Credit Impact on Agriculture Production in Pakistan

Abstract

The study was carried out since June, 2020. The major objective was to see the credit impacts on agriculture production in rural area of Pakistan. Secondary data was used and total 32 articles were downloaded from the net and read many times and draw the result. The result indicates that without credit agriculture development in Pakistan is impossible. Therefore the government has established different banks in rural area of Pakistan. Among these the ZTBL, HBL, UBL, Cooperative, Alfalah, Khyber banks, Muslim commercial banks are the well known banks in Pakistan which provide credits to farmers in rural area of Pakistan. The Pakistani farmers are very poor and they have no money for purchasing inputs in the country because of this, the per acre production is very less than the developed countries. In developed countries the government provide multiple loan on easy term to the farmers and they also give subsidy and support price to farmer in the countries and there the marketing system is also developed while these facilities in the developing countries are poor and they sell their products to middle men on very low price and the targeted price they do not achieve, So in developing countries the farmers always poor and they never capable to purchase inputs in proper time for their agriculture activity. The agriculture credit impact on the agriculture production was found positive in Pakistan while in Pakistan the influential farmer get the loan very easily while the poor and small farmer have no access to these facilities in the country. The loan share in Punjab is 85 percent while the remaining part of the country get only 15% loan in the whole amount of agriculture credit. The process of the loan is very complicated and in time the loan is not available to farmer for their inputs purchasing. Some farmers get the loan while the interest rate is very high and the return of the loan is very difficult and sometime sell their land for returning the loan. The bank staff behaved very badly with the farmer in getting the loan. Similarly the loan amount is very less than the requirement while in some area the religious people do not allow the loan from the bank and tell that it is interest which is prohibited in Islam. On the basis of problems the study recommend that to provide huge amount loan to farmer in Pakistan for enhancing agriculture production; Support price should be imposed on agriculture output in the country; Subsidies price should be put on the inputs in the country; Free based education should be provided to farmer children in the country; Free based hospital should be constructed for health services to farmers in the country; Market facilities should be developed for farmer in the country; High quality varieties of all crop should be provided to farmers in the country; All farmers should be exempted from the tax in the country; Bank number should be increased for provision of loan to farmer in the country; Monitoring set up should be developed for the monitoring of farmer where they utilized the given credit. Diesel price should be provides on low rate to farmer in the country; Electricity facilities should be provided on low rate to farmers in the country for enhancing agriculture production. The developed farmer only developed the country very well because they purchase inputs in time for their farming activities. Therefore it is requested to government of Pakistan to provide sufficient credit to farmer in the country for enhancing agriculture production in Pakistan. ZTB should supply credit timely during the sowing season of crop and must be ensured proper utilization of the credit. Also, the technical guidance should be provided by banks through training workshop and program related to get maximum crop productivity in Pakistan. Expansion in livestock sector could help to absorb the unemployed and untrained rural labor at their door steps which could help to mitigate the migration process of untrained rural labor towards cities. The credit investment in livestock sector give 100% more benefit than the crop sector, so give more credit to livestock owner in the study area. The procedure for getting credit should be made simple and flexible so that small farmers may benefit it; Electronic and print media should be used for farmers awareness for the importance of agricultural credit; The government of Pakistan should set up new Village Township Banks (VTBs) in rural areas, which will be a useful financial mechanism to solve the problem of small farmers; The government of Pakistan should introduce new types of credit schemes such as in kind through Khushhali Bank Limited on low interest rates as it will be easy to access small farmers to increase agricultural productivity. Agriculture research and extension system of the country should be developed for accelerating diffusion and adoption of latest agriculture technologies in the country. Good quality seed should be provided to farmer in the country for more production. Modern irrigation system should be developed in the country for enhancing of agriculture production in Pakistan.