Printer Friendly

AGRICULTURAL CREDIT DISBURSEMENT.

Byline: S.KAMAL HAYDER KAZMI

Research Analyst, PAGE

The Government of Pakistan is cognizant of the vitality of agriculture credit and making all attempts for development of agriculture finance in Pakistan. Resultantly, the flow of credit to agriculture sector is explaining development and all stages have been taken to the credit availability to the farming community at affordable prices.

A well organized network of lending firms is operative to meet the financial needs of farmers chiefly in the rural regions/areas. Presently 27 commercial, Islamic and microfinance banks with approximately 3,900 agriculture designated branches are helping farmers by extending agriculture credit throughout Pakistan. These include one Islamic bank, 5 microfinance banks, 2 specialized banks and19 commercial banks.

These banks give development and production loans to farming community for agricultural functions including sericulture, fisheries, poultry, livestock, crops production, apiculture, nurseries, forestry, orchards etc.

Recently, the banks have disbursed Rs118 billion in agricultural credit to farmers during (July-November) FY2013-14, meeting 33 percent of the target fixed by the State Bank of Pakistan (SBP) for FY2013-14. SBP has provisionally set the agricultural credit disbursement target at Rs360 billion. The amount lent by banks in 5-month is 11 percent more than Rs106.6 billion disbursed during the corresponding period of last year. Outstanding portfolio of agricultural loans has risen by Rs37.8 billion to Rs267.4 billion by the close of November against the same period previous year. Five big banks collectively provided loans of Rs70.6 billion, or 39 percent of their yearly target, higher by 12 percent from Rs63.2 billion given previous year. Although, MCB Bank has achieved 48 percent of its yearly goal while National Bank of Pakistan (NBP) 42 percent, Habib Bank Limited (HBL) 41 percent, United Bank Limited (UBL) 31 percent and Allied Bank Limited (ABL) 27 percent of their targets respectively.

Amongst specialized banks, Zarai Taraqiati Bank Limited (ZTBL) could disburse only Rs13.6 billion or 20 percent of its target of Rs69.5 billion while Punjab Provincial Cooperative Bank Ltd (PPCBL) achieved its target of 19.6 percent by disbursing Rs1.76 billion during the period under review. Fourteen local private banks as a group achieved 31 percent of their target, however, Sindh Bank 85 percent, Bank of Khyber 59 percent, Bank Al Habib 45 percent, Silkbank 41 percent, Summit Bank 41 percent and NIB Bank 38 percent of their annual targets respectively. While, Soneri Bank 31 percent, Bank Alfalah 28 percent, Faysal Bank 24 percent, Bank of Punjab 19 percent and Askari Bank 18.6 percent; achieved their targets respectively.

Furthermore, 7 microfinance banks as a group disbursed Rs6.6 billion to farmers, meeting 34 percent of their yearly target of Rs19.6 billion. Three Islamic banks together disbursed Rs0.25 billion or 47 percent of their target of Rs0.5 billion under Islamic modes of financing to agricultural borrowers.

UREA IMPORTS and PRICES

Presently, the Economic Co-ordination Committee (ECC) of the cabinet accepted 0.5 million tonnes of urea for Rabi FY2013-14 of which 0.5 million tonnes have reached of which 0.1 million tonnes arrived. Ministry of Petroleum and Natural Resources has announced that all plants on SSGCL and SNGPL are not being supplying gas, however, 1 plant of Engro is being supplying 60 mmcfd gas on provisional basis. Total local production of urea stood at 499,400 tonnes during FY2010-11, 468,600 tonnes in FY2011-12 and 421,600 tonnes during FY2012-13. The government imported 635,000 tonnes of urea during FY2010-11, 1,647,000 tonnes in FY2012-13 and 761,000 tonnes during FY2012-13. Offtake stood at 5,765,000 tonnes in FY2010-11, 5,992,000 tonnes in FY2011-12 and 5,191,000 tonnes in FY2012-13. Government enlarged subsidy of Rs9.2 million in FY2010-11, Rs50.5 million in FY2011-12 and Rs12.7 million in FY2012-13.

The current stock of imported urea with TCP as well as 100,000 tons that reached at Karachi port will be distributed through National Fertilizer Marketing Limited (NFML) as per existing deals. However, it is unclear whether the urea to be imported for Kharif 2014 will be distributed by the corruption-tainted NFML or through the local urea manufacturers. On the other hand, the fertilizer firms and government reached an agreement to decline the price of urea from Rs1900/ bag to 1786/ bag immediately. It was also planned that fertilizer firms shall print the prices of urea on the bags with effect from March 1, 2014. It would be pertinent to cite that the fertilizer firms had raised the prices of urea in January 2014, and ECC had taken notice.

CONCLUSION

No doubt, the government focuses on improving the lot of small farmers who are the backbone of rural economy and also ensures their access to modern agriculture knowledge, inputs and markets. The government has advised that fertilizer firms to protect the interest of farmers.

SUPPLY OF AGRICULTURAL CREDIT BY INSTITUTIONS (Rs. In Billion)

FISCAL YEAR###ZTBL###COMMERCIAL BANKS###PPCBL###DOMESTIC PRIVATE BANKS###MFBS###TOTAL

###RS. BILLION###%CHANGE

2007-08###6.9###94.7###5.9###43.9###0.0###211.6###-

2008-09###75.1###110.7###5.6###41.6###0.0###233.0###10.1

2009-10###79.0###119.6###5.7###43.8###0.0###248.1###6.5

2010-11###65.4###140.3###7.2###50.2###0.0###263.0###6.0

2011-12###66.1###146.3###8.5###60.9###12.1###293.8###11.7

2011-12 P###37.8###107.6###6.0###37.3###8.5###197.4###-

2012-13P

(July -Mar)###38.0###123.7###5.4###51.0###13.0###231.0###17.0
COPYRIGHT 2014 Asianet-Pakistan
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2014 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Pakistan & Gulf Economist
Geographic Code:9PAKI
Date:Feb 2, 2014
Words:936
Previous Article:ECONOMIC GROWTH OF PAKISTAN: FLAWS and MEASURES a[euro]".
Next Article:PACKED MILK IS THE GAME CHANGER OF RURAL ECONOMY.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters