According to newspaper reports, Zarai Taraqiati Bank and National Bank of Pakistan will launch a loan programme for farmers with holdings of up to 12.5 acres at a reduced rate of 9.9 percent from July 1, 2017. In the federal budget, the government has enhanced the target of agriculture credit by 43 percent up to Rs 1 trillion for the fiscal year 2017-18 from Rs 700 billion last year. Despite being an agriculture economy, no government could ever tried to streamline this vital sector. Industrialists have always been critical of the government for giving to much concessions to agriculture sector, but agriculturists complain they are burdened with unjustified tax regimes and they are given loans on high markup rates. However, enhancement of credit by 43 percent announced in the budget 2017-18 is expected to give a further boost to the sector. The agriculture sector showed bleak performance during fiscal year 2015-16, especially in cotton production. However, it posted a growth of 3.46 percent during the ongoing fiscal year and is the highest in the last five years. This growth has helped the government drag the overall economic growth up to 5.3 percent.
Finance Minister Ishaq Dar has announced fix general sales tax on DAP which will considerably reduce the fertilizer price and a bag of urea will be available at Rs1400. According to the minister, the country is facing 10 percent reduction and losses in agriculture sector due to the use of old machinery. There is a need to use modern implements to get prolific yield but decades old combined harvesters are still being imported and used in the agriculture sector. Earlier, the prime minister had introduced a package of incentives which brought a massive growth in the sector though many of the targets were missed. According to experts, introduction of corporate farming is lesser evil given the current situation. For better yield, the government will have to ensure adequate water supply, credit facility at zero markup and availability of fertilizers to the farmers. The official rigmarole prevents the farmers from benefiting the government schemes as it happened in Sindh where a credit allocation of Rs 36 billion remained unutilized during the outgoing fiscal year.
As the government has slashed general sales tax on di-ammonium phosphate from Rs400 to Rs100 and has removed customs duty and GST on combined harvesters, it is hoped that the performance of the agriculture will improve this fiscal year.
