He announced an increase in bank lending for farm sector as well as interest subsidy to farmers who pay short-term crop loans on time. "I propose to enhance additional subvention to 3% in 2011-12. Thus effective rate of interest for farmers will be 4% per annum," Pranab Mukherjee said. Banks have also been asked to step up direct lending for agriculture to small and marginal farmers.
He also announced launch of National Mission for Protein Supplements and National Mission for Sustainable Agriculture. The government plans to promote organic farming and combining modern technology with traditional farming to maximize crop yields and sustain productivity.
Mukherjee also announced the setting up of vegetable clusters in four major urban centres to meet growing demand. To extend the Green Revolution to the eastern region, he announced an allocation of Rs 400 crore. Steps to raise storage capacity, cold chains and mega food parks were also announced. Cold chains and post-harvest storage facilities have been given infrastructure status that is expected to attract private investment.
Mukherjee also provided Rs 300 crore to promote 60,000 pulses villages in rainfed areas for raising productivity and strengthening market linkages. Another Rs 300 crore was set aside for palm oil cultivation.
Analysts said some of the moves were bold but overall it is unlikely to impact the farm sector in a significant manner.
"Overall, it’s an average Budget and lacks the reforms agriculture needed. These steps cannot give you sustained growth in agriculture," said Ashok Gulati, director, International Food Policy Research Institute.