Prime Minister Shehbaz Sharif on Monday announced a special package of Rs1,800 billion to promote the agriculture sector, including the provision of free seeds and inexpensive loans and bringing down the prices of fertilisers and electricity for tubewells.

Addressing a press conference in Islamabad, the premier said that Pakistan's economic progress was dependent on the agriculture sector and the new financial package reflected an increase of Rs400bn as compared to the last year.

Finance Minister Ishaq Dar would ensure the delivery of loans to farmers, he said, adding that Rs10.6bn were allocated for small farmers across the country while Rs8bn would be given to small farmers in flood-affected areas.

In the rural areas, unemployed youth in the agriculture sector would be given loans amounting to a total of Rs50bn, while Rs6.5bn would be given for a subsidy to waive off the markup on these loans.

PM Shehbaz said the prices of di-ammonium phosphate (DAP) would be reduced by Rs2,500 per bag, resulting in a benefit of Rs58bn to farmers. The price of a DAP bag would come down to Rs 11,250.

He said the prices of DAP were brought down after "tough negotiations" with the fertiliser sector, adding that DAP had an "important role" in increasing the per-acre yield of crops.

The prime minister said that 1.2 million bags of certified seeds worth Rs13.2bn would be distributed among the farmers and the federal and provincial governments would share the funds required for it.

Landless farmers in flood-hit areas would be given Rs5bn, he revealed, adding that small and medium enterprises working in the agriculture sector would also be given Rs10bn loans for modernisation schemes.

The prime minister said that second-hand five-year-old tractors would be imported with a relaxation of 50 per cent in duties and the government would also encourage the entry of new tractor manufacturers by decreasing duty on completely knocked-down kits from 35 per cent to 15pc.

PM Shehbaz further stated that 0.5m tonnes of urea would be imported at a reduced price, adding that 0.2m tonnes of urea had already been imported and the government would give an Rs30bn subsidy to give fertiliser to farmers at a lower cost.

He also said the government would import 2.6m tonnes of wheat. ”One million tonnes was already imported while 1.6m tonnes of wheat will be imported soon," Shehbaz added.

The prime minister said one million tubewells in the country ran on electricity and under the new package, the government would provide interest-free loans for 300,000 tubewells for their solarisation so that farmers would get free of cost electricity.

He added that despite all the difficulties, the government had decided to fix the electricity cost at Rs 13 per unit for tubewells and it would also pay a Rs43bn subsidy to help farmers in paying loans for the solarisation process.

PM Shehbaz noted that the new package would help in the rehabilitation of farmers, particularly those whose standing crops, including rice, sugarcane, wheat and dates, on 4m acres were destroyed by the floods.

He said financial assistance of Rs88bn was already given to flood affectees, adding that Rs70bn was given through the Benazir Income Support Programme while the remaining amount was given for material help like food, tents and blankets through the National Disaster Management Authority.