The central bank of Bangladesh has lifted its farm credit disbursement target by 3.29 percent to 145. 95 billion taka (1.87 billion U.S. dollars) for the current fiscal year 2013-14 to encourage sharecroppers to augment domestic food production.
The Bangladesh Bank (BB) Governor Atiur Rahman made the announcement at a press briefing here in Dhaka Tuesday. He said higher agro-credit disbursement target will also help the country to reach the desired 7.2 percent GDP growth target for the current fiscal year (July 2013-June 2014).
Agricultural sector is one of the key driving-forces of Bangladesh's economy as it contributes almost 19 percent of the total GDP.
The governor, who also elaborated on farm-credit distribution guidelines, said banks are instructed to ensure effective monitoring system so that only real farmers get the agricultural credit timely according to the agricultural credit policy and norms without any harassment, as well as proper utilization of the credit.
He said the BB will continue the intensive monitoring of the whole system to reach the target of the program through four national, three specialized, 29 private and nine foreign banks.
The banks in the 2012-13 fiscal year (July 2012-June 2013) accomplished 146.67 billion taka (1.88 billion U.S. dollars) in agriculture loan disbursement, or 103.8 percent of the set target of 141.30 billion taka (1.81 billion U.S. dollars), the BB data showed.
According to the BB, the policy, designed to extend the scope of agricultural credit, financial inclusion and utilization of technology in expansion of banking activities in rural areas, increase money flow in rural sector, ensure food security and poverty alleviation, is expected to gain the desired results.
"We have fertile land and large population. So it is high time to give more emphasize to strengthening our national economy with a view of ensuring food security through increase in agricultural production as well as by reviving the rural economy through vast expansion of employment generating activities."
The BB governor said the government has given maximum importance to increasing production of food grain by keeping agriculture as a priority sector.
Due to the implementation of the agriculture-friendly policy by the government, he said Bangladesh has become almost self- sufficient in food production.
He added in line with the pro-poor agricultural policy of the government, an Agricultural and Rural Credit Policy and Program for the fiscal year 2013-2014 has been formulated in order to sustain this trend.
Retaining the basic features of agriculture and rural policy and program of previous fiscal year, this policy has some new features while giving priority to three core sector of crop, fisheries and animal resources.
Comparatively less developed and neglected areas like bio- fertilizer shall be given priority in disbursing agricultural credit, the BB stressed.
"Banks must fulfill their targets in agricultural and rural credit disbursement. In case of failure to achieve their targets, punitive measures will be taken."