Farm loans up to Rs 0.5 million: government decides to launch 'Benazir Zarai Card'

The government has decided to launch 'Benazir Zarai Card' for loans up to Rs 0.5 million, to be issued by banks involved in agri lending to farmers. According to the working paper available with Business Recorder to be tabled before Federal Committee on Agriculture (FCA) scheduled to meet on November 1, 2010 the government will launch 'Benazir Zarai Card' scheme for the benefit of small farmers.
"The objective of introduction of 'Benazir Zarai Card' is to improve farmers' access, especially small farmers, to agricultural credit facility and would enable them to purchase quality farm inputs such as seed, fertiliser, pesticides, etc, without visiting bank branches," the working paper said. Banks involved in agri lending may issue 'Benazir Zarai Card' to farmers against their revolving credit limits in parallel to the existing cheque facility.
The card will be issued for three years under this scheme enabling small farmers to get loans up to Rs 500,000. The scheme will be implemented on a pilot basis in one district each of the four provinces and will be extended to other parts of the country.
To protect the interests of the farming community against natural calamities, to improve the loan recovery mechanism and to reduce the risk on the part of banks a "Crop Loan Insurance Scheme" was also introduced during the Rabi Season 2008-09. Under this scheme, the government picked up premium up to 2 percent for farmers' subsistence.
In the flood affected areas, agri loans of farmers for five major crops viz wheat, cotton, maize, rice and sugarcane registered under this scheme would be paid back by the insurance companies. The State Bank of Pakistan task force is working to devise an insurance policy to provide insurance cover to the entire agriculture sector.
Under the Benazir Tractor Scheme, the government is providing tractors to small farmer with a subsidy of Rs 200,000 per tractor. The government has allocated a fund of Rs 4.0 billion for this purpose. Under the first phase of this scheme, 10,000 tractors have been provided to the farmers all over the country during the financial year 2009-10.