KARACHI: The output of agriculture sector rebounded, with 6.8 percent growth in the first half of FY24 compared to 1.8 percent in last year, the State of Pakistan’s Economy Report for the first half of FY24 released on Tuesday by the State Bank of Pakistan (SBP) said.
The growth was also broad-based, with major contribution coming from important crops and livestock, the report said. Among the important crops, production of cotton and rice increased considerably, with former leading to a notable increase in ginning activity as well.
Production of sugarcane slightly declined, with losing some area to cotton. Favourable weather conditions alongside greater input availability supported the overall better performance of the crops, it added.
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The reported increase in area under wheat is likely to provide further boost to crop production in FY24. Adequate soil moisture at the time of sowing is also supportive for the upcoming wheat crop. However, concerns about fertilizer affordability due to high prices and its reported hoarding can be an issue. Nonetheless, current situation indicates optimistic outlook for wheat and other Rabi crops.
Agriculture Credit Disbursements: Keeping in view the rising input prices, the target for agriculture credit disbursements was increased by 23.7 percent to Rs2,250 billion in FY24.
In line with that disbursements increased by 31.3 percent in the first half of FY24, achieving about 49.1 percent of the annual target. Most of the loans were disbursed for crop production, followed by livestock/dairy in non-farm sector and poultry, the report said.
There was also significant increase in disbursements for purchase of tractors (farm sector - development). This is also reflected in tractor sales, which surged by 103.3 percent during the first half of FY24, pointing towards increased agricultural activity as well as mechanization in the sector, it added.
SBP’s financing schemes such as Prime Minister’s kissan package, crop loan insurance scheme, livestock insurance scheme for borrowers, and use of electronic warehouse receipt facilitated farmers in meeting their financing needs.
In addition, ‘champion bank model’ accelerated penetration in the underserved regions, through increasing awareness, formulating specialized lending programs, and addressing the challenges faced by local farmers.
In order to enhance awareness regarding various agriculture credit schemes, Agriculture Finance Literacy Programme (AFLP) of SBP conducted a series of five workshops in the first half of FY24, the report said.
Copyright Business Recorder, 2024
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