NEW DELHI: The Centre on Wednesday approved doubling of government guarantee, provided to lender banks, from Rs 9,500 crore to Rs 19,000 crore for procurement of pulses and oilseeds at minimum support price (MSP) by Nafed, a farmers’ cooperative. The move will help in protecting farmers from making distress sales of these produce during the peak arrival period.
Procurements of pulses and oilseeds by Nafed will be done under the existing Price Support Scheme (PSS) which is implemented at the request of the state government concerned. The decision to double the government guarantee was approved by the Cabinet Committee on Economic Affairs (CCEA). It also approved the government guarantee up to Rs 45 crore to the Small Farmers Agri-Business Consortium (SFAC) for meeting its existing liability and settlement of existing claims.
It comes just a day after release of the agriculture ministry’s estimate of record production of foodgrain (277.49 million tonnes) with the output of pulses too touching new high of 23.95 million tonnes (MT) during 2017-18 crop year (July-June). The estimated production of pulses during current year is likely to be is higher than the five years’ average production by 5.10 MT.
The decision on Wednesday also includes waiver of 1% government guarantee fee. “In view of fall in prices of pulses and oilseeds below the MSP, the provision of government guarantee will help in protecting the farmers from making distress sales during the peak arrival period,” said a government statement.
The basic objectives of the PSS are to provide remunerative prices to the growers for their produce with a view to encourage higher investment and production and to safeguard the interest of consumers by making available supplies at reasonable prices with low cost of intermediation.