By Zeeshan Haider
The PML-N government had set 5.5 percent growth target for the last fiscal year but it ended up with 4.7 percent mainly because of the stunted growth in agriculture --the most vital sector of the country’s economy.
The agriculture registered a negative growth of 0.19 percent against the target of 3.9 percent, resulting in the significant decline of 0.8 percent in the overall growth target. This prompted Finance Minister Ishaq Dar to present an agriculture-focused budget for the current fiscal year.
The minister in his budget speech announced a slew of measures to boost the agriculture sector which alone accounts for 21 percent of the GDP and employees over 40 percent of country’s total workforce.
These incentives included reduction of Rs 400 in the price of urea bag, of Rs300 of phosphate bag, subsidy of Rs10 billion for fertilizer, increase in volume of agriculture loans, reduction in interest rate of these loans and cut in electricity charges on tube wells used for irrigation purposes.
These measures were generally hailed by the farmers community but if one looks at the proceedings of the National Assembly last week than one can easily infer that the grievances of the people associated with this vital sector are still largely unaddressed.
Three lawmakers from the ruling party and that too from Punjab – the farming heartland of the country – submitted a call attention notice in the National Assembly, expressing concern over the high markup charged by the Zarai Taraqiati Bank (ZTB) and other commercial banks on agriculture loans.
They complained that markup on agriculture credit is far higher than that on industry loans.
Sheikh Fayyazuddin, one of the movers of the call attention notice, said the ZTB was charging mark up upto 16 percent on agriculture loans which is way higher than that on which they borrow money from the State Bank of Pakistan.
“The banks borrow money from the State Bank at the mark up of 5.75 percent and if one percent spread is included than it should go up to 7 percent but they charge up to 16 percent when they lend money to us,” the MP from Rahim Yar Khan told the Money Matters.
On the other hand, he said, the industrialists were given loans at the rate of six to seven percent mark up. “It is highly unfair and unjust.”
He said the farmers get loans from banks after mortgaging their lands while industrialists don’t have such liabilities and conditions attached to their loans.
“We have never defaulted on our loans because we have pledged our lands against these loans while almost all loan defaulters in the history of Pakistan have been big industrialists and businessmen” he maintained.
“Please give up step motherly treatment to the farming community of Pakistan. The farmers are the backbone of the country as this sector provides respectable livelihood to a vast population of the country.”
Khan was backed in his assertions by other MPs from rural areas and drew big applause from the opposition members when he delivered hard-hitting speech in the National Assembly.
Sheikh Fayyazuddin thanked the government for giving subsidies on fertilizers and said it made good on its promises to provide fertilizers at affordable rates but demanded it to address the other pressing problems of the agriculture sector of the country. “We have no grudge against the government but we want it to save us from this exploitation. If it can’t control private commercial banks than at least it can ask National Bank and Zarai Taraqiati Bank not to rob us,” he Fayyazuddin.
The PML-N government has been considered a business-friendly government as industrialists and businessmen constitute much of its power base in the country and its critics often accuse it of not giving much attention to the other sectors of economy particularly agriculture.
They accuse it of concentrating its attention in big ticket infrastructure projects in the main cities and towns where its main vote bank is based while ignoring the agriculture-based rural areas which provide lifeline to the economy of the country.
Rana Mohammad Afzal, Parliamentary Secretary on Finance, rejected these assertions and said the government is committed to the progress of agriculture as it is committed to any other sector of the economy.
“The development and progress of our industry is also based on agriculture. How can we develop our textile and garment industries if we don’t give attention to the cotton,” he questioned. “These are baseless allegations. They have no substance.”
Afzal disputed some of the data given by the agitating MPs and said the industries are given loans at the mark up of eight to nine percent.
He said since agriculture loans are less in volume – on average 210,000 rupees – so the mark up is a bit high because of high cost of operations of the bank.
Afzal said government is giving due attention to agriculture and referred to the Rs341 billion Kissan package announced by the prime minister and then a number of concession announced by the finance minister in his budget speech.
“I have assured the members that there would be more incentives and concessions for the agriculture sector in the next budget.”
He said the present government inherited ZTBL in a very bad shape and there had been default of Rs80 billion when it took over power. “Now we have revived this ban,” he added.
The government officials say under 18th constitutional amendment the agriculture has become a provincial subject and the federal government has very little role with regard to issues concerning this sector.
However, critics say devolution of powers does not take away the role of the federal minister in coordinating policies among federating units to ensure development and progress in sectors like agriculture, health and education which are relegated to the provinces.
Moreover, they say the problems faced by farmers are far more complex and they could not be resolved just by announcing financial packages and incentives. It needs a well thought out strategy to deal with the problems of agriculture sector.
Non-availability of good quality seeds because of lack of scientific research and dominating role of middlemen which robs farmers of their due benefit from their crops are some of the major issues faced by the farmers.
Rana Mohammad Hayat Khan, MNA and a progressive farmer from Kasur is one of the movers of the call attention notice. While making his budget speech in 2015 in the National Assembly, he had made an interesting observation to achieve economic targets of the government and develop infrastructure of the country.
“You build a motorway with Rs200 billion. If you give this amount in subsidy to the agriculture, I assure that you can build a motorway from the profit you would earn from this investment.”
The writer is a senior journalist based in Islamabad