ISLAMABAD: A parliamentary panel has recommended the Federal Board of Revenue (FBR) to provide fiscal incentives to the farmers and amendments in the Banking Companies Ordinance to facilitate payments of loans to the farmers by the banks/microfinance institutions under the new agricultural growth strategy.
Shandana Gulzar Khan, convener of the sub-committee of the Special Committee on Agricultural Products made a presentation on the Agricultural Growth Strategy with a special focus on maintaining the agriculture growth rate.
During the presentation, she elaborated tax incentives for the small farmers under the growth strategy.
Provinces should collectively approach the FBR to seek all kinds of tax exemptions, concessions and other incentives on utility consumption such as electricity for the small and medium size farmers.
She said the committee would go to the FBR to obtain tax-brackets for the small farmers.
Moreover, it is also recommended to the FBR to draft fiscal incentives for the farmers’ organisations.
Shandana recommended that the Banking Companies Ordinance should be amended by the Finance Ministry, the State Bank of Pakistan, and the Law Ministry to ensure speedy payment of loans to the farmers by the microfinance banks.
“Our banks do not offer life cycle financing to the farmers. The role of microfinance institutions needs to be increased under the new agricultural growth strategy,” she informed the committee.
The proposed strategy would address the issue of lack of economic incentives for small hold farmers to invest in high value products and mechanisation.
It would also address the issue of agricultural extension service to the small farmers.
The convener of the sub-committee of the Special Committee on Agricultural Products also focused on the promulgation of an Act to protect the Zarai Taraqiati Bank Limited (ZTBL) management from political influence.
She referred to the ZTBL management which is facing issues in transfer and postings etc from time to time.
There was a need to amend the ZTBL Act to end the political interference in the bank’s affairs, she recommended.
Under the agricultural growth strategy, Shandana recommended that small farmers need access to subsidised digital production/breed nutrition and management loans from banks and microfinance institutions besides life cycle financial services.
The farmers village organisations must have access to the common asset financing for value addition activities.
The presentation of the convener of the sub-committee also focused on the increased rural digital financial inclusion, investment and formalisation for the small farmers.
She referred to Indonesia, where the concept of contract farming was successful.
Contract farming is an intermediate production and marketing system that spreads the production and marketing risks between agribusiness and smallholders.
Copyright Business Recorder, 2021