Islamabad, 28-29 April 2015: The State Bank of Pakistan (SBP) in collaboration with the Food and Agriculture Organization (FAO) of the United Nations is conducting a two days International Conference on the “Innovative Agricultural Financing’ from 28 to 29 April 2015 in Islamabad. The Conference aims to discuss innovative strategies and solutions to increase outreach of agriculture credit to small-scale farmers, and also highlight opportunities at the high-end of the market focusing corporate farming and agriculture-food enterprise. During the course of two days, the conference will highlight global experiences on agricultural financing through plenary discussions, breakout sessions, and “plug-and-play” sessions. Major topics include policy framework, value chains financing, warehouse receipts financing, risk management, and use of technologies.

A large number of representatives from the Government of Pakistan, the State Bank of Pakistan, senior policy makers, leading commercial Banks of Pakistan, donor agencies, private sector leaders, development partners, civil society, academia and FAO participated in the conference. Fifteen international experts from DFID, Asia-Pacific Rural and Agricultural Credit Association (APRACA), Frankfurt School of Finance & Management, Policies, Markets and ICTs-CTA, FAO Rome and FAO Thailand are also participating as key speakers or panelists.

The inaugural session was chaired by the Honourable Senator Mohammad Ishaq Dar, Federal Minister, Revenue, Statistics, Economic Affairs and Privatization and was co-chaired by H.E. Mr. Sikandar Hayat Khan Bosan, Federal Minister for National Food Security and Research. Mr. Patrick T. Evans, FAO Representative to Pakistan; Mr. Ashraf Mahmood Wathra, Governor, State Bank of Pakistan; Mr. Saeed Ahmad, Deputy Governor, the State Bank of Pakistan; Mr. Ashraf Mahmood Wathra, Governor SBP and Mr. Chamnong Siriwongyotha, General Secretary, APRACA spoke on the occasion.

While addressing the audience, the Chief Guest Senator Ishaq Dar highlighted that the Government places high priority to the development of country’s agriculture sector due to its strong linkages with other sectors of economy, and its high significance in ensuring food security, reducing poverty, and generating widespread prosperity. The government is taking measures to increase agriculture production and infrastructure, ensure food security, and promote pro-poor agricultural growth. These measures will help to improve production yields, introduce modern farm-mechanization, increase better market access, and integrate farming with diverse markets through value chains to ensure that the benefits are passed down to farmers. In his concluding remarks, Mr. Ishaq appreciated FAO collaboration with SBP for promoting agricultural value chain financing in Pakistan.

Speaking on the occasion, the Honourable Minister for National Food Security and Research said that “compared to the developed and many developing countries with similar resource base, the productivity of Pakistan’s agriculture sector today is low. With current levels of productivity, it is becoming increasingly difficult for the sector to feed the country’s population as well as to compete in the world markets. Lack of resources, poor investment in inputs due to the lack of credit availability, old management techniques and the absence of modern technology are some of the key issues that need to be addressed in order to increase the productivity and growth of the sector”. However, “the Government is fully committed to tap every opportunity to ensure full support to the agriculture sector, and especially to the small-scale farmers in the country”, said the Minister. The minister also said that the government will consider the recommendations from this conference for inclusion in the forthcoming finance bill.

In his address, Mr. Patrick T. Evans, FAO Representative to Pakistan said that the “Agriculture financing in Pakistan is limited with low percentage of finance going to the sector in relation to the needs and to its contribution to the country’s gross domestic product (GDP). Many arming households are excluded from adequate financing due to the bankers’ reliance on of-land titles for securing loans. Hence, it is vital to introduce agriculture value chain finance and other innovations into the banking sector and in building technical capacity to scale up its use and implement across the country”. Mr. Patrick further said that “there is an immense need to introduce new products of value chain finance and educate farmers to bring economies of scale that is reducing their costs and eliminating role of middle man. The value chains can attract businesses such as input suppliers, machinery hire services and banking sector expansion. Its best part is development of rural areas by raising farmer income level”.

While addressing the audience, Governor State Bank of Pakistan, Mr. Ashraf Mahmood Wathra highlighted SBP’s policy framework for enhancing the flow of financial services to rural agriculture sector. He said that changing times are giving birth to newer financial-inclusion challenges which demand a divorce from conventional and traditional approaches and a marriage with newer, better and more innovative ways of doing business. He shared SBP’s vision and strategy for creating an enabling environment for enhancing agriculture credit and highlighted that the industry has so far performed well against ambitious growth benchmarks. Mr. Wathra also said that SBP is striving to introduce internationally renowned practices such as Value Chain Financing and Warehouse Receipt Financing in the country. Mr. Wathra hoped that this conference will provide an impetus to Government of Pakistan and SBP’s efforts for nurturing an eco-system which is conducive for the growth and development of agriculture financing.

Experts also discussed the three main factors that contribute to agricultural growth i.e. increased use of agricultural inputs, technological change and technical efficiency. Increased use and a better mix of inputs also require funds at the disposal of farmers. These funds could come either from farmers’ own savings or through borrowings. In less developed countries like Pakistan where savings are negligible especially among the small farmers, agricultural credit appears to be an essential input along with modern technology for higher productivity.

The credit is important for development. It helps farmers and entrepreneurs to undertake new investments or adopt new technologies. It helps smooth consumption by providing working capital and reduces poverty in the process.

Additional features of the conference include stalls to by different agri-allied stakeholders including financial institutions, development finance institutions, and agri-technology promoters. [END]

For further information and Media Contact:

Mahira Afzal, Communication Officer,
FAO Representation Office, Islamabad.
+92(0)346-8544197;
[email protected]