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The Government’s Rs 1,000-Crore Credit Guarantee Scheme for Post-Harvest Loans Launched

Union Minister Prahlad Joshi has also launched Rs 1,000 crore Credit Guarantee Scheme e-NWR-based Pledge Financing for financial assistance to farmers and traders. The scheme, designed to lessen distress selling, will provide 85% loan coverage to small farmers and up to 75% for traders and MSMEs.

Union Minister for Parliamentary Affairs, Coal, and Mines,Pralhad Joshi, has introduced a Credit Guarantee Scheme for e-NWR-based Pledge Financing (CGS-NPF) to enable easy post-harvest financing of farmers. Under this scheme, which involves a corpus of Rs 1,000 crore, farmers can obtain loans against electronic negotiable warehouse receipts (e-NWRs) after depositing their produce in Warehousing Development and Regulatory Authority (WDRA)-accredited warehouses.

Government’s Guarantee Scheme

In his address at the launch of the scheme, Joshi noted that it had eliminated distress selling by farmers. He also added that every warehouse must register with the WDRA and called on promoters to put up facilities as close to the farming areas as possible. Joshi was optimistic of the central role played by e-registration in the viability of the scheme. It offered guarantee cover for loans availed by farmers and traders against it. The others are the installations playing in house and warehousing the store of agricultural portions and produce, especially demand in the state of registered warehouses. The Minister, based on his personal understanding, was satisfied that the banks could restructure and repay the receivers back with e-NWR receipts. Joshi reiterated Prime Minister Narendra Modi’s determination and concern for farmers when he noted that the government was still providing fertilizers like urea at the lowest global prices even if the prices in the wake of Ukraine and Russia were affected. Union Minister of State for Consumer Affairs, Nimuben Jayantibhai Bambhaniya, praised the scheme as a focal point of the government’s confirmatory resignation to facilitate the lives of farmers. Union Minister of State B.L. Verma also noted that CGS-NPF covered the risks of credit and warehouseman, which increased the confidence in the elevator, especially by financial institutions.

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Financial Institutions

Highlighting the need for more emphasis on term lending in agriculture and post-harvest financing, Sanjeev Chopra, Secretary, Department of Food and Public Distribution, said that the move would help spur growth and predicted that post-harvest lending would leap to Rs 5.5 lakh crore in the next ten years. Chopra also stressed the need to create awareness about the scheme, meritorious repository charges of the National e-Repository Limited (NERL) and Countrywide Commodity Repository Limited (CCRL), and fast-tracking of warehouse registrations. In this two-year mission, they aim to onboard 40,000 warehouses—a solid infrastructure that can help farmers.

A revamped e-Kisan Upaj Nidhi platform was also complimented for enabling a smoother lending process so farmers could access loans without having to meet with banks multiple times.

Advantages for Underprivileged Farmers and Business Owners

CGS-NPF targets small and marginal farmers, women, SC, ST, and Divyangjan (persons with disabilities) with low guaranteed fees. The scheme is also extended to small traders, MSMEs, and Farmer Producer Organizations (FPOs).

Under the scheme:

• For loans up to Rs 75 lakh for agricultural purposes, the guaranteed coverage is 80–85%.
• For non-agricultural purposes, loans up to Rs 2 crore get up to 75% coverage.
• It charges farmers a significantly lower guaranteed fee of 0.4% per year compared to the 1% charged to non-farmers.

It is expected that the CGS-NPF scheme will improve the availability and accessibility of financing for farmers and other stakeholders and help provide a vital push to economic growth. To address the challenges of post-harvest and financial risk, the initiative aims to ensure that farmers’ income is increased and has implications for national agricultural development.

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