ISLAMABAD, June 13: The government has withdrawn with immediate effect the power of Zarai Taraqiati Bank Limited (ZTBL) to recover its dues as arrears of land, thus saving the farmers from going through the humiliation of arrest and imprisonment.

The measure, announced by Finance Minister Shaukat Aziz in his budget speech in the National Assembly on Saturday, would hopefully remove the disincentive for the small farmers to avail themselves of the credit.

Besides, the ZTBL will reduce its mark-up rate from 14 per cent to 9 per cent. It will be still lower - 8 per cent - for those repaying their loans in time. The development of the agriculture sector, the minister said, was central to the well-being of the country and, as such, the government had included it among the four sectors declared as the drivers of growth.

The allocation to agriculture sector under the PSDP 2004-05 has been increased to Rs7,289 million as against Rs2,355 million the previous year. Accordingly, he declared numerous measures as part of the regular budget to augment and optimize the water resources and for development of agriculture during the next fiscal year.

Consistent with the government's policy of giving highest attention to meet the challenges in water sector, he said, a large number of water sector projects had been initiated by the government.