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LATEST NEWS UPDATES | Nabard to ensure fast funds to states battling storage crisis

Nabard to ensure fast funds to states battling storage crisis

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published Published on Oct 29, 2013   modified Modified on Oct 29, 2013
-The Economic Times


KOLKATA: Eastern and North Eastern states, which grapple with acute storage deficit, will get a priority in fund allocation for setting up warehouses, National Bank for Agriculture and Rural Development (Nabard ) said.

States with food deficits like Jammu and Kashmir will also receive a priority treatment. The government has directed Nabard to treat these states favourably to cut farm losses amid implementation of the world's biggest population feeding programme under the National Food Security Bill.

The nation's apex farm lending institution has just begun funding private entrepreneurs for building cold storages, silos and cold chain infrastructure to support the government's effort.

The Reserve Bank of India (RBI) has approved Nabard's Warehouse Financing Scheme, which was created with a Rs 5,000-crore government corpus to provide direct loans to private as well as public sector companies bridge the gaps in the country's food storage facilities.

"Priority will be given for the projects proposed in Eastern and North Eastern states and all the other deficient states from the food grain production point of view," said S Padmanabhan, Nabard's regional director in Kolkata. The country as a whole has a gap of 47 million tonnes of storage facility.

Maharashtra has a deficit of 28.16 lakh tones, while West Bengal has a higher gap of 50 lakh tonnes. So, West Bengal needs more funding than Maharashtra.

"A large quantity of horticulture produce go waste in the eastern states due to the lack of warehousing facilities," Padmanabhan said. States, which are not self-reliant in food grain production, will also be treated favourably as these states perhaps need more storage facilities sooner than others to prevent food grains from going waste.

Nabard has begun financing private players planning to build cold storages under the new scheme. A couple of years ago, Nabard had started using the Rural Infrastructure Development Fund for providing refinance to commercial banks against loans to private entrepreneurs for building warehouses.

This created controversies as the RIDF was not meant for refinancing activity. This had prompted the RBI to step in and stop Nabard from this practice.

So, Nabard has designed a new scheme altogether for both public and private consumption to meet the growing demand for food storage capacity.


The Economic Times, 29 October, 2013, http://economictimes.indiatimes.com/news/economy/finance/nabard-to-ensure-fast-funds-to-states-battling-storage-crisis/articleshow/24855562.cms


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