ISLAMABAD, June 8: The Kissan Package to be unfolded by President Gen Pervez Musharraf on June 10 is expected to envisage a new leasing scheme for agriculture machinery to boost agriculture production for export-led economic growth.
Informed sources told Dawn on Tuesday that a new leasing scheme was being introduced to provide small loans for tractors, harvesters, combined harvesters, bulldozers and threshers on market-based mark up.
These sources said not only the Zarai Tarraqiati Bank Limited (ZTBL), but commercial banks and Development Finance Institutions (DFIs) were also being allowed to start agricultural loans, and the interest rates on these loans would not be higher than normal banking rates.
The State Bank would be introducing relevant rules in this direction to implement the Kissan Package and allow the normal banking system to bring agriculture sector on a par with other industrial and commercial loans.
The loan conditions would be relaxed and further streamlined. A major policy shift would be that an agriculturist would be eligible to get leasing of up to Rs50,000-100,000 on a 12.5 acre land even if a loan from ZTBL has already been obtained on same piece of land, provided 50 per cent of the total loan amount has been repaid by the borrower.
The sources said the government had also planned to make further reduction in the duties and sales tax (where applicable) on tractors, harvesters, combined harvesters, bulldozers and threshers to reduce input costs to make agricultural products competitive in the international market.
The duties and tax rates are also expected to be reduced on fertilizers, chemicals and other input items like diesel, etc., and to introduce a special "Green Diesel" for agriculture sector that would have a special concessional price compared with normal high speed diesel available in the market.
The Kissan Package to be announced by the President at a Kissan conference would also offer a special subsidised electricity rates for agricultural tubewells. The finance ministry has been asked to ensure that most of the incentives for the farming community were given protection in the federal budget since agriculture was the backbone of country's economy.
The ministry on the directive of the President and the Prime Minister would accordingly introduce considerable reduction in the duties and taxes on all farm inputs and agriculture machinery, the sources said.
The sources said the president was of the view that despite the fact that Agriculture was the backbone of the economy and was contributing more than 60 per cent to the national GDP, it should not be at a disadvantageous position when compared with industrial sector.
The president, said these sources, was surprised to know that currently not a single agriculture loan package of ZTBL was available to farmers below single digit mark up, and that was why he decided that the interest rates on agriculture loans should be brought on par with normal commercial loans.