Stepping up disbursement of agricultural credit
Monday, 8 October 2007
The flood that affected many parts of the country last month is still not a spent force. The first wave of flooding was repeated in a short period of time by another flood. Flood waters are yet to recede fully from some areas. Farmers who replanted seedlings destroyed during the first round of flood, were too demoralised and made hopeless by the second round of flooding. They had begged, borrowed and resorted to other acts to resume cultivation. But they were simply shattered by the repeated floods. Thus, the farmers are in too great distresses in many places of the country. They feel absolutely hazarded in resuming agricultural activities from a severe shortages of resources to buy seedlings and other farm inputs.
Farmers do generally rely on institutional credits to come to their rescue. The needs for such credits are found to be much greater in the wake of the very devastating flood. The government was not found slow to respond to the situation. The specialised banks, the nationalised commercial banks and even many of the private commercial banks were advised by the central bank to make special efforts to extend greater than the normal amounts of credits to the flood hit farmers. Thus, it is not that funds are not there to be given to farmers at their time of very acutely felt needs. But the problem is with the disbursement. A report in this paper on Sunday focused on the issue of remarkably slow disbursement of agricultural credits when all arrangements exist in paper for the stepped-up distribution of such credits in this calamity ridden year.
What is more regretful is that farmers in most cases are not aware that regulations have been relaxed in view of the special difficulties this year for farmers who had previously received such credits but were not such good performers in repaying them, to be allowed to be given fresh credits. If the farmers had known this, then they would have surely approached the financial institutions for credits without wasting time or worryingly enhancing their indebtedness by borrowing from the non-institutional sources at high rates of interest. Therefore, it is very necessary to let the farmers know extensively that they are being provided with institutional credits this year on easier terms and conditions. Also very needed is a proactive attitude on the part of the disbursing institutions to make harder efforts to disburse the credits adequately among the farmers at the fastest. It was seen in the past that officials at the financial institutions, exploited the farmers by asking for money to act on their applications in time. Thus, typically the recipient of an agro-credit for Taka 2,000 had to part with Taka 200 to satisfy the demand for bribe of corrupt employees of such an organisation. There are reasons to believe that similar corruption will not hazard the disbursement of the special agricultural credit programme this year in view of the changed circumstances. Otherwise the usefulness of agri-credits will be curbed. Therefore, it is also important that side by side with moves to accelerate the disbursement of credits their distribution should be free from any sort of irregularity.
Agriculture sector's recovery in this particularly difficult year is very important for the national economy in the backdrop of its major contribution to it. And this recovery of the agriculture sector will depend substantially on farmers getting credits on easy terms and in time in order to use the same effectively and, thus, to be able to get back on their feet.
Farmers do generally rely on institutional credits to come to their rescue. The needs for such credits are found to be much greater in the wake of the very devastating flood. The government was not found slow to respond to the situation. The specialised banks, the nationalised commercial banks and even many of the private commercial banks were advised by the central bank to make special efforts to extend greater than the normal amounts of credits to the flood hit farmers. Thus, it is not that funds are not there to be given to farmers at their time of very acutely felt needs. But the problem is with the disbursement. A report in this paper on Sunday focused on the issue of remarkably slow disbursement of agricultural credits when all arrangements exist in paper for the stepped-up distribution of such credits in this calamity ridden year.
What is more regretful is that farmers in most cases are not aware that regulations have been relaxed in view of the special difficulties this year for farmers who had previously received such credits but were not such good performers in repaying them, to be allowed to be given fresh credits. If the farmers had known this, then they would have surely approached the financial institutions for credits without wasting time or worryingly enhancing their indebtedness by borrowing from the non-institutional sources at high rates of interest. Therefore, it is very necessary to let the farmers know extensively that they are being provided with institutional credits this year on easier terms and conditions. Also very needed is a proactive attitude on the part of the disbursing institutions to make harder efforts to disburse the credits adequately among the farmers at the fastest. It was seen in the past that officials at the financial institutions, exploited the farmers by asking for money to act on their applications in time. Thus, typically the recipient of an agro-credit for Taka 2,000 had to part with Taka 200 to satisfy the demand for bribe of corrupt employees of such an organisation. There are reasons to believe that similar corruption will not hazard the disbursement of the special agricultural credit programme this year in view of the changed circumstances. Otherwise the usefulness of agri-credits will be curbed. Therefore, it is also important that side by side with moves to accelerate the disbursement of credits their distribution should be free from any sort of irregularity.
Agriculture sector's recovery in this particularly difficult year is very important for the national economy in the backdrop of its major contribution to it. And this recovery of the agriculture sector will depend substantially on farmers getting credits on easy terms and in time in order to use the same effectively and, thus, to be able to get back on their feet.