Abstract

There is a profound impact of agriculture credit on output, employment, and capital accumulation especially for agriculture-based economies like Pakistan. The empirical results show that agriculture sector output is positively and significantly affected by capital stock and labor force. The improvements in mechanization, seeds quality, timely availability of fertilizers and pesticides backed by enhanced farm management skills and the adoption of modern techniques have contributed to increasing agricultural output. Therefore, the policy initiatives fostering this transition will have a positive impact on overall agricultural practices in Pakistan. The productivity of capital and labor has increased mainly due to making available water at farm gate, installation of cost-effective techniques for tube wells, and easy access to credit for farmers. Central Bank has installed a mechanism to check the outflow of agriculture credit to other sectors of the economy that has improved the apportion efficiency of the available resources resulting in enhanced output

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