NA Speaker forms task force for farmers financial inclusion

ISLAMABAD, Aug 25 (APP):National Assembly Speaker Asad Qaiser on Tuesday formed a task force to devise a practical strategy for enhancing farmers’ access to affordable production loans to raise agricultural productivity.

He stated that agriculture sector constituted almost 19% of Pakistan’s economy.However, there was wide gap between what agriculture contributed to the national economy and what it got in terms of lending from formal sources. He was presiding a meeting of the National Assembly Special Committee on agricultural products. Governor State Bank of Pakistan virtually attended the meeting as special invitee.  The Speaker stated that access to cheap and affordable production loan was very crucial to enhance small farmers’ productivity and help them break the vicious cycle of abject poverty.

He added that the significantly larger gap in demand and supply of agricultural loans warranted comprehensive and dispassionate analysis. He urged the Governor State Bank of Pakistan to nominate a senior official to the task force comprising members of the National Assembly, President ZTBL, Secretary, Ministry of Finance and Secretary, Ministry of National Food Security and Research. The Governor State Bank of Pakistan welcomed the formation of the task force and assured complete support to the committee on matters of farmers’ financial inclusion and economic development.

He also briefed the members of the committee on various initiatives of the State Bank of Pakistan and answered their questions. The members of the committee highlighted that the lack of cheap loans precluded small farmers from improving their productivity and locked them into a low profitability value chain. It was stressed that the State Bank of Pakistan should play an effective role to nudge the banking sector to increase lending to the agriculture sector. They lamented that though farmers pay premium for insurance at the time of borrowing, however, they were never compensated in the case of natural calamities.  The members also underlined the need for credit guarantee schemes, reducing the transaction cost of borrowing, treatment of CPR as financial instrument, reforms of the ZTBL, and increased allocation for agri-loans.