The government has decided to waive agricultural loans up to Tk 10,000 as promised in the BNP’s election manifesto.

The decision was made at a cabinet meeting on Thursday (February 26). Cabinet Secretary Nasimul Ghani gave this information after the meeting.

Earlier in the morning, a cabinet meeting was held at the Secretariat under the chairmanship of Prime Minister Tarique Rahman.

The Cabinet Secretary said that the government, as per its election manifesto, has decided to waive off agricultural loans up to Tk 10,000 including interest in the grain, crop, fishery and animal husbandry sectors. The main aim of this is to ensure social security of poor farmers and strengthen the backbone of the agricultural sector.

According to Bangladesh Bank, government commercial and specialized banks and private commercial banks owe farmers around Tk 1,550 crore, including interest, as of February 25 this year, which will be covered by this waiver.

Stating that the loan waiver will benefit poor farmers, the Cabinet Secretary said, “If this loan waiver is waived, approximately 1.2 million farmers will directly benefit. As a result, small and marginal farmers will be freed from the burden of loans, which will increase their motivation and help increase production in the country’s agricultural sector.”

He said that the money that farmers would have spent on loan installments can be invested in better quality seeds or modern irrigation technology. With no debt burden on their heads, farmers will be able to start farming with renewed enthusiasm in the next season. Through this waiver process, the credit record of farmers will be good. As a result, they will be able to take agricultural loans from banks at low interest rates again, which will protect them from the high interest rates of local moneylenders.

The Cabinet Secretary said that as the debt burden is reduced, farmers will be more encouraged to engage in the crop, fisheries and animal husbandry sectors. This will increase national agricultural production and reduce dependence on imports. The almost immediate impact of the loan waiver will be a reduction in rural-urban migration and a reduction in rural inflation.

It was also reported that during the 1991-1996 period of former Prime Minister Khaleda Zia’s government, interest and principal on agricultural loans up to Tk 5,000 were waived, which played an effective role in alleviating the hardships of farmers and increasing agricultural production.