Karachi: The agricultural credit disbursement by banks surged by 15.29 percent on year-on-year basis to Rs 223.845 billion in the first ten months (July-April) of the current fiscal year (2011-12), showing the penetration of banking system in the rural economy and its positive impacts on the bumper foods and cash crops in the country.
In absolute terms, disbursement of credit to the agriculture sector increased by over Rs 29.688 billion in July-April, 2012 when compared with total disbursement of Rs 194.157 billion in the same period of the last fiscal year.
Overall credit disbursement by five major commercial banks including Allied Bank Limited, Habib Bank Limited, MCB Bank Limited, National Bank of Pakistan and United Bank Limited stood at Rs 120.415 billion in July‐April, 2012 compared with Rs 107.720 billion disbursement in July-April, 2011 depicting an increase of Rs 12.695 billion or 11.79 percent.
Zarai Taraqiati Bank Limited, the largest specialized bank, disbursed a total of Rs 43.906 billion in July- April, 2012, up by 0.51 percent when compared with Rs 43.681 billion disbursement in the same period of the last fiscal year. Punjab Provincial Co-operative Bank Limited disbursed Rs 6.352 billion in July- April, 2012 up 39.81 percent when compared with Rs 4.543 billion disbursement in the same period of the last fiscal year.
Fourteen domestic private banks also loaned a combined amount of Rs 44.143 billion in July- April, 2012 up by 15.52 percent compared with Rs 38.213 billion disbursement in the same period of the last fiscal year.
Five Microfinance banks including Khushhali Bank Ltd., NRSP Microfinance Bank Ltd., The First Microfinance Bank Ltd., Pak Oman Microfinance Bank Ltd. and Tameer Microfinance Bank Ltd. disbursed a total of Rs 9.030 billion in July-April, 2012 period. It may be pointed out that the State Bank of Pakistan for the first time has given an indicative target of Rs 12.20 billion to Microfinance banks for disbursement of credit to agriculture sector during the current fiscal year.
The State Bank has set an indicative agricultural credit disbursement target of Rs 285 billion for the current fiscal year.
The country’s agriculture sector has seen record bumper production of wheat, cotton, sugarcane and rice, which are in surplus of the domestic demand and could have earned foreign exchange through exports but it went in vain because of dampening demand of all these food items in the international market.
The cotton yarn prices dropped by more than 50 percent since it reached in March 2011. Its prices are hovering around $1 per lbs, which was almost double in the previous year.
The cotton production has crossed 14 million bales but its lower demand and sliding cost in international markets could not generate positive impacts, however hopes of its recovery pinned again after February was seen sharp growth in export receipt.
Despite the country was hit badly by floods and torrential rains, the production of crops were witnessed overwhelming growth in the yields.
The production of wheat from all provinces is estimated to reach 25 million metric ton by end June 2012. The sugarcane crop was also recorded bumper to be yielded more than 57.6 million, which is annual target, though it is expected to cross 65 million tons level.
Similarly, the rice production was seen sharp increase in growth. It is estimated to be yielded up to 7.2 million ton as against 4.8 million production registered last year.
The bumper crop of cotton, wheat, rice and sugarcane should be capitalized to get exports earnings particularly in new markets otherwise, it should be stocked in a way that will help country to produce value-added products.
The economic managers and traders of the country may put together strong efforts to recover exports particularly through commodities trade that is required to bridge widening trade deficit and deteriorated current account deficit.
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