Govt move to monetise farmers' produce stocked in warehouses

New Delhi: In a way to reduce farmers' dependency on moneylenders, the government has decided to monetise their agricultural produce stocked in government-managed warehouses. As per the new move, the government would issue an electronic receipt to farmers with the total value of the product stored in warehouses, which can be mortgaged as an asset.

According to officials of Consumer Affairs Ministry, the issued receipt would be treated as an asset of farmers by the banks and can be monetised to avail loans from any nationalised banks. The new scheme has been christened as Electronic Negotiable Warehousing Receipt System, which would be launched on September 26 by Union Consumer Affairs Minister Ramvilas Paswan.

"The move is aimed at doubling the income of farmers as it's been noticed that when there is bumper production, farmers are bound to sell their agricultural produce even at lesser than government's minimum support price (MSP)," an official said, adding, "Most of the farmers are left with no money to for sowing next crop, so they take loans from local moneylenders by mortgaging their lands for their personal needs or agricultural expenses."

As per the plan, the farmers would get the receipt after storing their produce at any of the warehouses registered with Warehousing Development and Regulatory Authority (WDRA).

There are above 1,100 warehouses operational in the country, which are registered with the authority. According to the official, receipts issued by privately managed warehouses, which are not registered WDRA, would not get the benefit of the scheme.

"The initiative would encourage farmers to store their produce in scientifically managed warehouses, which would result in reducing the post-harvest loss of crops," the official said, adding that it would help in controlling price escalation of essential commodities as whenever there would shortage of any product; the government would release the stocked product in the market.

Commenting on the move, Ganesh Nanote, a farmer from Vidarbha, the eastern region of Maharashtra, said, "It's a good move taken in the interest of farmers. There are several farmers known to me who sell their produce at throwaway prices just to meet their personal needs and get into the trap of moneylenders."