KARACHI, July 3: The Agriculture Credit Advisory Committee (ACAC) has fixed Rs160bn credit target for the current fiscal year and has also constituted a committee to remove serious provincial disparities in growth of agricultural credit disbursements.

The target is 23pc higher than the last fiscal year’s target of Rs130bn.

The ACAC in its annual meeting held here on Monday, with SBP Governor Dr Shamshad Akhtar in the chair, took serious note of regional and provincial disparities in growth of agricultural credit disbursements.

The SBP governor set up a special committee of five big commercial banks and Zarai Taraqqiati Bank Limited to prepare a report in order to identify issues and constraints impeding credit delivery at provincial level and suggest corrective measures within one month.

There have been complaints from small provinces that the agriculture credit used to accumulate in one province depriving others to get benefit from the huge allocation of Rs160bn.

The committee also made the province-wise allocations of disbursements, based on the cropped area and absorption capacity of each province and AJK and FATA.

The committee also impressed upon the provincial governments to take initiatives to make the farming community of their respective provinces and regions attractive for banks’ investment.

The SBP governor underscored that these targets should be treated as ‘minimum achievements’ required from the banks.

The five big commercial banks -- ABL, HBL, MCB, NBP and UBL -- had been allocated a target of Rs80bn, Zarai Tarqqiati Bank (ZTBL) Rs48bn, Punjab Provincial Co-operative Bank Ltd (PPCBL) Rs9bn and Domestic Private Banks (DPBs) as a group Rs23bn.

The committee expressed its satisfaction over the farm credit disbursement during July-May 2005-06 that had reached to Rs117bn, which was 25.8pc higher than the disbursements of Rs93bn the same period of 2004-05.

The five big commercial banks as a group disbursed Rs59.8bn against the full year target of Rs63bn. Zarai Bank, PPCBL and DPBs disbursed Rs38.8bn, Rs4.5bn and Rs13.9bn against the target of Rs43bn, Rs9bn and Rs15bn respectively.

The committee was informed that the disbursements to farm and non-farm sectors as a whole during the first 11 months of 2005-06 remained more or less as per target with farm sector achieving 81.8pc (Rs95.7bn) against the target of 80pc and non-farm sector 16.3pc (Rs19bn) against the target of 16pc.

The committee expressed the hope that the banks would take necessary steps to further accelerate the pace of credit disbursement to the agriculture sector so that target of Rs160bn for 2006-07 would be achieved comfortably.

The committee noted that the small farmers (farmers having landholding up to subsistence level) attracted 67pc, economic holding (medium farmers) 23pc and large farmers (above economic holding) received 10pc of total disbursement made to the farm sector.

The ACAC was informed that the SBP, in consultation with stakeholders, was in the process of framing guidelines to facilitate and encourage banks to build up their portfolio in the livestock sector. These guidelines, likely to be notified this month, were aimed at increasing the flow of credit to livestock sector that promises rich returns to the dairy growers, the banks and the economy as a whole.

The allocation for livestock sector has accordingly been raised to 15pc of total disbursements as compared to 8pc last year.