Pralhad Joshi launches ₹1,000-cr credit guarantee scheme to help farmers access post harvest loans

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Union Food Minister Pralhad Joshi on Monday launched a ₹1,000 crore credit guarantee scheme to help farmers easily access post-harvest loans by leveraging electronic warehouse receipts.

“We have provided a corpus fund of ₹1,000 crore with the objective of encouraging banks to take a liberal approach in lending loans against approved warehouse receipts,” the minister said after launching the scheme at a function in New Delhi. He said this would go a long way to achieve financial inclusion, which is the main objective of the government.

He cited how street vendors are benefiting from the Mudra scheme as they used to pay maximum share of their profit as interest to the money lenders and said the corpus fund will also be similarly beneficial for the farmers. Joshi said the major challenge is to bring all warehouses, particularly very small godowns, under its ambit as the objective is to prevent distress sale of farmers.

Potential to expand

He urged banks to have a liberal approach, only after fulfilling all their parameters, in extending credit to the farmers. The scheme aims to reduce banks’ reluctance to lend against electronic negotiable warehouse receipts (e-NWRs) issued by Warehousing Development and Regulatory Authority (WDRA) registered repositories.

Food Secretary Sanjeev Chopra said the significant potential for expansion, noting that current post-harvest lending stands at just ₹40,000 crore out of total agricultural lending of ₹21 lakh crore. Currently, lending against e-NWRs is a mere ₹4,000 crore.

“We are hoping that post-harvest lending will grow to ₹5.5 lakh crore over the next 10 years,” Chopra said, emphasising that the target is achievable with coordinated efforts from the banking and warehousing sectors.

The secretary also stressed the need to streamline the e-Kisan Upaj Nidhi online platform, create awareness among farmers about pledge financing, review depository charges and increase warehouse registrations beyond the current 5,800.

BL Verma and Nimuben Jayantibhai Bambhaniya, both Ministers of State for Food and Consumer affairs, and WDRA Chairperson Anita Praveen were also present at the event.