Agricultural survey: Over half of Sukkur farmers don’t have bank accounts

IBA surveys 300 farmers to understand the rural economy.

ISLAMABAD: A survey conducted by the Institute of Business Administration (IBA), Sukkur for the State Bank of Pakistan showed that nearly 52 per cent of farmers in the Sukkur district do not have bank accounts.

Since farming is a major part of the district’s rural economy, an agriculture survey was conducted in an effort to understand its dynamics.

Five farmers were randomly selected from villages in four tehsils of Sukkur district, Sukkur, Rohri, Pannu Aqil and Saleh Pat, and a total of 300 farmers were surveyed. Most of the farmers were subsistence farmers — 31 per cent of them own less than five acres of land. — while about 34 per cent of them own up to 12.5 acres.

Tractors were a popular tool since all the respondents used them to prepare their land. More interestingly, 77 per cent of the farmers did not own tractors and used rented ones. These farmers are thus potential candidates for schemes such as tractor financing from banks, the survey concluded.

However, the survey revealed that around 54 per cent of the respondents preferred taking loans from informal sources such as family, friends or input suppliers and only five per cent went to banks.

In Sukkur district especially, the number of farmers serviced by banks is very low. This means that most of the farmers do not have the choice of seeking loans from banks. But the problem does not just lie with the banks.

Many of the farmers seem to have a negative perception of banks because they offer interest-laced services, something that is prohibited in Islam. About 71.5 per cent said they stay away from bank loans because they don’t want to engage with Riba (interest). Either that or the interest rate is simply too high for them. They also perceive obtaining a loan as a process burdened with delays and problems.

For many others it is just a basic lack of awareness. Almost 90 per cent of the respondents said that they had no information about the different products being offered by banks for the farming community. Other obstacles are related to regulatory issues — more than half of the farmers from the sample did not have adequate collateral required by banks for them to grant loans. Most also lacked a satisfactory title to their property or land.

Other trends

The survey showed that wheat was cultivated by 93 per cent of the farmers. The average cost per acre of wheat production came to Rs10,670.

Rice was another important crop for 58 per cent. Cotton was cultivated by 37 per cent while sugarcane was cultivated by 12 per cent. Nearly 24 per cent of the farmers also grew fruit, including dates, mangoes and bananas. Only 22 per cent of the farmers rear livestock.

Farmer problems

The survey also tried to examine their problems and the biggest concern seemed to be power outages. Around 99 per cent of the farmers also complained about water shortage in the canal system. All of the respondents saw high energy costs coupled with frequent power outages as one of the key problems. The power outages, particularly in the case of crops which continuously need water, substantially increase the production cost as the farmer has to use diesel engines to meeting the water requirement. The energy crisis has reduced the per acre yield of the farmers, which has drastically affected their earnings.

They are also negatively affected by problems in access to credit. These problems can be overcome by improving the traditional system and using modern tools, education and training the farmers about the latest research to improve productivity.

Published in The Express Tribune, December 29^th, 2010.