THE Punjab government’s plan to disburse interest-free loans for rabi and kharif harvests 2016/17 under its Kissan Package among 600,000 farmers — a majority of them being landless farmers or small holders with land holding of up to five acres — seems to have hit a snag.

The authorities tasked to identify eligible farmers have so far proved ‘incapable’ of finding suitable applicants as just a little more than a third of the targeted number could be registered in spite of four and a half months of the registration process.

This means a majority of the targeted eligible farmers will not be able to access the interest-free loans for their rabi crop. Many may be left out of the scheme for the kharif season as well unless the registeration process speeds up.

The apparent reasons for non-identification and non-registration of 70pc new borrowers including landless farmers (tenants) are complex procedures and ‘vague’ and ‘strict’ selection criteria.

Owing to the ‘haphazard’ approach — that began from September 2016 — the figures of the total number of registration released by the Punjab Land Record Authority (PLRA) and the Punjab Agriculture Department (PAD) as of January 26 do not even tally.


Officials say it is very difficult to identify 70pc new borrowers with a clean repayment track record


The PLRA record says the144 tehsil centres in 36 districts registered 211,369 farmers, 12,500 landless farmers (tenants) and 199,000 landowners. However, the PAD statistics show the total number of registration as of Jan 26 was 195,065 — 10,269 tenants and 184,796 land owners.

About 15,000 applicants have been disbursed the first tranche of rabi loan by two banks and three microfinance institutions as per PLRA record. The authority does not maintain the record loan disbursement amount. PAD, on the other hand, puts the figure at 17,367 applicants with disbursed amount of Rs1.239bn.

The five-year-package is aimed at facilitating 70pc new borrowers either having small holdings or working as tenants. However, 30pc farmers availing the facility but with clean credit history can also apply. Any interest accrued on financing beyond five acres shall be on the account of the borrower availing the financing facility.

The government intends to provide Rs25,000 per acre for rabi crop and Rs40,000 per acre for kharif crop with three installments on seasonal basis.

Interestingly, the Shahbaz-led government had claimed to provide markup-free loan for all farmers, but its eligibility criteria imposes markup from third year for those farmers who want to avail credit for five consecutive years.

Under the required obligation, farmers will pay markup at 4pc for the third year, 8pc for the fourth year and 12pc for the fifth year. The applicant is also required to have cleared one seasonal loan before acquiring the loan for the next sowing season.

In background discussions with Dawn, officials say it is very difficult to identify 70pc new borrowers with clean repayment track record.

Officials point out that the condition of mortgage of land against loan is a hurdle in achieving the target of 600,000 because a good number of farmers have already pledged their lands with commercial banks for acquiring loans.

They agree that the provincial government has adopted a strict criteria to discourage misuse of such loans owing to the past track record of farmers.

Analysts also blame the strict eligibility criteria and the agriculture department’s inability to identify the tenants and farmers with small holdings through its field formations.

They also criticise the criteria which requires the loan applicants for submitting their computerised national identity cards, computerised certificates of accession and land ownership documents.

Other contributing factors restricting applicants from getting loan are criteria of selected crops of cotton, wheat, rice and maze and applicants from the same family.

Analysts say the registration of only 12,500 tenants implies that the government’s efforts to cover poor farmers is extremely discouraging.

As per the registration procedure, an applicant first comes to any tehsil land record centre with the required documents from where the centre’s officials upload his data on the e-portal (e-pass book) of the Punjab Information Technology Board (PITB).

Two designated government banks: Zarri Taraqiati Bank and National Bank of Pakistan, and three PFIs: Akhuwat, Tameer Bank and National Rural Support Programme access the applicants’ data through PITB’s website for selection of applicants.

They then contact the applicants telephonically and initiate loan processing through internal verifications. In case the loan is approved, the relevant documents are uploaded on the web-portal and officials of the concerned tehsil centre get access to documents.

The centres then upload the copy of land documents to the PITB’s website for banks’ utilisation. The entire system is electronic, which PLRA claims, invites the applicant once for the registration.

A PLRA official says three PFIs have been tasked to identify and register landless cultivators after the provincial agriculture department and PLRA found it difficult to locate such landless applicants in large numbers.

He says often problems like non-cooperation from landowners to award possession certificates or IDs to their tenants creates problems in submission of computerised ownership and land transfer documents and CNICs.

He says three PFIs are disbursing loans to tenants and landowners having up to 2.5 acres of land while ZTBL and NBP are disbursing loans to farmers owning upto 2.5-5 acres of land.

The official further says NRSP has disbursed the maximum number of loans while Akhuwat has struck agreement with the provincial government only two weeks ago.

“Despite getting registered with PLRA two months ago, I am still awaiting for the first tranche of Rs25,000 rabi loan” says Tahir Khan of Lodhran district, who has already sown wheat, the major crop of rabi season.

Khan, who is awaiting reply of ZTBL branch for getting loan, adds he has not heard of any tenant in his constituency who has secured a loan.

The spokesperson for PAD in a reply to Dawn confirms the applicants irrespective of their status will have to repay the loan either with or without mark up. And tenants/sharecroppers are required to provide written consent of land owner or agreement.

Published in Dawn, Business & Finance weekly, February 6th, 2017