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The new government scheme allows farmers to get loans by pledging stored crops in certified warehouses, ensuring better prices.
The government has introduced a new scheme to help farmers access loans against their crops Guarantee. This initiative called the Credit Guarantee Scheme for e-NWR Based Pledge Financing (CGS-NPF), will allow farmers to store their crops in certified warehouses and use them as collateral for loans. This will not only protect the crops but will also help farmers get fair prices by allowing them to sell their produce when the market conditions are better.
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Many farmers face challenges in getting a fair price for their crops because they have no place to store them. Without proper storage, crops can get damaged, forcing farmers to sell them quickly at lower prices. This new scheme addresses that issue by encouraging farmers to store their crops in safe, certified warehouses. Once stored, farmers can get a loan against their crop using an e-Negotiable Warehouse Receipt (e-NWR). This electronic document acts as proof that the crop is stored in a certified warehouse, and farmers can use it to secure a loan from a bank.
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The scheme aims to boost the development of more certified warehouses near farms. These warehouses will provide safe storage for crops and help farmers avoid high transportation costs. This will give farmers the flexibility to sell their crops when prices are higher, increasing their chances of making a better profit.
Farmers can apply for the loan through scheduled banks or cooperative banks. These banks are eligible to provide loans under the CGS-NPF scheme. Farmers can contact their nearest bank to learn more about the loan application process.
The government has allocated Rs 1,000 crore for this scheme, which started on 16 December 2024. In addition to this, the government has also been encouraging the creation of more certified warehouses through the Warehousing Development and Regulatory Authority (WDRA). This will help to ensure that farmers have easy access to storage facilities close to their farms.
This new crop loan scheme complements other government initiatives, such as the Kisan Credit Card (KCC), which offers farmers loans up to Rs 3 lakh at a subsidized interest rate. The Modified Interest Subsidy Scheme (MISS) also supports farmers by covering post-harvest loans for small farmers with KCC.
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The government's new scheme for loans against crop guarantees will provide much-needed financial support to farmers while protecting their crops. By making use of warehouses and loans, farmers can store their produce safely and also sell it at the right time, ensuring better prices and profits.