High rate of Interest on form credit discourages farmers to seek bank Ioann. This has already made an adverse impact on agricultural output In many arcs of the country.

The farmers pay 16 per cent interest on the loans while Jute traders arc required to pny only 9 per cent interest on loan in ease of current capital. Often farmers fall to repay the bank loans in due time and face certificate eases.

Itanking experts said such discrimination has left a nega live impact on the agricultural sector. Irrigation and transplantation of High Yielding Varieties (HYV) arc affected. Political leaders. In course of their hectic election campaigns, have committed that Interest on certain amount of loans will be waived and in many eases, certificate eases will be withdrawn.

Bangladesh Bank. In its reform bld of the banking sector, had fixed the maximum limit of agricultural Interest for agricultural and commercial banks at 16 per cent. The bank authorities defended the imposition of this Interest saying this would prevent the loans to become 'bad debts.'

But other experts say If the loans arc given to real farmers, there will be no problems of bad debts. They say the real problems lie with the manipulation of agricultural loans which arc changing hands to the non-farmers through middlemen. The vested quarters arc playing a dubious role In the proper distribution of agricultural loans.

The experts say even the urban housing, exports of all commodities (other than Jute) have interest rates of 8-1 1 per cent with subsidies being offered to certain sectors. The rale of subsidy for the cu.Tcnt capital for iule Industry to 6.1 per cent. For the special projects, the Interest rate Is between 8 and 12 per cent.

Reports from rural areas suggest the rigidity in the distribution process of agricultural loans arc discouraging the farmers to cultivate boro crops intensively. Price hike <4 diesel und shortage of pumps arc also posing as hindrances.

• The interim government pledged lo reduce the diesel price and keep the certificate eases suspended In an earlier It is however not clear whether the Government would reduce the diesel price due to Instable situation In the oil market and uncertain position of Its abundant availability the experts added.