Centre launches Rs 1,000 crore credit guarantee scheme for farmers to avail post-harvest loans

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The government on December 16 launched Rs 1,000 crore credit guarantee scheme for post-harvest finance availed by farmers against electronic negotiable warehouse receipts (e-NWRs).

Launching the scheme, Minister of Consumer Affairs, Food and Public Distribution Pralhad Joshi said the government has taken the measure to minimise distress selling by farmers.

Joshi urged the Warehousing Development and Regulatory Authority (WDRA) to bring warehouse developers under its ambit and asked them to build warehouses nearer to farm lands.

The minister said the scheme is a significant initiative as a guarantee cover for the loans availed by farmers and traders against electronic negotiable warehouse receipts (e-NWRs).

The scheme has been introduced to instill confidence in bankers, encouraging the extension of pledge finance against e-NWRs for farmers /traders who store their agricultural / horticultural produce in warehouses registered with the WDRA, the government said in a press release.

The term lending in agriculture and the post-harvest pledge finance lending need increased attention, said Sanjeev Chopra, Secretary, Department of Food and Public Distribution. The launch of the scheme with a corpus of Rs 1,000 crore would boost the post-harvest lending to Rs 5.5 lakh crore in the next 10 years, added Chopra.

Chopra said that creating awareness about the CGS-NPF scheme, making National e-Repository Limited (NERL) and Countrywide Commodity Repository Limited (CCRL) repository charges reasonable and working towards registering more warehouses need to be prioritised. Increasing warehouse registration to 40,000 in the next 1-2 years needs to be taken up, he added.

The government said the scheme majorly focuses on small and marginal farmers, women, SC, ST and Divyangjan (PwD) farmers with a minimal guarantee fee. Loans extended to small and marginal farmers up to Rs 75 lakhs will have coverage of 80 to 85 percent and loans extended to MSMEs, FPOs and traders up to Rs 200 lakhs will have coverage upto 75 percent under the scheme.

The credit guarantee scheme would serve to increase post-harvest lending against e-NWRs and thereby, play a significant role in improving farmers’ income, the government said.