Setbacks: Finances throw a spanner in the works of Punjab’s farming project

The village organisation will offer farmers convenient loans as per their budget, to acquire farming machinery

Rizwan Asif December 03, 2019

LAHORE: Introduced by the Punjab government with hopes of assisting local farmers, Corporate Farming Project has hit a bump in the road amidst disagreements between the provincial government’s finance and cooperative departments.

The Punjab chairperson of planning and development board, while giving conditional approval of the project, has directed the two departments to put their differences aside and assist the agriculture department to initiate the esteemed project.

The project, valued at Rs 400 million, hopes to establish sale points by forming village level organisations for the sale of farming products and agricultural machinery, across the 137 villages of Rahim Yar Khan, Sargodha and Sialkot. The project will also introduce purchase centres for the procurement of arid production and provide farmers with a revolving fund of Rs 2 million at a nominal markup, to acquire farming equipment as well as provide access to easy loans for cultivating a maximum of 5 acres of land.

‘Smart subsidy’ suggested for small farmers

According to project details issued by the Punjab Agriculture Department to the Planning and Development board, the 137 villages selected from the three cities will be divided into four clusters. The village organisation will be formed in every village in partnership with the cooperatives department and any farmer from the village willing to become a member could do so by submitting a onetime fee of Rs 500 per acre with a limit of 12 acres.

The village organisation, on the request of its members, will be in the position to offer them convenient loans as per their budget to acquire farming machinery required for cultivation during Kharif and Rabi seasons, with an applicable markup of 5%.

Furthermore, the agriculture department with the sponsorship of various companies will set up shops for the sale of fertilizers, seeds and agricultural chemicals at discounted prices in every village. These shops will also be managed by the village organisation and the profit from them will be credited to the bank account of the village council. Moreover, the sales centre will be set up in every village where farmers will be able to sell their crops and the government, as per plan, ensures they get a fair price.

Govt indifferent to locust invasion, claim farmers

On the other hand, the village organisation will receive nominal charges from farmers who bring their produce to the sales centre. Under the pilot project, Rs 297 million will be provided to the village organisation for up to two years for offering loans to the farmers of the 137 villages. After two years, half of the 297 million allocated to the village organizations will be waived, while the remaining half will be refunded in the next five years in the form of an annual installment, allowing village organisation to gradually increase its financial resources.

Although delayed in the face of interdepartmental disagreements, responding to a question the Punjab Agriculture Minister Malik Naman Lingriyal stated that the Punjab Planning and Development Board has directed all other provincial departments to fully cooperate with the agricultural department to make the Corporate Farming Project a success.

Published in The Express Tribune, December 3rd, 2019.

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