The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved a proposal to double the guarantee from Rs 9500 crore to Rs 19,000 crore 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 45 crore to the Small Farmers Agri-Business Consortium (SFAC) for meeting its existing liability and settlement of extant claims.
According to a press statement, “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 0fee”. The government guarantee to Nafed has been doubled to Rs 19,000 crore from Rs 9,500 crore for undertaking procurement of pulses and oilseeds under the Price Support Scheme (PSS), it said.
“As the market price of almost all pulses and oilseeds are ruling below Minimum Support Price (MSP) as notified by Govt. of India, provision of Govt. Guarantee will help in protecting the farmers producing these commodities from making distress sales during the peak arrival period and to provide remunerative prices with a view to encourage higher investment and production and also to safeguard the interest of consumer by making available supplies at reasonable price with low cost of intermediation,” it said.