Impact of agriculture credit on food production and food security in Pakistan

The purpose of this study is to bring out the role of financial intermediation in food production and food security. Pakistan is among one of those countries which are food insecure. Agriculture credit can increase the food production which ensures the food security. The widely accepted definition of food security given by Food and Agriculture Organization (FAO) also emphasizes on the accessibility and availability of food for everyone and everywhere. Abundant production ensures the availability of food which further leads to low prices (economic access i.e. accessibility) because of excessive supply. This study is conducted to reveal the impact of credit on food production. Zarai Taraqiati Bank Limited (ZTBL) is the major public bank providing agricultural credit to fulfill the financial requirements of agricultural activities. Bank disbursed the major chunk of credit in district Bahawalnagar of Pakistan, therefore this district is selected as a sample. Survey technique is used and data is collected through structured questionnaire from borrowers and non-borrowers. Collected data is analyzed by using Independent t-test. Findings reveal that production of the borrowers increased after utilizing the credit because of the use of quality farming inputs. The paper concludes that if financial constraints are removed then production increases which further can reduce food insecurity by ensuring availability of food for everyone. Paper is also helpful for policy makers to formulate and improve food security policy by strengthening the credit markets.