State Bank of Pakistan has received input from banks on what
needs to be done to facilitate flood-hit growers across the
country, particularly in the Rabi sowing season. This would
provide a basis for an immediate agricultural revival
package that the central bank may announce shortly.
The Agriculture Finance Committee comprising representatives
from NBP, HBL, Faysal Bank, UBL, Askari Bank and ZTBL has
submitted its report. Now, the newly-appointed SBP Governor
Mr Shahid Kardar is expected to announce a set of
guidelines for concessional agricultural financing in
Bankers say the SBP is devising a concessional agricultural
refinance scheme for banks to ensure availability of
adequate financing to flood-affected farmers at single
–digit interest rates.
Banks will have to extend larger amounts of crop loans at
cheaper rates to reactivate agricultural activity. But
bankers say they will also have to build a mechanism for
heavier disbursement of development loans to enable
flood-hit farmers to buy
agricultural implements and inputs and to repair damaged
Banks provide farm loans to about 1.4 million growers or one
fifth of an estimated seven million potential borrowers.
“Most of small and medium-sized growers have no access to
agricultural loans and they borrow from informal sources,”
head of an agricultural credit of a large local bank.
Farmers estimate cumulative annual demand for crop and
agricultural development loans at Rs2000 billion whereas
banks’ lending remains below Rs300 billion. “Filling in this
gap is a long-term policy issue. Banks should focus now on
demand for agricultural loans created after the floods, said
a central banker. Initial estimate of this additional demand
is Rs250 billion. Final estimate would emerge once the SBP
and the federal and provincial governments come up with
Government officials say they are seeking soft credit lines
from the World Bank and the Asian Development Bank which can
be used for providing agricultural development loans to
The federal ministry of food, agriculture and livestock and
provincial agriculture departments are also working on
agricultural revival plans. And global help is being sought
from donor countries and international financial
institutions to kick-start
Courtesy: The DAWN
farming activities and to develop a long-term strategic
support programme. “We hope to put all things together in a
comprehensive package and announce at least the short-term
part of it very soon,” a senior official of the ministry of
The floods have washed away at least five million acres of
cultivated land and thick layers of silt over farming land
have erased or blurred demarcation lines that separate one
piece of land from the other. Growers say before the
announces any policy package for agricultural revival it
must ensure instant removal of silt so that flood-hit
farmers can start sowing Rabi crops instead of fighting with
each other over the ownership of land.
“This ought to be the first step in agricultural revival
plan,” says chairman of Pakistan Agri Forum Mr Ibrahim
Mughal. In the second step the government should provide
agricultural implements to farmers of flood-hit areas so
that they can start
preparing land for Rabi crop sowings.
“Tens of thousands of agricultural implements including
cultivators have either been washed away or damaged beyond
repair. Provincial agriculture departments can ensure
provision of such implements to farmers. We have plans to
agricultural tools and implements to farmers of flood-hit
areas,” said an official of Sindh agriculture department
without elaborating on it.
The floods have also damaged at least 7000 water courses and
without their immediate repairing irrigation of Rabi crops
of wheat, gram and canola and sunflower would become too
difficult. Officials claim they are employing human and
resources of agriculture and irrigation departments for
repairing water courses besides encouraging cooperative
societies of farmers to accelerate self-help operations.
Growers say, once the flood-hit farming land is demarcated
again, farmers get back agricultural tools and implements
for land preparation and water courses are repaired only
then they would need crop seeds for Rabi sowing. Later on,
also require enough fertiliser.
The government has already announced to provide free of cost
canola and sunflower seeds to farmers of flood-hit areas for
Rabi crop sowing starting next month. The ministry of food,
agriculture and livestock plans to provide free canola seeds
cultivation on 100,000 acres in flood-affected areas.
Sunflower production is expected to be higher this year
because it can now be sown in the rice belt of upper Sindh,
where floods have increased fertility
Sindh Abadgar Board President, Mr Abdul Majeed Nizamani says
that during the current Rabi season sunflower can be sown
over 1.5 million acres in Sindh alone against 400,000 acres
in past years. Additional cultivation of this important
would help reduce edible oil import bills besides boosting
The federal government has set a target of 25 million tonnes
wheat production this year and officials say that plans for
free distribution of wheat and gram seeds are on the cards.
To supplement government efforts in this regard, the Food
and Agriculture Organisation of the UN has also promised to
distribute free of cost seeds for Rabi crops to 200,000
farming families in the first phase. It has indicated to
double the number
of such beneficiaries in the second phase.
The government has also sought support from donor countries
including Australia for free supply of seeds of wheat, gram,
canola and sunflower.
“The government must ensure that seeds for Rabi crops should
be sprayed with medicines before distribution among farmers.
Otherwise, stocks of free seeds could be black-marketed and
wheat and gram seeds may be used even for
consumption as food,” warns Mr Ibrahim Mughal.
Along with supply of free seeds, farmers of flood-affected
areas would need fertiliser at concessional rates. Here
again, growers warn that bags of fertiliser meant for
flood-hit farmers ought to be clearly marked to avoid their
black- marketing and