The central bank Wednesday asked the risk-averse banks to provide farmers with financing for the purchase and maintenance of agriculture tools and equipment ensuring the application of modern water-conserving irrigation systems, like drip/trickle and sprinkler systems. The move, the SBP said, is aimed at sensitising the banks and the farming community to explore ways and means for adopting state-of-the-art techniques that ensure optimum usage of renewable water resources that, the central bank warned, were fast depleting in the country.
“Credit availability is vital for any form of technology intervention,” the State Bank of Pakistan (SBP) observed in its “Guidelines for Efficient Water Management Financing”. The central bank observed that lack of investment by banks in agri water management projects was an indication of their “apprehension” regarding the risk of timely repayment, as shortage of water was rendering their clients (farmer borrowers) vulnerable to risks of yield loss. “The adoption of modern water management techniques by the farmers is necessary to ensure optimal water utilization for soil fertility and better yield,” the SBP said. Accoridng to AC&MFD Circular No.2 issued by the regulator Wednesday, the banks may adopt the guidelines in the present form or with some adjustments to suit their organisational and operational needs and market characteristics, subject to compliance with SBP’s regulations for agriculture financing. The bank said individuals and all types of legal entities engaged in crops, horticulture, floriculture and other agriculture production activities or desirous to establish such new projects with sufficient knowledge and relevant experience would be eligible for credits under the new financing scheme.
Finance is a major constraint for adoption of HEIS but the core issue is unjustified high costs of building the systems at farmers site. In this way the called services and supply companies (SSC) who are entrusted with a state function are plundering the public money in form of government subsidy. Farmers like my self are helpless in this regard as their only option is either to pay whatever is demanded by the SSC or live with the conventional surface irrigation system. I myself wanted to install raingun irrigation system on ten acres of desert land but was stunned by the extraordinary estimate prepared by a SSC. I suggest the government must take the task it self instead of handing it to private sector if the objects are ever to be achieved.
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