Govt launches Credit Guarantee Scheme to provide post-harvest financial support to farmers

With a corpus of Rs 1,000 crore, the scheme aims to provide post-harvest financial support to farmers against electronic Negotiable Warehouse Receipts (e-NWRs) issued for commodities.

In a significant step to empower farmers and prevent distress selling, Union Food and Consumer Affairs Minister Pralhad Joshi launched the Credit Guarantee Scheme for e-NWR based Pledge Financing (CGS-NPF). With a corpus of Rs 1,000 crore, the scheme aims to provide post-harvest financial support to farmers against electronic Negotiable Warehouse Receipts (e-NWRs) issued for commodities stored in Warehousing Development and Regulatory Authority (WDRA)-accredited warehouses.

Highlighting the scheme’s transformative potential, Joshi emphasized that it will encourage banks to adopt a liberal approach towards extending credit to farmers, enabling them to store their produce and fetch better market prices. He urged WDRA to expedite warehouse registrations and develop facilities closer to farmlands, ensuring wider reach and adoption.

Key Features of the CGS-NPF Scheme:

Coverage: Loans up to Rs 75 lakh for small and marginal farmers will enjoy 80-85 percent coverage, while loans up to Rs 200 lakh for MSMEs, FPOs, and traders will be covered up to 75 percent.

Focus Areas: Priority will be given to Small and Marginal Farmers, Women, SC/ST, and Divyangjan (PwD) farmers.

Objective: To enhance post-harvest lending, improve farmers’ income, and minimize distress sales.

Target: The scheme aims to boost post-harvest lending to Rs 5.5 lakh crore over the next decade.

Union Minister of State Nimuben Jayantibhai Bambhaniya emphasised the scheme’s alignment with Prime Minister Narendra Modi’s vision for farmers’ welfare, while MoS B.L. Verma highlighted its role in mitigating credit risk and warehouseman risk, bolstering trust among banks and stakeholders.

Sanjeev Chopra, Secretary, Department of Food and Public Distribution, emphasized the need to scale up warehouse registrations to 40,000 over the next 1-2 years. He also pointed to the integration of the e-Kisan Upaj Nidhi platform, which will streamline end-to-end lending processes for farmers, reducing bureaucratic delays.

The scheme has been widely welcomed by stakeholders, particularly the banking sector, as it ensures greater availability and accessibility of credit for post-harvest activities. It also supports FPOs, MSMEs, and small traders, strengthening the agricultural value chain and food security.

This initiative is a significant step towards empowering farmers, enhancing credit flow, and ensuring better financial returns for their produce.

With a corpus of Rs 1,000 crore,