Bank guarantee limit for pulses & oilseeds for Nafed doubled to Rs 190 bn

The Cabinet Committee on Economic Affairs (CCEA) today approved a proposal to double the guarantee to Rs 190 billion to cooperative Nafed to help it obtain credit from banks for procurement of pulses and oilseeds at the support price.

The CCEA also approved the government guarantee up to Rs 450 million to the Small Farmers Agri-Business Consortium (SFAC) for meeting its existing liability and settlement of extant claims, an official statement said.

"These government guarantees are provided for a period of five years i.e. till 2021-22 by Government of India and with waiver of 1 per cent government guarantee fee," the statement said.

The government guarantee to Nafed has been doubled to Rs 190 billion from Rs 95 billion for undertaking procurement of pulses and oilseeds under the Price Support Scheme (PSS), it said.

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 and to provide remunerative prices, it added.