major coconut-growing states. The scheme will focus on replacing old and non-productive coconut trees with new saplings and improved plant varieties, along with other interventions to enhance competitiveness and farm-level returns.

In a separate announcement, the Finance Minister proposed a dedicated programme for Indian cashew and cocoa, to reduce import dependence and make the country self-reliant in raw cashew and cocoa production and processing. The programme will also focus on improving export competitiveness and positioning Indian cashew and cocoa as premium global brands by 2030.

She said the initiative would strengthen domestic value chains, encourage processing and branding, and create new employment opportunities across producing regions.

The sandalwood ecosystem

The Budget also laid special emphasis on sandalwood, a crop deeply connected to India’s social and cultural heritage. The government plans to partner with state governments to promote focused sandalwood cultivation and strengthen post-harvest processing infrastructure.

Also Read: How this engineer turned barren land into organic sandalwood and fruit farm

The aim is to revive and restore the Indian sandalwood ecosystem, which has faced decline due to overexploitation and limited organised cultivation in the past.

Sandalwood is a highly profitable, long-term crop offering massive returns (often 20 to 30 times the investment) due to its high-value heartwood and oil, fetching thousands per kg. Mature trees (over 15 years) yield significant income, with demand driven by cosmetics, pharma, and rituals.

Agriculture experts say the announcements signal a clear policy shift towards high-value and plantation crops that offer higher income potential compared to traditional staples. If effectively implemented, the measures could help farmers diversify income sources, boost exports and create long-term employment in rural and forest-linked economies.

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