Editorial
Efficiency dividends from farm lending
The task now is to ensure fair prices to producers
IF there has been a consistent pattern of increase in the disbursement and recovery of farm loan during past three years, last nine months in particular stand out for a spurt in the trend. What is of special import is that a qualitative improvement has also taken place in terms of speed and timeliness with which agri-credit reached the genuine farmers. In effect, it accounted for effective utilisation of loans, a sharp drop in default loan and the concomitant gains in productivity.
Comparative analysis of the relevant figures speaks volumes about the participation of public and private including foreign banking sectors in agri-lending and the dividends accruing from their concerted involvement. Breaking some new ground, the private and foreign banks' loan disbursement figures registered a rise of 22.37 percent in July-March over the level recorded in corresponding period of the previous fiscal. Disbursement by public sector banks including specialised banks rose by 16.82 percent of which Krishi Bank alone accounted for more than half. In terms of money disbursed it was Tk 6,158 crore for public sector banks as against Tk 2,002 crore by the private banks. All this made for 71 percent of the disbursement target in nine months coupled with a fall in default loan from 26 to 23 percent.
Bangladesh bank has played a most pro-active role by monitoring the agri-credit operations through insistence on meeting targets. Its officials set up camps in the villages for the first time to distribute and realise loans afield. This ensured transparency and fairness of loan distribution. Its approach has been commonsensical in registering the loan receivers' cell phone numbers and reminding them of their repayment schedules. Additionally, this served as a counselling device.
There is little doubt that energetic lending operations have contributed to increasing productivity. The prospect for further incremental gains emanates from the distribution of Agriculture Input Assistance Cards (AIAC) among 1.80 crore farmers. Our experience with higher productivity has been accompanied by a degree of apprehension that farmers might not get remunerative prices as indeed they did not get in recent times. Subsidies in right places together with vastly improved storage capacities must be made available to reward the farmers with prices and profits they so richly deserve.
For all latest news, follow The Daily Star's Google News channel. 
Related News
India’s ‘push-in’ strategy violates international law
8 hour(s) ago
Editorial
Why build roads through a reserved forest?
20 June 2026, 13:00 PM
Editorial
An alarming report on children’s exposure to climate risks
19 June 2026, 19:07 PM
Editorial
Why is safe water inaccessible for millions despite rising spending?
19 June 2026, 08:00 AM
Editorial
BB must confront bad loans’ true scale
18 June 2026, 18:38 PM
Editorial
Comments