Decline In Agricultural Commodities Stock

The loan against the agricultural collateral has declined in this financial year. From the CARE ratings, it is clear that warehousing companies have issued the same number of receipts as that of the previous fiscal year. There is a recent cut in the loan amount disbursed by the banks for agriculture. The Managing Director of National Collateral Management services said that it would take months for the banks to return to normalcy. Certain products like oilseeds, pulses, and several others experience profound realization. These products also trade below the MSP of the government. Farmers usually borrow from more number of banks for stacking their commodities. Warehouse owners issue separate NWR’s based on the number of lenders. The loan offered for storing the existing agricultural harvest has reduced as there are new crops that are yet to be harvested. The decline in the credit has not affected the number of bills issued by the warehouse owners.
The financing for stocking of agricultural commodities has decreased to 8 percent from 20 percent. The Chief Economist of CARE rating said that the warehouses are dealing with older stocks. Usually, crops are produced and stored for a year. There is no change in the average size of WR in spite of the decrease in the loan.

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