SBP convened the Agricultural Credit Advisory Committee (ACAC) meeting in Multan, reaffirming its commitment to enhancing agriculture financing and driving sustainable growth in Pakistan’s agricultural sector. The meeting brought together key stakeholders, including presidents of commercial and microfinance banks, federal and provincial government officials, and representatives from Chambers of Agriculture and Farmers’ Associations, underscoring the strategic importance of agriculture in the country’s economic framework.
In his keynote address, Governor SBP, Mr. Jameel Ahmad, highlighted the critical role of agriculture in Pakistan’s economy, noting its contributions to food security, rural livelihoods, and its integration with the industrial and services sectors. While celebrating the sector’s achievements, he also acknowledged persistent challenges such as low productivity, climate change impacts, and limited financial inclusion. He urged banks to prioritize agricultural finance as a core and viable business line, ensuring that small farmers, particularly in underserved regions, gain greater access to credit facilities.
Pakistan’s agriculture sector demonstrated impressive growth in FY24. However, the first quarter of FY25 saw a slowdown, with agricultural growth dipping to 1.2% from 8.1% last year, impacting overall GDP growth, which fell to 0.9% from 2.3% recorded in Q1-FY24. The Governor pointed to signs of a modest wheat crop, emphasizing the need for resilience and innovation to sustain long-term growth. Despite these challenges, FY24 recorded a historic Rs. 2,216 billion in agricultural credit disbursement, a 25% annual increase. The momentum continued into FY25, with Rs. 1,266 billion disbursed in the first half of the year and the number of borrowers rising to 2.86 million. To further this progress, he urged banks to expand their rural presence by designating more branches for agricultural lending and deploying additional agricultural credit officers.
Looking ahead, the Governor emphasized the need for banks to fully implement their Agricultural Credit Expansion Plans and invest in human resources, infrastructure, and digital technologies to better serve farmers. He encouraged financial institutions to collaborate with relevant government departments, fintechs, microfinance institutions, and Agri-Tech companies to develop digital loan solutions and advisory services tailored for small farmers.
He outlined three key focus areas for stakeholders to transform Pakistan’s agricultural sector. First, tackling climate change challenges requires targeted strategies such as climate-smart agriculture, green financing, and farmer training to ensure food security and sustainable growth. Second, leveraging modern technology is essential to enhancing agricultural productivity. Globally, geo-spatial technologies are revolutionizing agriculture by enabling precise crop monitoring, improving resource management, and minimizing production risks. Pakistan must adopt similar pilot projects to maximize efficiency and reduce waste. Third, focusing on the livestock sector, which contributes 14% of GDP and 2.1% of the country’s total exports, presents a significant opportunity for diversifying income streams. Strengthening livestock production through advanced breeding techniques, improved dietary management, and sustainable manure management systems can enhance productivity while aligning with Pakistan’s climate targets to cut greenhouse gas emissions by 50% by 2030.
Addressing concerns raised by farmers from Baluchistan, the Governor assured that SBP would take a leading role in resolving agriculture credit bottlenecks in the province. He announced plans to convene all stakeholders, including government departments, banks, farmers’ associations, and service providers in Quetta to devise a holistic approach. He also suggested that similar initiatives be undertaken in other provinces to ensure equitable financial access for farmers nationwide.
A major highlight of the ACAC meeting was a session on climate-smart agriculture, where experts shared insights on utilizing geo-spatial technologies for precision crop monitoring, optimizing resource allocation, and mitigating climate risks. The session also introduced the Climate Resilience Fund, a World Bank-backed initiative, as a vital financing tool for microfinance banks to support climate adaptation strategies in agriculture.
