LAHORE, June 14: Farmers said on Wednesday the paltry allocation of 0.82 per cent for agriculture showed that it was “no more a priority sector” with the Punjab government and the finance minister kept “lying on the floor of the house.”

Reacting to the Punjab budget, they said that the agriculture sector got just over Rs2 billion out of total Rs274 billion fiscal allocations. This was despite the fact that the sector contributed around 24 per cent of the Gross Domestic Product and over 40 per cent employment in the country.

The Punjab finance minister lied on two accounts: mark-up and the size of credit line to farmers, and had done so with impunity, they alleged and added: “This is bad politics and the worst economics. How the farmers, who pay the mark-up and run after loans, can be cheated by political speech of a finance minister.”

“The finance minister had the cheeks to claim that the Punjab government had brought down interest on agriculture loans by five per cent,” says Ibrahim Mughal of the Punjab Agri Forum. He said at present, the Bank of Punjab, where the provincial government could dictate interest rate, was charging up to 15.5 per cent on agri-loans. Dilating on his point of view, he said that the bank was charging 13.5 per cent (Kiber rate+3.5 per cent+ 1 per cent insurance), and it was charging 14.5 per cent on loans for tractors and 15.5 per cent on livestock.

In these circumstances, how could the minister claim otherwise, and that too on the flour of the House, he wondered. If the Punjab government was this helpless in controlling its own bank’s policies, how could it make tall claims about other banks which were either run by the private parties or the federal government, he argued. The House must investigate if it was ignorance on the part of the finance minister or deliberate cheating, he demanded.

Mr Farooq Bajwa of the Farmers Associate Pakistan thinks that in a loan portfolio of Rs130 billion, which the formal sector provides to farmers, the Bank of Punjab only contributes Rs5 billion - a paltry sum of 4 per cent of the total credit line for growers. But, the finance minister had the courage to claim that the provincial government had solved loan problem for most of the farmers. The picture becomes more bleak if put in the context of overall requirement of the farmers as they need over Rs350 billion in loans, he says. If the Punjab contributes 80 per cent of agriculture produce to the country, its loan requirements are over Rs280 billion, he adds. The Bank of Punjab provides Rs5 billion and Cooperative bank even less.

In this scenario, the Punjab government’s claim of providing sufficient loans to farmers was more of political nature, he claimed.

A cursory look at the budgetary allocations clearly shows the official priorities, says Hamid Malhi of the Basmati Growers Association.

He said the entire agriculture sector got around Rs2.2 billion. For agriculture research and extension wing, a sum of Rs1.1 billion had been allocated, while for livestock sector, which made the country world’s third largest milk producer, a meagre sum of Rs600 million had been allocated, he said. Forestry, fisheries and wildlife, all three departments, got just over Rs500 million.

He said if these figures were analysed in the backdrop of huge spending on non-development expenditures, the situation became even lamentable. The government had neither been able to put agriculture back on its feet by directly facilitating it, nor it provided any incentives to the private sector which pumped money into the sector and sustained it, he observed. So, the government had been discouraging almost every stake-holder in the sector directly or indirectly, he said. —Staff Reporter