HYDERABAD: To avoid distress selling and ensure better pricing for farmers, the National Bank for Agriculture and Rural Development (Nabard) has signed a pact with Origo Commodities to help farmers in AP and TS pledge their produce under negotiable warehouse receipt financing.
According to Nabard, last year, small and marginal farmers got 20 to 30 per cent higher price in Telangana under a similar initiative. This year, the programme is being extended to farmers in both the states and will enable farmers to obtain bridge loans at low interest rates. It also avoids distress sale and encourages farmers to sell the produce when the price is right. Warehouse receipt financing helps ‘monetise’ the product without actually selling the commodity at the time of harvest. In case of negotiable warehouse receipt financing, the farmer is allowed to make a deposit of his harvested crop at a warehouse and obtain pledge financing to the extent of 70-75 per cent of the value of the commodity.
“The initiative also focuses on Warehousing Development and Regulatory Authority accreditation so that farmers can benefit from post-harvest loans at 7 per cent per annum with interest subvention,” said Jiji Mammen, chief general manager, AP and TS Regional Office, Nabard.