Agricultural sector: 'availability of cheap credit can accelerate growth'

Pakistan Economy Watch (PEW) on Sunday said availability of cheap credit can accelerate growth of agricultural sector and ensure food security.
Getting finances through informal as well as formal sources is a world-wide phenomenon in the rural areas but many nations are trying to facilitate farmers through cheap credit to improve their standard of living, it said.
However, Pakistan lags behind as farming communities still prefer informal financial sources to formal financial markets to obtain loans that are costly but easily accessible, said Dr Murtaza Mughal, President of the PEW.
Provision of affordable financial resources can facilitate agriculture growth by improving productivity which will promote the overall economic growth by supporting the other critical sectors, he said.
Dr Murtaza said that relationship between finances and development is evident thence farmers cannot be left of the mercy of informal lenders. He further said that government must pay attention to agri-reforms, encourage R&D, design new products for rural population and pay attention to rising input costs to stimulate agricultural growth.
Financial institutions should provide affordable loans to farmers that will automatically create demand for financial services in rural areas opening new window of opportunity, he said.
Government and State Bank should revisit the financial reforms to improve the efficiency of agriculture sector after studying the structure of the economy not forcefully implemented by international financial institutions.
Province of Punjab deserves attention which produces around 70 percent of the wheat, 80 percent of cotton, 50 percent of sugarcane, 40 percent of rice, over 70 percent of the buffaloes and 50 percent of the cattle.
Dr Murtaza Mughal said that enormous growth opportunities exist in this sector; all that is required is a right approach. Otherwise, he warned, people will remain insecure despite 25 percent of cultivable land and one of the finest irrigation systems of the world.