ISLAMABAD, Jan 23: The government needs to make available additional Rs303 billion agricultural loans to plug in the existing demand and supply gap and improve productivity.

The country’s current credit requirement for agriculture sector is around Rs553 billion, while the available farm credit is Rs250 billion, leaving much to be desired.

The farm credit issue was highlighted by President Zarai Taraqiati Bank Ltd (ZTBL) Zaka Ashraf here on Saturday while talking to Brandely Buck, head of the delegation of M/s Land O’Lake International Development, a US based company that works for international development that capitalises on farm-to-market-agribusiness.

Mr Zaka said there were around 6.6 million farms in Pakistan of which 94 per cent were small farms and their contribution to the country’s Gross Domestic Product (GDP) was 21 per cent. The demand for agriculture credit had surged sharply and there was a need to increase disbursement of loans to farmers.

He informed the delegation that agriculture development and uplift of the small farmers was being pursued by the bank by financing the entire value added chain of agriculture.

He said the bank had taken a paradigm shift towards provision of agriculture technology and supportive programmes to maximise the per acre yield productivity through the proper utilisation of loans.

Mr Brandely gave a presentation on developing global awareness initiatives while focusing on dairy and agriculture sectors. He said his company wanted to share their experiences with Pakistan for agribusiness development and effective food and agriculture solutions.

He said the company wanted to work with Pakistan on the food security challenges and technical competence to boost productivity and employment in agriculture sector.

Our staff reporter adds from Karachi: Credit offtake by the agriculture sector rose by 10.16 per cent in first half of the current fiscal (July-Dec) but remained much below than the target set for the period.

The State Bank of Pakistan on Friday reported that credit to agriculture sector reached Rs99.448 billion compared to Rs90.277 billion during the same period last year.

Overall credit disbursement by five major commercial banks including Allied Bank Limited (ABL), Habib Bank Limited (HBL), MCB Bank Limited, National Bank of Pakistan (NBP) and United Bank Limited (UBL) stood at Rs48.635 billion during the six months compared to Rs44.914 billion during the same period of the last fiscal year, depicting an increase of Rs3.721 billion.

Zarai Taraqiati Bank Limited (ZTBL), the largest specialised bank, disbursed Rs27.744 billion in six months compared to Rs23.871 billion during the same period of the last fiscal year, while disbursement by Punjab Provincial Co-operative Bank Limited (PPCBL) stood at Rs2.179 billion.

Besides, 14 domestic private banks (DPBs) also loaned a combined Rs20.889 billion in the first half of the current fiscal, up 9.42 per cent when compared with Rs19.090 billion disbursed in the corresponding period of last year.

The State Bank has set an indicative credit disbursement target of Rs250 billion for the agriculture sector for 2008-09 which is higher by Rs50 billion or 25 per cent than last fiscal year’s target of Rs200 billion.

It was Rs38 billion or 18 per cent higher than the actual disbursement of Rs212 billion in the fiscal 2007-8.