Transcript Agriculture Credit

Agriculture Credit
What is Credit?
According to Samuelson
“ Credit is the use of someone else’s funds
in exchange for a promise to pay with or
without interest at a later date”
“ Farm Credit or Agriculture Credit is the count
of loan or Credit obtained form any source for the
promotion & development of Agriculture”
Agriculture Credit
Classification of Agriculture Credit
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Short Term Credit:
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Provided for one year, purpose is for purchasing of
fertilizers, pesticides etc.
Medium Term Credit:
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Provided for one to five years, Purpose is purchasing of
spry machines or drainage improvements etc.
Long Term Credit
provided for a period exceeding five years, purpose for
purchasing tractors, harvesting machines & install of tube
wells/ agriculture land etc.
Agriculture Credit
Sources of Agriculture Credit
Non-Institutional or Informal Sources
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Village Money Lenders
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Friends & Relatives
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Landlords
Institutional or Informal Sources
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Zarai Taraqiati Bank Limited ( 1961, only agri credit, low interest)
Commercial Banks ( More formalities, High interest/ ZTBL)
Cooperative Societies ( 1904, in 1990 Coop 60562, advance to mem)
Cooperative Banks ( old form, each province, advance every type)
Taccavi loans (up to 1960s, crop failure, were at low interest rate)
Agriculture Credit
Need of Agriculture Credit
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Agrarian Economy
Agriculture Backwardness
Low income of farmers
Uneconomic Holdings
Storage & Marketing
Debt
Irrigation facility
Farm productivity
Interim difficulties
Modern Technologies
Unproductive Expenditures
Agriculture indebtedness in Pakistan
Natural climates
Civil & Criminal Suits
Unorganized Marketing Conditions
Agriculture Credit
Problems of Agriculture Credit
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Small Units
Damage to crops & Land
Low & Uncertain yields & incomes
Lack of Credit worthiness & Security
Small & large cultivators
Unproductive uses
High Cost
Limited flow of Capital to Small Farmers
Delayed disbursement of Credit
Agriculture Credit
Measures to Solve those Problems
 Agriculture Credit Institutions
(ADFC1952)(ABP1957)(ADBP1961) ( ZTBP)
 Federal Bank for Co-operatives (1976)
 Agriculture Credit Advisory Committee
(1972)
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Special Schemes (1977 extend credit amount)
Recovery of Loan
Finance in kind & supervised
Pass Book System