Editorial
A substantive agriculture credit policy
The task of implementation looks challenging
THE central bank has announced a liberal, multi-targeted and inclusive farm credit policy with a ring of novelty in certain respects. In terms of the objectives and targets set, the new policy leaves practically nothing more to be desired.
The total disbursement of Tk 11,512 crore being aimed at is around 23 percent higher than achieved in the last fiscal. This, coupled with an increase in loan slabs of 5-10 percent to keep above production costs, is in a sync with pro-productivity thrust of the government. Also, the policy is sought to be used as an instrument to trigger monetary flow from cities to rural areas. A tall order at this stage, but if we can take the first modest step in the avowed direction, with the new policy, much will have been achieved.
The pattern of emphases reveals the multi-targeting and inclusive characteristics of the policy. The focus of disbursement will be on undeveloped areas like chars, marsh lands and the coastal belt. We suggest attention be turned to Adivasis.
The lending will reach out to small and contract farmers. To bring the disadvantaged under the loan facility the collateral prerequisites will be waived -- banks may accept certificates from land owners, locally influential persons and even neighbours. But the provision for successful farmers, now worth Taka 200crore, surely needs an increase to yield sufficient dividend.
What sounds particularly positive is the suggestion to banks that they disburse loans in presence of local government representatives, agricultural extension officers, teachers and media persons. This will help ensure transparency with the real farmers standing a better chance to receive loans.
The NGO linkage with specialised financial institutions commends itself as a way of reaching out to many more. It augurs well that some reputable private sector banks are coming forward with modest targets.
Clearly, the policy has introduced a number of new elements so that the task of implementation will be that much more challenging. It calls for a high degree of coordination between agencies which are being given a role.
The implementation of the major features will require close monitoring and supervision of the entire lending operation. There is an 11-member committee to supervise and monitor disbursement of agriculture credits by state sector banks and specialised financial institutions. There appears to be none for the private sector banks, though.
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