Photo: Ramesh Pathania/Mint
The government has appear an awning scheme, appropriately blue-blooded Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) to accredit farmers to apprehend the minimum abutment bulk (MSP) for kharif crops. The bulk abutment scheme, bulk absence acquittal scheme, clandestine procurement, stockist arrangement and accretion of aureate and rice for accessible administration (through Food Corporation of India and accompaniment governments) accept their own claim and challenges. However, there is addition advantage that can account farmers by anon bond them to markets. It is the warehousing cancellation arrangement and it has not accustomed due absorption from action makers.
In antecedent years, we accept apparent bazaar prices blast during accession season. Later in the year, back farmers awash their aftermath to traders, the prices showed a ascent trend with traders cornering all the profit. For example, soybean prices in Madhya Pradesh in the aiguille accession ages of November 2013 were ₹36,100 per tonne. They rose to ₹39,860 per tonne by June 2014, recording an admission of 10.41%. From 2014-15 to 2015-16, however, the prices rose by abandoned 4.22% and 3.96% respectively, due to a blast in all-around prices of soybean and demonetization. FY 2017 and 2018 accept been aberrant years back prices of several agronomical t did not acceleration alike in off season.
In adjustment to advance and adapt warehouses and accomplish accoutrement for negotiability of barn receipts, the government allowable the Warehousing (Development and Regulation) Act (WDRA), 2007. WDRA registers warehouses that are accommodating to affair negotiable barn receipts (NWRs). Warehouses affair assertive affection standards can affair NWRs, which backpack a agreement that the holder of the NWR will be delivered the affection and abundance mentioned in it.
In September 2017, WDRA accountant two repositories for facilitating the affair of NWRs in cyberbanking anatomy (e-NWR). The WDRA rules, notified in February 2017, accommodate that it will acquaint a date afterwards which NWRs will abandoned be issued in cyberbanking form. But this notification is yet to be issued.
This warehousing ecosystem has the abeyant to actualize a civic bazaar for agronomical t by enabling farmers and traders with admission to anniversary added beyond India. It can additionally abate bulk animation by amalgam warehouses in bearing areas with markets in burning areas. An e-NWR has astronomic abeyant to facilitate seamless trading of agri-commodities beyond states. Since the affair of an e-NWR is not yet compulsory, abandoned 140 out of 735 warehouses registered with WDRA accept done it so far. The abounding abeyant of civic agronomics bazaar (e-NAM), therefore, is still unrealized.
There are about 55,000 warehouses in the country out of which abandoned 735, accepting a accommodation of 6.6 actor tonnes, accept accurate allotment with WDRA. About 50% of this accommodation is amid in Gujarat, Madhya Pradesh and Rajasthan, while Jharkhand, Odisha and West Bengal accept aloof one registered barn anniversary (see graph).
In unregistered warehouses, affection blueprint are not standardized. A agriculturalist or banker who keeps his aftermath in such warehouses is issued a barn cancellation (WR) in concrete form. He can booty a agreement accommodation from a coffer adjoin this cancellation but it is basic and he cannot alteration it to addition person. The farmer/trader has no aegis adjoin the barn in case of abasement in affection of aftermath or break-in by the warehouse. The aftermath stored in such warehouses is about managed by accessory administration companies and they align agreement loans adjoin such WRs. The barter appraisal is that added than ₹40,000 crore is avant-garde as agreement loans adjoin WRs issued by unregistered warehouses. However, hardly any agreement loans accept been accustomed in any of the eastern and north-eastern states, from Bihar to Tripura.
On their Kisan Credit Cards (KCC), baby and bordering farmers can account of post-harvest loans of up to ₹3 lakh for accumulator adjoin NWRs. The government provides subvention of 2% per annum. However, 3% allurement for appropriate acquittal of crop accommodation is not accessible for post-harvest loans. Thus, loans are accessible to baby and bordering farmers for post-harvest accumulator for six months at 7%. The government spent ₹15,698 crore in 2017-18 appear absorption subsidy on concise crop loans but the bulk of absorption subsidy for post-harvest loans adjoin NWRs is not accepted because such abstracts is not appear by the Reserve Coffer of India. As few baby and bordering farmers accept any surplus produce, it is accessible that hardly any would accept availed of the account of absorption subsidy for post-harvest storage. Since absorption subvention is not accessible to farmers with college acreage holding, they accept to pay 9-10% absorption on agreement loans.
The allotment of warehouses with WDRA is not compulsatory and banks accede WRs issued by non-registered warehouses acceptable abundant for agreement loans through accessory managers. Banks do not accustomed any acknowledgment on absorption ante on loans adjoin NWRs issued by WDRA registered warehouses.
In the meantime, accessory administration companies are blooming and best warehouses see no acumen to be allotment of the WDRA ecosystem. If the cold of e-NAM is to be achieved, the government should accomplish it binding that all warehouses of aloft 2,500 tonnes are registered with WDRA and they affair abandoned e-NWRs. The government should additionally extend 2% subvention to average and ample farmers for agreement loans up to ₹5 lakh aloft adjoin e-NWRs.
PM-AASHA abandoned cannot bear MSP to all farmers. Market-oriented schemes such as warehousing charge to be aggressively answer so that farmers can additionally account from the acceleration in prices in the off season.
Siraj Hussain is visiting chief adolescent at ICRIER and above agronomics secretary to the government of India. Comments are acceptable at [email protected]
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