Farmers need easy access to funds for increasing productivity.

• Author: Kazmi, Shabbir

Byline: Shabbir Kazmi

Pakistan enjoys enormous cultivable area, the largest man-made irrigation system, excellent and high yielding varieties and hardworking farmers. However, yields of different crops have remained below global average. Farmers' income is further reduced due to huge postharvest losses. Production of various crops can be doubled without increasing area under cultivation. This target can be achieved by applying balanced nutrients, introducing farm mechanization, improving knowledge and induction of modern farming technologies, increasing lending to farmers

It is encouraging to note that banks disbursed Rs1,174 billion or 94% against the ambitious target of Rs1,250 billion set by Agricultural Credit Advisory Committee for 2018-19. This disbursement is a sizable performance, keeping in view demand and supply side challenges. The last year's disbursement was 21% higher than the disbursements of Rs972.6 billion a year ago. The outstanding portfolio increased to Rs562.4 billion by end June, 2019, registering a growth of 20% as compared to Rs469.4 billion. Similarly, the agricultural credit outreach has increased to 4.01 million farmers or 91% against target of 4.42 million farmers at end June 2019, recording growth of 8% from 3.72 million farmers at end June 2018.

To achieve these numbers, State Bank of Pakistan adopted a multifaceted strategy and made concerted efforts for pursuing a massive agricultural credit target which included; sensitizing banks to adopt lending to farmers as a viable business, exploring new avenues of financing, value-chain financing, mobilizing e-credit, warehousing receipt financing, implementation of crop/livestock insurance and credit guarantee schemes for the farmers etc. The achievement could be made due to the integrated efforts of federal/provincial governments, SBP, financial institutions and other stakeholders.

Further, the efforts included rigorous follow up with the top management of banks and agriculture credit heads and conducting regular follow-up meetings with regional management were instrumental for target monitoring. Conducting regular farmers' awareness and financial literacy programs across the country, initiation of one window operation in Khyber Pakhtunkhwa (KPK) and holding job fairs for agriculture graduates in underserved provinces were also helpful. Moreover, the support of SBP's BSC field offices in monitoring the district/regional targets was also supportive.

The recently...