LAHORE: The Punjab government on Thursday spared over Rs64 billion for agriculture sector, which included Rs30bn for subsidy, Rs9bn for solarisation of tube-wells and Rs75bn interest-free loans to farmers.

Announcing the provincial budget, the provincial finance minister said that the government allocated Rs64.60 billion for the sector, which was 126 percent more than the last year’s allocation.

The agriculture sector, he said, has been subjected to “rumors and misinformation” over the last few months. That is why, he said, the government has decided to distribute Rs75bn among 500,000 farmers in the province through the “Kissan Card Scheme,” which would mitigate impact of inflation on their cost of production.

The minister said over 7,000 tube-wells in the province would be shifted to solar energy to further help the farmers. It would also save the amount to be spent on import of eight million liters of diesel and 8.3 million kilowatt hours of electricity. This, he said, would be in addition to saving environment, which the diesel-run tube-wells were polluting.

The Punjab has also been running a four-year (2021-22 to 2025-25) Agriculture Transformation Plan and would spend Rs13bn on it this year, out of which Rs9bn would be spent on promotion of mechanisation of agriculture for better crops. Besides, he said, quality seed production would cost it Rs1.9bn and privatisation of extension services another Rs1.4b.

Critics, however, believe that two chief ministerial initiatives would be counterproductive. They say that the massive solar initiative (shifting of tube-wells and homes up to 100 units on solar energy) will further reduce dependence on national grid and increase burden of capacity payments on the sector, worsening the circular debt crisis.

Similarly, they say, the Green Tractors, for which a massive amount of Rs30bn has been allocated, will also be counterproductive, arguing that the government and the industry are already in courts over payments of the last such scheme.

Though the details of the current tractor scheme have not been made public, the industry fears it may end up facing old issues. The industry thinks that regular customers stop, or at least delay, purchase when they apply for subsidised agricultural implements, affecting the market.

Published in Dawn, June 14th, 2024