New Delhi, Aug 26 (UNI) A two-day national conference to concretise the proposal of issuing Negotiable Warehouse Receipts (NWRs) to farmers, helping them raise finances to fulfil requirement of the funds which invariably force them to go in for distress sale of their produce, will be organised here on September 12-13.
If the proposal is given the nod, the farmers will get NWRs issued which will ensure them finance against their produce stored in registered warehouses. And it will also have a significant impact on the commodity trading, banking and insurance sectors by providing safeguards against risks inherent in lending against commodities.
Besides, the farmers can also trade the NWRs and obtain finance against NWRs. Generally, at the time of harvesting, the price of agricultural commodities tends to be lower because of positive supply situation and farmers often do not get adequate price for their produce.
By depositing their produce in a registered warehouse and obtaining NWR, the farmers can use it as collateral for obtaining short-term borrowing for their working capital requirement for the current sowing season from banks. When the price of the stored produce goes up they can sell it, repay the loan and get a surplus income.
The conference will also discuss the impact of the Warehousing (Development&Regulation) Act 2007 on the warehousing scene in the country.
Several stakeholders, including FCI, the Central Warehousing Corporation, Food Corporation of India, Ministry of Consumer Affairs, Food and Public Distribution and FICCI would participate in the conference.
The main objectives of the Warehousing Act are to make provisions for development and regulation of the warehouses, negotiability of the warehouse receipts, establishment of a Warehousing Development&Regulatory Authority and to lookafter the related matters.
The Act aims to address the long desired need to develop a formal mechanism of NWRs for commodities, especially agricultural commodities. It prescribes the form and manner of registration of the warehouses and issuance of the NWRs. It also prescribes establishment of Warehousing Development&Regulatory Authority (WRDA), which is being set up.
The proposed Regulatory Authority will register and accredit warehouses intending to issue NWRs and put in place a system of quality certification and grading of commodities to protect the interests of the holders of the NWRs against negligence, malpractices and fraud.
The pledging/collateralisation of agricultural produce with a legal backing in the form of NWR will lead to increase in flow of credit to the rural areas, reduce the cost of credit (due to certainty of recovering credit by the bank) and will spur other related activities like standardisation, grading, packaging and insurance services in the agricultural sector.
With the ever increasing requirement of quality storage, warehousing industry will also get a boost in the rural areas.
This will also fill gaps in the logistic chain of agri-business in the rural sector, an official release said here.
Apart from individual farmers, cooperative societies and Self-Help Groups (SHGs) will also be able to assist their members particularly small and marginal farmers by aggregating their surplus produce and keeping the same in the registered warehouses, it said.
An established NWR system will also act as an incentive for farmers to produce goods of quality and specification amenable to standardisation and storage in the registered warehouses.
The conference, ''Warehousing 2008: The Warehousing (Development&Regulation) Act: Issues and Challenges'', will be followed by regional conferences at Chennai, Chandigarh, Kolkata, Mumbai and Bhopal later this year to generate awareness about the provisions of the Act among the stakeholders concerned.
UNI JSS SK VC2015
If the proposal is given the nod, the farmers will get NWRs issued which will ensure them finance against their produce stored in registered warehouses. And it will also have a significant impact on the commodity trading, banking and insurance sectors by providing safeguards against risks inherent in lending against commodities.
Besides, the farmers can also trade the NWRs and obtain finance against NWRs. Generally, at the time of harvesting, the price of agricultural commodities tends to be lower because of positive supply situation and farmers often do not get adequate price for their produce.
By depositing their produce in a registered warehouse and obtaining NWR, the farmers can use it as collateral for obtaining short-term borrowing for their working capital requirement for the current sowing season from banks. When the price of the stored produce goes up they can sell it, repay the loan and get a surplus income.
The conference will also discuss the impact of the Warehousing (Development&Regulation) Act 2007 on the warehousing scene in the country.
Several stakeholders, including FCI, the Central Warehousing Corporation, Food Corporation of India, Ministry of Consumer Affairs, Food and Public Distribution and FICCI would participate in the conference.
The main objectives of the Warehousing Act are to make provisions for development and regulation of the warehouses, negotiability of the warehouse receipts, establishment of a Warehousing Development&Regulatory Authority and to lookafter the related matters.
The Act aims to address the long desired need to develop a formal mechanism of NWRs for commodities, especially agricultural commodities. It prescribes the form and manner of registration of the warehouses and issuance of the NWRs. It also prescribes establishment of Warehousing Development&Regulatory Authority (WRDA), which is being set up.
The proposed Regulatory Authority will register and accredit warehouses intending to issue NWRs and put in place a system of quality certification and grading of commodities to protect the interests of the holders of the NWRs against negligence, malpractices and fraud.
The pledging/collateralisation of agricultural produce with a legal backing in the form of NWR will lead to increase in flow of credit to the rural areas, reduce the cost of credit (due to certainty of recovering credit by the bank) and will spur other related activities like standardisation, grading, packaging and insurance services in the agricultural sector.
With the ever increasing requirement of quality storage, warehousing industry will also get a boost in the rural areas.
This will also fill gaps in the logistic chain of agri-business in the rural sector, an official release said here.
Apart from individual farmers, cooperative societies and Self-Help Groups (SHGs) will also be able to assist their members particularly small and marginal farmers by aggregating their surplus produce and keeping the same in the registered warehouses, it said.
An established NWR system will also act as an incentive for farmers to produce goods of quality and specification amenable to standardisation and storage in the registered warehouses.
The conference, ''Warehousing 2008: The Warehousing (Development&Regulation) Act: Issues and Challenges'', will be followed by regional conferences at Chennai, Chandigarh, Kolkata, Mumbai and Bhopal later this year to generate awareness about the provisions of the Act among the stakeholders concerned.
UNI JSS SK VC2015
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