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Kick-starting agricultural activity   
 
THE State Bank of Pakistan has received input from banks on what needs to be done to facilitate flood-hit growers across the country, particularly in the Rabi sowing season. This would provide a basis for an immediate agricultural revival
package that the central bank may announce shortly.

The Agriculture Finance Committee comprising representatives from NBP, HBL, Faysal Bank, UBL, Askari Bank and ZTBL has submitted its report. Now, the newly-appointed SBP Governor Mr Shahid Kardar is expected to announce a set of
guidelines for concessional agricultural financing in flood-hit areas.

Bankers say the SBP is devising a concessional agricultural refinance scheme for banks to ensure availability of adequate financing to flood-affected farmers at single –digit interest rates.

Banks will have to extend larger amounts of crop loans at cheaper rates to reactivate agricultural activity. But bankers say they will also have to build a mechanism for heavier disbursement of development loans to enable flood-hit farmers to buy
agricultural implements and inputs and to repair damaged water courses.
 

 


Banks provide farm loans to about 1.4 million growers or one fifth of an estimated seven million potential borrowers. “Most of small and medium-sized growers have no access to agricultural loans and they borrow from informal sources,” said the
head of an agricultural credit of a large local bank.

Farmers estimate cumulative annual demand for crop and agricultural development loans at Rs2000 billion whereas banks’ lending remains below Rs300 billion. “Filling in this gap is a long-term policy issue. Banks should focus now on additional
demand for agricultural loans created after the floods, said a central banker. Initial estimate of this additional demand is Rs250 billion. Final estimate would emerge once the SBP and the federal and provincial governments come up with precise
calculations.

Government officials say they are seeking soft credit lines from the World Bank and the Asian Development Bank which can be used for providing agricultural development loans to farmers.
 

 

The federal ministry of food, agriculture and livestock and provincial agriculture departments are also working on agricultural revival plans. And global help is being sought from donor countries and international financial institutions to kick-start
farming activities and to develop a long-term strategic support programme. “We hope to put all things together in a comprehensive package and announce at least the short-term part of it very soon,” a senior official of the ministry of food told
Dawn.

The floods have washed away at least five million acres of cultivated land and thick layers of silt over farming land have erased or blurred demarcation lines that separate one piece of land from the other. Growers say before the government
announces any policy package for agricultural revival it must ensure instant removal of silt so that flood-hit farmers can start sowing Rabi crops instead of fighting with each other over the ownership of land.

“This ought to be the first step in agricultural revival plan,” says chairman of Pakistan Agri Forum Mr Ibrahim Mughal. In the second step the government should provide agricultural implements to farmers of flood-hit areas so that they can start
preparing land for Rabi crop sowings.

“Tens of thousands of agricultural implements including cultivators have either been washed away or damaged beyond repair. Provincial agriculture departments can ensure provision of such implements to farmers. We have plans to arrange
agricultural tools and implements to farmers of flood-hit areas,” said an official of Sindh agriculture department without elaborating on it.

The floods have also damaged at least 7000 water courses and without their immediate repairing irrigation of Rabi crops of wheat, gram and canola and sunflower would become too difficult. Officials claim they are employing human and material
resources of agriculture and irrigation departments for repairing water courses besides encouraging cooperative societies of farmers to accelerate self-help operations.

Growers say, once the flood-hit farming land is demarcated again, farmers get back agricultural tools and implements for land preparation and water courses are repaired only then they would need crop seeds for Rabi sowing. Later on, they would
also require enough fertiliser.

The government has already announced to provide free of cost canola and sunflower seeds to farmers of flood-hit areas for Rabi crop sowing starting next month. The ministry of food, agriculture and livestock plans to provide free canola seeds for
cultivation on 100,000 acres in flood-affected areas.

Sunflower production is expected to be higher this year because it can now be sown in the rice belt of upper Sindh, where floods have increased fertility

Sindh Abadgar Board President, Mr Abdul Majeed Nizamani says that during the current Rabi season sunflower can be sown over 1.5 million acres in Sindh alone against 400,000 acres in past years. Additional cultivation of this important oilseed
would help reduce edible oil import bills besides boosting rural incomes.

The federal government has set a target of 25 million tonnes wheat production this year and officials say that plans for free distribution of wheat and gram seeds are on the cards.

To supplement government efforts in this regard, the Food and Agriculture Organisation of the UN has also promised to distribute free of cost seeds for Rabi crops to 200,000 farming families in the first phase. It has indicated to double the number
of such beneficiaries in the second phase.

The government has also sought support from donor countries including Australia for free supply of seeds of wheat, gram, canola and sunflower.

“The government must ensure that seeds for Rabi crops should be sprayed with medicines before distribution among farmers. Otherwise, stocks of free seeds could be black-marketed and wheat and gram seeds may be used even for
consumption as food,” warns Mr Ibrahim Mughal.

Along with supply of free seeds, farmers of flood-affected areas would need fertiliser at concessional rates. Here again, growers warn that bags of fertiliser meant for flood-hit farmers ought to be clearly marked to avoid their black- marketing and
misuse.

Courtesy: The DAWN
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