The agriculture credit in the last ten years has decreased more than 60 per cent and it is one of the major causes hindering the growth of the agriculture sector. The unequal distribution of credit is also causing a sense of deprivation in Sindh and Khyber Pakhtunkhawah (KPK), which are getting only 7.7 per cent while Punjab is getting more than 90 per cent. Government talked about boosting the agriculture sector but it has been proved as a lip service yet they have done nothing in reality.
The data available with Profit reveals that although there has been an increase in the allocation of agriculture credit but the ratio is far less than total available credit. The governments in these years raised slogan of improving lives of people living in rural area but did nothing for them. The agriculture sector is considered the backbone of Pakistan’s economy and around 60-70 per cent people directly related to this sector but it is unfortunate that this sector gets only 5.1 per cent of total available credit. Though, there has been a little increase in credit for the agriculture sector. For instance in 1999, the agriculture credit was Rs98,503 million and in 2009 it touched Rs157,163 million; thus there has been an increase of Rs58,660 million. The share of agriculture credit in 1999 was 12.83 per cent but this share decreased to 5.1 per cent in 2009.
It is unfortunate that agriculture credit decreased more than 60 per cent. But this increase was just a peanut if compared with total available credit. In 199, total available credit was Rs720,924 million and in 2009 it increased to Rs3,080,346 million thus there has been an increase of Rs 2,359,422 million. The limited availability of credit is hampering technological progress and also productivity. It is also pertinent to mention that out of 6.6 million farming households only two million receive credit. There is great inequality in distribution of credit, as small farmers get very limited credit while landed elites get maximum share. The farmers with subsistence level or economic level landholdings receive far less credit per person compared to the above economic landholders. According to State Bank of Pakistan (SBP), the farmers with subsistence holding get only 0.1 per person credit while with economic holding the credit ration is 0.35 per person and landlords with huge landholdings get 0.91 per person credit. Thus the poor farmers have less opportunity to avail agriculture credit while landlords have more access to the credit.
It is all because of the political influence of big landowners, who use their personal positions for getting their loans approved while the poor farmers often fall victim to the formalities of banks and corporations. There is also unequal disbursement of credit among the provinces. Punjab used to give 70-75 per cent of total food produced in the country while its population is around 65 per cent of the total population but it gets more than 90 per cent credit while Sindh used to get 4.63 per cent, KPK gets 3.14 per cent and Balochistan gets 0.73 per cent of total available credit for agriculture sector.