National Bank of Pakistan (NBP) President S. Ali Raza said on Saturday the NBP, having a competitive edge in the sector, was actively working on developing new products for the agriculture sector.
"It is good for us, good for the farmer, and good for the country that more credit facilities be offered to the farming community that may not necessarily be used for farm inputs", he remarked during his lecture in 'Business Breakfast' series of the Institute of Bankers of Pakistan here.
The actual demand of the agriculture sector is around Rs 350 billion to Rs 375 billion per annum, whereas this sector used to be fed merely Rs 45 billion to 50 billion, leaving it on the mercy of the middle men to bridge the gap, he said.
Speaking on the silent revolution in farm lending, Ali Raza said a couple of years ago, the State Bank of Pakistan used to fix the limits to be met by the commercial banks in lending to the agricultural sector, but only Zarai Traqiati Bank was lending to it. However, now the situation has changed, and the sector is being considered a feasible commercial sense, he added.
Admitting the higher interest rate against lending to the agriculture sector, he said there should not be any interference and let the market forces be play their role in bringing them down, adding now only the NBP is in the field, and there would be several other banks offering finances to the growers in a year or two, that will forced all of them to compete and bring the lending cost down.
Ali Raza said it's irony that the General Agreement on Tariff and Trade (Gatt) and World Trade Organisation (WTO) were trying to enforce free trade, and those who were the forerunner and carrying the flags of the free trade, were paying huge subsidies and protections to their agriculture sector at the home front.
He said the developing countries have started feeling that their agricultural products were being discriminated against by forcing them to withdraw subsidies and concessions, which were available to the growers of developed countries, adding It is a good omen that they have started joining each other to voice their concern and ultimately the developed world would be forced to withdraw these subsidies in the coming years.
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