2. Agriculture Credit What is Credit? According to Samuelson “ Credit is the use of someone else’s funds in exchange for a promise to pay with or without interest at a later date” “ Farm Credit or Agriculture Credit is the count of loan or Credit obtained form any source for the promotion & development of Agriculture”

3. Agriculture Credit Classification of Agriculture Credit 1.Short Term Credit: Provided for one year, purpose is for purchasing of fertilizers, pesticides etc. 2.Medium Term Credit: Provided for one to five years, Purpose is purchasing of spry machines or drainage improvements etc. 3.Long Term Credit provided for a period exceeding five years, purpose for purchasing tractors, harvesting machines & install of tube wells/ agriculture land etc.

4. Agriculture Credit Sources of Agriculture Credit Non-Institutional or Informal Sources Village Money Lenders Friends & Relatives Landlords Institutional or Informal Sources Zarai Taraqiati Bank Limited ( 1961, only agri credit, low interest) Commercial Banks ( More formalities, High interest/ ZTBL) Cooperative Societies ( 1904, in 1990 Coop 60562, advance to mem) Cooperative Banks ( old form, each province, advance every type) Taccavi loans (up to 1960s, crop failure, were at low interest rate)

5. Agriculture Credit Need of Agriculture Credit Agrarian Economy Agriculture Backwardness Low income of farmers Uneconomic Holdings Storage & Marketing Debt Irrigation facility Farm productivity Interim difficulties Modern Technologies Unproductive Expenditures Agriculture indebtedness in Pakistan Natural climates Civil & Criminal Suits Unorganized Marketing Conditions

6. Agriculture Credit Problems of Agriculture Credit Small Units Damage to crops & Land Low & Uncertain yields & incomes Lack of Credit worthiness & Security Small & large cultivators Unproductive uses High Cost Limited flow of Capital to Small Farmers Delayed disbursement of Credit

7. Agriculture Credit Measures to Solve those Problems Agriculture Credit Institutions (ADFC 1952 )(ABP 1957 )(ADBP 1961 ) ( ZTBP) Federal Bank for Co-operatives (1976) Agriculture Credit Advisory Committee (1972) Special Schemes (1977 extend credit amount) Recovery of Loan Finance in kind & supervised Pass Book System