ISLAMABAD - The World Bank on Friday signed agreement worth of $300 million with Pakistan to support the agriculture sector of the Punjab and $5 million agreement with Khyber Pakhtunkhwa to improve the nutrition status of children and women.

Economic Affairs Division (EAD) Secretary Arif Ahmed Khan signed the Loan and Grant Agreements on behalf of government of Pakistan while representatives of government of Punjab and government of Khyber Pakhtunkhwa signed their respective Project Agreements while Country Director Patchamuthu Illangovan represented the WB.

The government of Punjab would finance $1290 million for Strengthening Markets for Agriculture and Rural Transformation (SMART) in Punjab. Meanwhile, the World Bank would give loan of $300 million for the SMART programme.

The World Bank in December last year had approved $300 million to modernise agriculture in Punjab province to raise farmers' incomes, give consumers better quality and safer food at lower prices, create jobs on farms and agribusinesses, and improve the use of irrigation water.

The SMART Punjab programme is aimed at helping the government of Punjab to promote transformational change in the crop and livestock subsectors by focusing on activities contributing to three Results Areas: (a) increased on-farm productivity and value of crops and livestock; (b) increased value addition and competitiveness of crops and livestock; and (c) enhanced resilience of smallholder farmers to climate change and natural disasters. Each Results Area involves a specific combination of policy reforms, institutional strengthening and public investments.

The resources provided by the World Bank will be part of a larger programme by the government of Punjab that aims at better harnessing the enormous potential for farming in the province, with its fertile soils and extensive irrigation system.

It addresses the paradox that while Punjab's farmers earn too little, people pay high prices for low quality food. This situation is largely the result of farm policies that have hardly changed in the last 50 years. These include extensive subsidies that are inefficient and ineffective, and government spending that does not provide widespread benefits and results in wasteful water use.

Meanwhile, another agreement of additional financing to Khyber Pakhtunkhwa for the Enhanced Nutrition for Mothers and Children Project of $ 5.0 million (Grant) was also signed on Friday.

The objective of the grant is to scale-up nutrition intervention in the province of Khyber Pakhtunkhwa to improve the nutritional status of children under two years of age, as well as pregnant and lactating women.

The EAD secretary thanked the World Bank for extending its continuous support to the government of Pakistan in its efforts to achieve sustainable economic development in the country.