The government has come up with a new deal for farmers that is all-embracing, and should produce positive results in the farm sector which has been lagging far behind other sectors in its growth rate.
President Pervez Musharraf has taken the lead in this area and held a Kissan Convention in the President's House and announced a comprehensive package of concessions. The most radical of the reforms is reducing the interest on agricultural loans from 14 per cent to 9 per cent. And if the loans are paid in time, the rate of interest would be reduced to 8 per cent. At a time when major industrial units are getting bank loans at 4 to 6 per cent interest it was grossly unfair to charge 14 per cent interest on agricultural loans.
In addition to lowering the interest rates the total of the agricultural loans is to be raised to Rs80 billion. And in addition to the Zarai Taraqiati Bank the commercial banks are to be encouraged to give agricultural loans to the farmers.
Prices of agricultural inputs are to be reduced, beginning with a Rs100 reduction per bag of DAP fertiliser. The duty on materials used for the making of pesticides is also to be abolished.
A crash programme is to be launched for lining 87,000 water courses in three to four years at a cost of Rs66 billion. In the area of import of agricultural implements vast concessions have been announced, which include abolition of import duty on implements not manufactured in Pakistan. Establishment for new tractor factories is to be allowed.
Permission for the import of tractors below 35 horse power and above 100 horse power is to be given without general sales tax or withholding tax, and with import duty of 10 per cent only.
Old agricultural borrowers are to get fair concessions. Loans upto Rs500.000 defaulted beyond December 31, 2000, will stand fully paid up on payments of 50 per cent of the amount outstanding. This concession will benefit 250,000 borrowers.
The Zarai Taraqiati Bank will no longer exercise powers under the Land Revenue Act through which it used to ask the Tehsildars and the police to arrest people for not returning loans.
From now onwards no farmer will ever again have to suffer the humiliation of arrest for non-payment of loans to ZTBL. he said.Agricultural credit had by now reached Rs. 65 billion, and by next year it will increase to Rs.100 billion, he said.
He spoke of the water projects under execution beginning with raising the level of Mangle Dam and said when these projects are completed some 2.88 million acres of land would become available for cultivation and he stressed the country would still need two large dams to meet its water needs within 15 years.
Concessions for the import of tractors and other agricultural implements have been given without hurting the home tractor industry which has not been able to meet the total demands for tractors within the country. Now the existing tractor factories can set up additional units or expand their capacity to meet the increasing demand for agricultural implements within the country.
The country used to import two to four million tonnes of wheat but after the support price for wheat was raised from Rs240 to Rs300 for 40 kgs, production shot up to 21.1 million tonnes and the country thereafter exported 1.7 million tonnes of wheat.
What is obvious is incentives to the farmers do help increase the output promptly and the country gains by that quickly. The President has appointed Jehangir Khan Tareen MNA as the Chief Coordinator of the President's Programme for Water Course Lining which is to be launched on July 15 in all the four provinces.
Lining the canal not only checks waste of water but also makes more water available for cultivation to the tail-enders who now complain of not getting water. It reduces, if not prevents, water-logging and salinity which reduces the productivity of the soil. Far more land would in future become available for cultivation.
Cheaper agricultural inputs like DAP fertilisers and pesticides and easy availability of tractors and other agricultural implements should increase the agricultural output. And the availability of cheap credit without the fear of arrest in case default should encourage the farmers to borrow more and produce more.
But the government has to take measures to ensure that the large agricultural credit borrowed at cheap rates of interest is truly used for maximising agricultural output and not spent on lavish weddings and fleets of luxury limousines and the repayment is avoided as there is now no fear of arrest for defaulting repayments of ZTBL loans.
The farmers should now be encouraged to own their own transport vehicles like trucks and pick-ups to carry their goods to the market. That will enable them get better returns for their products instead of the middle-men getting far more than the producer and the consumer.
Prosperity in the rural areas, including increasing employment, will prevent the rush to the cities and the increase in the number of slums in the urban areas of the country.
Measures will also have to be taken to reduce or eliminate gross wastage at the stages of harvesting, storage and then transporting the agricultural products to the markets. A great deal is wasted through this means, which must go now.
The government has been talking of dust-free and pest-free cotton which will fetch around 10 cents more for our cotton abroad than it does now. Positive efforts have to be made in that direction by the farmers as a whole instead of a small section of them.
A great deal has been said in the country about the need to develop agro-based industries, both to earn more from agriculture as well as provide more employments in the rural areas. Not much has happened in that direction.
Live-stock development should have a far higher priority now that it has at a time when we are exporting cattle legally or illegally. The milk yield per cow is also very low.
Dairy farming should be developed in the rural areas with singular determination unlike in the past when lip service was paid to the industry. The country needs far more milk for the young and others, and for export.
Fisheries too demand more attention instead of using the wrong net to match the little fish in the breeding season. Until recently it was said a great deal of the resources of the rural areas has been transferred to the cities through cheap wheat and rice and cheaper cotton which helped to develop the textile industry.
That imbalance is coming to an end now when cotton farmers are allowed to export their cotton, and textile mills are allowed to import cotton from abroad, including India. And now the rural area have to be developed and enriched to prevent more and more people from there coming to the slums in the urban areas and adding to the Kachchi Abadis. What the President has announced is the beginning. Far more has to follow to carry it to its logical conclusion.
