 Online edition of India's National Newspaper Saturday, May 28, 2011 ePaper | Mobile/PDA Version |
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National
Till now, the interest for such activities was 11%; now it is to be reduced to 4% Proposal to enable small farmers to command a premium on their commodities NEW DELHI: The Centre is considering a proposal to extend subsidised crop loan facilities to farmers for post-harvest management. Union Food and Consumer Affairs Minister K.V. Thomas disclosed on Friday his proposal to the Finance Ministry to provide post-harvest crop loans to farmers at a concessional rate of 4 per cent — same as the benefit extended for pre-crop loans to buy their inputs. He said a subsidised crop loan for post-harvest activities was necessary to incentivise farmers to store their produce in registered warehouses at the cheapest available rate of interest. Mr. Thomas was speaking at an international conference by the ASSOCHAM. Funds' availability Mr. Thomas admitted that the availability of finances to farmers for post-harvest activities at the high rate of interest of 11 per cent was causing hardship, particularly to small and marginal ones, and expressed confidence that funds would be made available in due course at concessional rates for harvest preservation. He also underlined the need for a structure warehousing system and hoped the Warehousing Development and Regulatory Authority would provide linkage of registered warehouses with the Agricultural Produce Market Committee and spot exchanges to enable farmers fetch better prices for their agriculture produce. The inability of the small farmers to store their produce denies them the opportunity to command a premium on their commodities during the off season. Mr. Thomas was also confident that the recently launched negotiable receipt financing mechanism would solve some of the basic problems being faced by the farmers as it was expected to increase liquidity in the rural areas, encourage scientific warehousing of goods, improve supply chain and enhance rewards for grading and quality and better price risk management.
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