Low interest loans policy aims to boost agriculture development
Low interest loans policy aims to boost agriculture development
The government is formulating plans to promote livestock breeders groups and agricultural producers to expand their commercial production by supplying low interest loans to targeted groups.
To obtain the low interest plan, farmers are required to submit an economic feasibility study of their farm and their business location to the Ministry of Agriculture and Forestry. It will then be inspected by a committee for approval.
Agricultural authorities believe the plan will help to speed development in the sector and that low interest loans should allow for the i ntroduction of modern technical equipment onto local farms.
The development of the country's agriculture industry sector has experienced slow development in comparison to other sectors over the past few years.
In the 2012-2013 fiscal year, the agriculture sector grew only 3.1 percent. Under the plan the government hopes to achieve growth of 3.3 percent in 2013-2014, according to a report fro m the Ministry of Planning and Investment.
Agricultural development was in need of an injection of cash as so far most bank loans have been given to construction business and large investment project, senior economist Dr Mana Southichak said.
Laos has rich natural resources and fertile agricultural land that has a high potential for development, but there is still a lack of investment in the sector.
Farmers are currently struggling with high interest loans at 14-15 percent a year through the Agricultural Promotion Bank, while neighbouring countries supply loans to their farmer groups at only 3-5 percent interest.
Lao farmers have battled this hindrance for many years with no apparent solution from concerned sectors of the government, at least until recently, according to a Vientiane farmer named Mr Phouvong Phongphansay.
The government has not yet pinpointed how much credit will be made available or how interest rates will be contained.
In the past, several farming families who operated livestock breeding businesses have declared bankruptcy as their businesses could not recover from the effects of disease outbreaks or natural disasters.
The government has formulated compensation policies and postponed repayments; however these require further development in order to prove effective.
Farmers are also calling on the government to control the price of domestic product as each year they are confronted with decreasing value, while the cost of animal feed, fertilisers and other agricultural equipment import products remains high.
vientiane times
