The Union Minister of Consumer Affairs, Food and Public Distribution and New & Renewable Energy, Shri Pralhad Joshi, launched the Credit Guarantee Scheme for e-NWR Based Pledge Financing (CGS-NPF). This scheme aims to provide financial support to farmers by offering a Rs 1,000-crore corpus for post-harvest finance. The scheme is designed for farmers who pledge their agricultural produce through electronic negotiable warehouse receipts (e-NWRs) after depositing commodities in Warehousing Development and Regulatory Authority (WDRA) accredited warehouses.
Objectives of the Scheme
- Minimizing Distress Selling: The primary goal of the scheme is to reduce distress selling by farmers, ensuring they receive fair prices for their produce.
- Support for Farmers and Traders: The scheme is aimed at providing financial backing to farmers and traders who store their produce in accredited warehouses, offering a guarantee cover for loans availed against e-NWRs.
Key Features of the Scheme
- Financial Support: The scheme offers a financial corpus of Rs 1,000 crore to aid post-harvest finance.
- Targeted Beneficiaries: The scheme focuses on small and marginal farmers, women, SC/ST, and Divyangjan (PwD) farmers. Additionally, MSMEs, traders, and FPOs (Farmer Producer Organizations) are also eligible.
- Loan Coverage: Loans up to Rs 75 lakh for small and marginal farmers will have a coverage of 80-85%, while loans for MSMEs, FPOs, and traders up to Rs 200 lakh will have coverage of up to 75%.
Minister’s Remarks
- Encouraging Warehouse Development: Shri Joshi emphasized the need for the WDRA to bring more warehouse developers under its jurisdiction and urged the construction of warehouses closer to farmland to make the scheme more effective.
- Liberal Approach from Banks: The Minister called for banks to adopt a more liberal approach in settling loans and financing against e-NWRs to support farmers.
- Global Fertilizer Prices: Reflecting on global challenges, Shri Joshi highlighted the Government’s efforts to provide urea to farmers at the lowest rates in the world despite rising global fertilizer prices due to ongoing conflicts.
Other Key Statements
- Smt. Nimuben Jayantibhai Bambhaniya: The Union Minister of State for Consumer Affairs emphasized that the scheme reflects the Prime Minister’s commitment to the welfare of farmers.
- Shri B.L. Verma: The Union Minister of State highlighted that the scheme addresses both credit and warehouse risks, fostering greater trust among banks.
- Shri Sanjeev Chopra: The Secretary of the Department of Food and Public Distribution stressed the need for increased attention to post-harvest pledge finance and hoped the scheme would boost lending to Rs 5.5 lakh crore in the next decade.
Importance of the Scheme
- Boosting Post-Harvest Lending: The scheme is expected to increase the availability of post-harvest lending and improve farmers’ income by facilitating easier access to finance.
- Focus on Inclusivity: By targeting small farmers, women, and marginalized groups, the scheme aims to make agricultural finance more inclusive.
Future Goals
- Warehouse Registration: Shri Chopra emphasized the need to increase warehouse registration to 40,000 in the next 1-2 years to make the scheme more accessible.
- Awareness and Accessibility: Raising awareness about the scheme, reducing repository charges, and expanding warehouse registrations are key priorities for ensuring its success.
Multiple-Choice Questions (MCQs):
- What is the primary objective of the Credit Guarantee Scheme for e-NWR Based Pledge Financing (CGS-NPF)?
- A) To provide subsidies on fertilizers
- B) To minimize distress selling by farmers
- C) To encourage the export of agricultural products
- D) To increase warehouse development
- Answer: B) To minimize distress selling by farmers
- How much corpus has been allocated for the CGS-NPF scheme?
- A) Rs 500 crore
- B) Rs 1,000 crore
- C) Rs 1,500 crore
- D) Rs 2,000 crore
- Answer: B) Rs 1,000 crore
- Which of the following groups are targeted beneficiaries of the CGS-NPF scheme?
- A) Large corporate traders
- B) Small and marginal farmers, women, SC/ST, and Divyangjan farmers
- C) International agricultural traders
- D) Only government-run agricultural organizations
- Answer: B) Small and marginal farmers, women, SC/ST, and Divyangjan farmers
- What percentage of coverage will loans up to Rs 75 lakh for small and marginal farmers have under the scheme?
- A) 60-70%
- B) 70-80%
- C) 80-85%
- D) 90-95%
- Answer: C) 80-85%
- What is the expected impact of the CGS-NPF scheme on post-harvest lending over the next 10 years?
- A) It will reduce lending by 50%
- B) It will increase lending to Rs 5.5 lakh crore
- C) It will focus only on pre-harvest loans
- D) It will eliminate the need for warehouse registrations
- Answer: B) It will increase lending to Rs 5.5 lakh crore