Govt mulls writing off farmer loans

Cabinet members recommend ZTBL loan waiver for flood-hit growers

ISLAMABAD:

The government is working on two proposals to provide incentives to farmers, including writing off or rescheduling loans of Zarai Taraqiati Bank Limited (ZTBL), a state-owned specialised bank catering to financing needs of the agriculture sector.

Owing to the enormous losses suffered by farmers in recent floods, their loans payable to ZTBL should either be written off or rescheduled while the interest should be waived, cabinet members recommended to Prime Minister Shehbaz Sharif in a recent meeting.

The cabinet members came up with a set of proposals in a bid to provide relief for the flood-stricken farmers.

Additionally, the growers suffered huge losses in wheat crop season 2024-25 owing to very low prices and many of them were unlikely to plant the staple crop this year. To incentivise them, they said, the support price mechanism must be revived by provinces; otherwise, Pakistan would become a net wheat importer.

However, they cautioned that the support price may not be announced immediately as it would only benefit the hoarders, adding that farmers should be consulted on any proposed initiatives to support agriculture.

Agriculture and climate change are devolved subjects falling within the domain of provinces, therefore, the cabinet members recommended that any agriculture or climate-related programmes must be drawn up with the collaboration of provinces, which should provide major funding.

The federal government had no financial space left to fund the obligations of provinces, the legislators said, and the imposition of proposed emergencies should be coupled with the introduction of a well-thought-out action plan that would lay out strategies to deal with the issues pertaining to climate change and agriculture.

It was emphasised that a two-pronged strategy must be adopted – short-term measures to provide immediate relief to farmers and long-term structural changes to cope with the adverse effects of climate change on agriculture.

It was also proposed that a meeting of the Pakistan Climate Change Council, established under the Pakistan Climate Change Act, 2017 and comprising provincial ministers, should be convened immediately to propose and coordinate effective strategies on agriculture and climate change in consultation with all the relevant stakeholders.

The cabinet members said that rapid and unchecked population growth was not only becoming a debilitating problem, especially in terms of putting a strain on the country's scarce resources, but was also exacerbating the adverse impact of climate change.

A cabinet committee, headed by the minister of planning, development & special initiatives and including all four chief secretaries, among other members, may be constituted to work out details of the initiatives to be taken to tackle agricultural and climate emergencies, they suggested.