ISLAMABAD: Prime Minister Shehbaz Sharif on Monday announced a Rs1,800 billion ($8.1 billion) loan package for farmers this year, saying it would help offset widespread destruction caused by unprecedented floods in the South Asian country.
This summer’s flooding, caused by monsoon rains nearly triple the usual ferocity, wiped out huge swaths of crops, leaving already impoverished families struggling to obtain food. Farmers and officials warn that Pakistan now face serious food shortages at a time when the government is strapped for cash and world food prices are high.
Addressing a press conference on Monday, PM Sharif said Pakistan’s economic development depended on its agricultural growth and thus it was important to resolve the issues of farmers through higher loans and subsidies.
“Farmers will be given Rs1,800 billion loans this year, which are Rs400 billion higher than the amount given last year,” the prime minister said. “We will ensure that all of this amount is provided to farmers.”
He said the government had decided to waive off loans taken by small farmers in flood-affected areas, and was allocating more than Rs10 billion ($45 million) for this purpose.
The subsidies, which were part of the Kissan Package, include loans worth Rs50 billion ($226 million) for the youth of rural areas to invest in the agriculture sector, Sharif said. The government would also provide Rs6.4 billion ($28 million) subsidy on the markup of these loans.
After successful negotiations with fertilizer producers, the new price of Di-ammonium Phosphate (DAP) had also been fixed at Rs11,250 per bag, the prime minister said, saying the government had negotiated a subsidy of Rs2,500 per bag with fertilizer producers.
The government has also allowed the import of used tractors in view of the increased prices of new one, the PM said. Subsidy on the duty of a five-year old tractor would be 50 percent, while the subsidy on duty fee of a three-year old tractor would be 36 percent, he added.
