Pakistan is an agricultural country and it is dependent on the agricultural sector. This sector gives employment to many residents of Pakistan. This sector also ensures food security and supports a healthy balance of payment. The few issues in the sector are the minimal use of technology, the large population, the threats posed by the climate transformation which is quite abrupt these days and the lack of access to formal credit. All these issues are required to be addressed using innovative solutions and technology. Imran Khan was also of the view that there is one way to overcome the challenges of the agriculture sector and that is to merge its techniques with the technology. For this, the domestic market players need to play their role in understanding the small farmers’ demands and support them to scale up their value chain. Such innovative smart solutions can bring sustainability and efficiency to the agri-value chain. SECP has provided great incentives and finances to the start-ups to penetrate the market and also has asked the entrepreneurs to pitch their ideas for live testing in a controlled environment. It has also played a great role in simplifying the regulatory framework for Non-bank Financial Companies to be flexible for the fintech-based business models. Many NBFCs that are focused on agricultural credits came into being. Many prospective investors have approached the SECP to provide customized loan products which are designed for the farmers. One more big advancement in the agricultural sector is the introduction of Collateral Management Companies Regulations to give awareness about the concept of warehousing of agricultural products. The electronic warehouse receipts have also been introduced which are transferrable and tradable at future exchanges and can be shown to financial institutions for the loan. In addition to these many other agricultural insurance products and crop insurance schemes have been brought forward by SECP. It has also approved parametric insurance solutions for live testing under its regulatory sandbox initiative. Parametric insurance provides protection to the insured products based on parameters such as crop yield in a unit area where a technology-based solution has been applied. More than 60 farmers in Rahim Yar Khan covering a total area of 168 acres have been given insurance and they are in the experimental phase. The stakeholders from all the agricultural sectors need to work in collaboration with the agri-tech companies looking towards the application of the technology to ease the farmers. There are many hindrances in digitizing the whole value chain and giving awareness to the farmers to get access to digital insurance which can be addressed through the combined efforts of the different related institutions. Also Read: The Role of Technology in Agriculture
