Credit Guarantee Scheme to minimise distress selling by farmers: Pralhad Joshi

Highlighting the scheme’s significance, Shri Joshi stated that it aims to minimize distress selling by enabling farmers to access affordable post-harvest finance.

Union Minister for Consumer Affairs, Food and Public Distribution, and New & Renewable Energy, Shri Pralhad Joshi, unveiled the Credit Guarantee Scheme for e-NWR Based Pledge Financing (CGS-NPF) to provide post-harvest financial support to farmers. The scheme introduces a Rs 1,000-crore corpus to support loans against electronic negotiable warehouse receipts (e-NWRs) from Warehousing Development and Regulatory Authority (WDRA)-accredited warehouses.

Addressing Distress Selling and Boosting Farmer Welfare

Highlighting the scheme’s significance, Shri Joshi stated that it aims to minimize distress selling by enabling farmers to access affordable post-harvest finance. He called on the WDRA to expedite warehouse registrations and urged developers to build warehouses closer to farmlands for increased accessibility. "This initiative guarantees loans against e-NWRs and instills confidence in bankers, promoting financial inclusion for farmers and traders," he said.

The Minister also emphasized the government’s commitment to farmer welfare, noting India’s efforts to provide the world’s cheapest Urea despite global price hikes caused by geopolitical conflicts.

Key Benefits and Inclusivity Under the CGS-NPF

The scheme prioritizes small and marginal farmers, women, SC/ST communities, and Divyangjan (PwD) farmers, ensuring inclusivity with minimal guarantee fees. The coverage includes:

• 80–85% guarantee for loans up to Rs. 75 lakhs for small and marginal farmers.
• 75% guarantee for loans up to Rs. 200 lakhs for MSMEs, FPOs, and traders.

This initiative is expected to enhance post-harvest lending, improve farmer incomes, and increase economic participation in agricultural markets.

Government's Vision for Agricultural Financing

Union Minister of State for Consumer Affairs, Food and Public Distribution, Smt. Nimuben Jayantibhai Bambhaniya, reiterated the scheme’s alignment with Prime Minister Narendra Modi's vision of ensuring farmer welfare. She added that the initiative protects farmers from financial risks, reinforcing India's agricultural backbone.

Minister of State Shri B.L. Verma emphasized the scheme's dual focus on mitigating credit risk and warehouseman risk, enhancing trust in the banking sector.

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Streamlining Agricultural Lending Through Technology

Shri Sanjeev Chopra, Secretary, Department of Food and Public Distribution, said the CGS-NPF scheme will boost post-harvest financing from Rs. 5.5 lakh crore in the next decade. He emphasized increasing warehouse registrations to 40,000 within two years and leveraging the e-Kisan Upaj Nidhi platform to simplify lending for farmers, eliminating the need for repeated bank visits.

Additionally, Shri Chopra highlighted the importance of:

• Rationalizing repository charges by NERL and CCRL.
• Creating awareness campaigns to educate farmers and stakeholders about the scheme.
• Encouraging term lending for post-harvest needs, which requires more attention.

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Economic Impact and Target Outcomes

The scheme is designed to enhance credit availability for farmers while addressing systemic gaps in post-harvest finance. By focusing on:

• Increasing warehouse infrastructure and accessibility.
• Promoting financial confidence in small-scale producers and MSMEs.
• Facilitating loans backed by secured electronic warehouse receipts.

The CGS-NPF is expected to reduce dependency on distress sales, enabling farmers to store and sell produce at optimal market conditions, thereby enhancing their profitability.

Collaborative Efforts for Sustainable Agricultural Growth

The launch event also saw participation from industry stakeholders and government officials, emphasizing a unified approach to bridge financial and logistical gaps in the agricultural sector. Shri Joshi concluded by urging banks to adopt a liberal approach towards farmers and traders, making financing accessible and effective. "This initiative not only empowers farmers but also strengthens India's agricultural economy by integrating technology with welfare policies," he remarked.

The CGS-NPF reflects the government’s commitment to building a resilient and inclusive agricultural ecosystem, positioning India as a leader in farmer-centric innovations.