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Agricultural
Database
National
Agriculture Policy:
Agriculture
Credit :
It has been concluded in
different studies that the agricultural credit advanced by the financial
institutions (banks) is not easily available to the farmers. On the other
hand, Grameen Bank and quite a number of NGOs are giving credit to the
farmers, although much of that credit is being used for non-agricultural
purposes. However, the major proportion of agricultural credit still comes
from the financial institutions. But the amount of credit which is
available from this institutional source fulfills only an insignificant
portion of the total credit requirement.
In the past Agricultural
Credit Committees were formed at the district, thana and union levels to
monitor credit distribution. But, except the district level committee, two
other committees have virtually become ineffective. Even the district
committees are not performing their monitoring job regularly in all the
districts. There is no such institutional structure for monitoring
agricultural credit program at the national level, except the Bangladesh
Bank. However, the status of monthly loan disbursement and its recovery is
being monitored by the Finance Division besides Bangladesh Bank. In this
situation, government policies regarding agricultural credit are as
follows:
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To achieve the desired
goal of the Agriculture Policy, regular monitoring at all levels of
credit distribution will be strengthened. A monitoring and evaluation
committee will be formed at the national level under the chairmanship
of the Hon’ble Finance Minister for this purpose. The Hon’ble
Minister for Agriculture will act as the alternate chairman for
this committee. This committee will consist of the Governor of the
Bangladesh Bank, Secretary of the Finance Division, Secretary of the
Ministry of Agriculture, Member (Agriculture) of Planning Commission,
Managing Directors of all the government financial institutions,
Director General of the Department of Agricultural Extension (DAE) and
Director General of the Bangladesh Rural Development Board (BRDB). One
representative from the private sector organizations, one each from
Farmers’ Organization and Krishibid Organization and three
representatives from the NGOs involved in agricultural development
activities, nominated by the government, will also be included in the
committee as members. This committee will provide overall guidelines
for the implementation of institutional agricultural credit program
and make recommendations to the government for necessary actions
through reviewing the overall credit situation. Besides, the committee
will regularly monitor the status of agricultural credit at the
national level.
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Activities of the
district agricultural credit committee formed under the chairmanship
of the Deputy Commissioner will be strengthened. The district level
regional managers/highest officials of all nationalized and
specialized banks, Deputy Director of DAE of the respective district,
District Rural Development Officer of BRDB, Regional Manager of BADC,
representative from NGOs involved in agricultural development
activities and two progressive farmers nominated by the government
will be included as members of this committee . Regional
Manager/highest official of the nationalized lead bank will act as the
member-secretary of the committee. This committee will regularly
monitor and review the agricultural credit program for its successful
implementation at the field level. The committee will determine the
demand and target for agricultural credit on the basis of
recommendations made by the thana and union committees and accordingly
recommend to the national committee.
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Thana and union level
committees will be activated. Thana Nirbahi Officer will be the
Chairman of the thana committee. All union parishad chairmen of the
respective thana, managers of all the thana level government banks,
Thana Agriculture Officer and Thana Rural Development Officer will be
the members of this committee. Manager of the thana level government
lead bank will act as the member-secretary of the committee. Besides,
this committee will be strengthen by including two progressive farmers
of the respective thana and a representative from the NGOs involved in
agricultural development activities as members who will be recommended
by the district committee in consultation with the concerned member of
the parliament. This committee will review the performance of
agricultural credit distribution and recovery through the union
agricultural credit committee and take necessary actions locally for
improving the situation.
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Union parishad chairman
will be the Chairman of the union agricultural credit committee.
Respective ward member of union parishad and Block Supervisor of DAE
will be included in this committee as members. Local bank manager or
the field supervisor will be the member-secretary of the committee. In
order to strengthen the committee, one representative from the local
NGOs and two progressive farmers will be included in the committee.
The responsibilities of this committee will be to: (i) prepare a list
of potential recipients of agricultural credit on an annual basis;
(ii) fix the target for agricultural credit and recommend that to the
higher authority; (iii) monitor regularly whether the credit is being
distributed in time; and (iv) provide necessary assistance for loan
recovery.
In each of the union, thana,
district and national agricultural credit committees, women
representatives nominated by the government will be included as members.
The inclusion of elected women representatives in the union and thana
agricultural credit committees will be made compulsory.
The government has been
continuing efforts to simplify the procedures of agricultural credit
disbursement. Meanwhile, some new policies have already been introduced to
this effect. But the banks/financial institutions have to direct their
credit distribution system by maintaining a balance between the
simplification strategy and credit recovery as those institutions are to
ensure recovery of disbursed credit, which constitutes the depositors’
money. The committees on agricultural credit at different levels will
basically act as the facilitators in disbursing and recovery of credit by
monitoring, motivating people in repaying loans, recommendations through
inquiry of complaints and overall coordination, etc. While the loan
sanction will solely remain with the concerned Bank and the respective
branch of that Bank will be liable for recovery.
In order to make
agricultural credit more accessible, program of advancing bank loan with
an increasing rate will be continued. Besides, the Ministry of Agriculture
has prepared an outline of an institution titled ‘Agricultural Credit
Foundation’ following the model of Palli Karma Shahayak Foundation to
strengthen the agricultural credit system. The Agricultural Credit
Foundation will be a non-profit organization under the Company Act of 1994
with the primary objective of increasing investment in agricultural
activities through meeting the demand for credit by the landless, marginal
and small farmers; and at the same time to alleviate poverty and raise the
overall living standard by creating new employment opportunities through
intensification of crop cultivation and agricultural diversification.
Programs will be taken up to identify different government,
semi-government, non-government development agencies and social
organizations as the ‘partner organizations’ to channel micro credit
through them for this purpose. Necessary steps will be taken during the
current Fifth Five-Year Plan (FFYP) period for establishing this
institutional entity.
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