AGRICULTURE is the backbone of Pakistan’s economy and a considerable component of our exports is dependent upon it. However, the farmers are still poor, neglected and deprived. Due to uncertainties of agriculture, many of them are debt-ridden. In rural areas, farmers do not have access to easy and feasible farm credit. Most of the commercial banks avoid agriculture lending due to unstable production and market conditions.

The Zarai Taraqiati Bank Limited (ZTBL), the only specialised agriculture financial institution in the country, is primarily focussed on recovery alone. Over the years, its disbursement of agricultural loans has steadily declined. As a result, the farmers are left with no option, but to approach the informal moneylenders who charge exorbitant interest rates — about 60 per cent per annum, which means that a farmer is charged Rs60,000 mark-up against each loan worth Rs100,000. Such interest rates break the back of the poor farmers who are already struggling to meet the input cost of crops.

Also, the ZTBL, whose only purpose of existence is to promote development of agriculture, rarely extends development loans to farmers for buying agricultural machinery, such as tractors, threshers, etc. In Balochistan, for example, only 13pc of the development loan has so far been extended to the farmers by the ZTBL.

Farm mechanisation will modernise agriculture and that in turn will lead to increase in crop yield and help fight hunger and food insecurity in the country.

Financial institutions, especially the ZTBL, should extend more credit to the farmers across the country, especially Balochistan’s, in order to secure the wellbeing of the farmers and the country.

Saad Khosa
Quetta

Published in Dawn, May 31st, 2022