What Are The Importance Of Agricultural Credit?

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Agricultural sector is the major contributor in the GDP of Pakistan. It contributes around 20.9% to the country’s GDP and provides employment to around 67% of the people to the rural population. Our agriculture sector supplies raw material to the industrial sector especially the textiles industries, the largest industrial sub-sector of the economy. In this perspective, any shift in the agricultural income can affect the economy as well as the rural population of the country.
Credit is the backbone of any business. Credit is the major factor in the agricultural sector as well. It is an important tool to improve high productivity and increase th income of the farmers in multiple ways. The access and availability of credit in time is crucial …show more content…

Apart from this, farmers avoid to avail credit from institutions because of collateral and complex procedures that the poor farmers have to avail. Therefore there is a dire need to start a credit program to benefit the maximum number of poor communities without any complicated collateral system. Agricultural credit is an integral part of the process of modernization of agriculture and commercialization of the rural economy.
The structure of the society is that the resourceful farmers received more than their requirements while non- influential farmers did not received anything according to their requirements.
Agricultural credit is the only way to eliminate the two major problems of Pakistan’s rural economy. Firstly, the low income of farmers due to the low acre per yield, secondly perpetual losses encountered due to no recovery of credit. Agriculture gave the farmers an independent and social identity. The introduction of easy and cheap credit is the best way to increase the agricultural production in our country and therefore the country’s GDP will also increase. Agriculture sector is the one that depends more on credit than any other sector in the

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