Launching a digital platform for farmers to secure loans against their produce when kept in officially accredited warehouses, Food Minister Piyush Goyal on Monday announced that the security deposit charges will soon be reduced.
Goyal said farmers stocking their produce at warehouses, registered with the Warehousing Development and Regulatory Authority (WDRA) would need to pay only 1 per cent security deposit instead of the current 3 per cent and soon necessary orders will be notified. This will encourage more farmers, especially small farmers, to utilise the warehouses and enhance their income and make agriculture an attractive proposition, he said.
The minister launched the digital gateway named ‘e-Kisan Upaj Nidhi’, which will be the single-point window to obtain post-harvest loans from banks against farm produce stored in the WDRA registered warehouses. The loans are provided against electronic Negotiable Warehouse Receipts (e-NWRs) and at many places, these are utilised by traders, too. Out of an estimated 1 lakh agri-warehouses in the country, only about 5,500 are registered with WDRA. The number increased only when the government made it compulsory to register in case warehouses are to be made available to the Food Corporation of India (FCI) on lease.
Emphasis on technology
However, many industry experts question the rationale of security deposit for small farmers as their produce is kept at the warehouse physically, which can be sold and recovered from the depositor in case of any failure of payment of rental, similar to what is done when loan is not repaid.
The minister emphasised the need to modernise Indian agriculture through the use of technology to enhance farmers’ income. Goyal said that farmers will easily get loans at 7 per cent interest rate, without any collateral, through ‘e-Kisan Upaj Nidhi’. Farmers would not be forced to sell their crops in distress and could chose the right time, he added.
The minister said the world’s largest grain storage capacity programme has been launched in co-operative sector and asked the WDRA to register the godown established by cooperatives without any fees. He stressed on the need to modernise the warehouses operated by the state agencies like FCI and CWC.
Through the negotiable warehouse receipt system, WDRA enables banks to improve the quality of their lending portfolio and enhance their interest in lending against goods deposited in warehouses.