Linking Warehousing and Marketing Credit

The Warehousing Corporations Act came into operation on 18th March 1962. The Act defines the specific functions and the area of operations of Central and State Warehousing Corporations. It enlarged the list of the number of commodities meant for storage.

National Co-Operative Development and Warehousing

This was set up on 1st September 1956.

  • To provide funds to warehousing corporations and the State Governments for financing co-operative societies for the purchase of agricultural produce on behalf of the Central Government.
  • To advance loans and grants to State Governments for financing co-operative societies engaged in the marketing, processing or storage of agricultural produce, including contributions to the share capital of these institutions,
  • To subscribe to the share capital of the Central Warehousing Corporation and advance loans to State Warehousing Corporations and the Central Warehousing Corporation;
  • To plan and promote programmes through co-operative societies for the supply of inputs for the development of agriculture; and
  • To administer the National Warehousing Development Fund.

Central Warehousing Corporation

This Corporation was established as a statutory body in New Delhi on 2nd March 1957. The central Warehousing Corporation provides safe and reliable storage facilities for about 120 agricultural and industrial commodities.

Functions

  • To acquire and build godown and warehouses at suitable places in India;
  • To run warehouses for the storage of agricultural produce, seeds, fertilizers and notified commodities for individuals, co-operatives and other institutions;
  • To act as an agent of the government for the purchase, sale, storage and distribution of the above commodities;
  • To arrange facilities for the transport of above commodities;
  • To subscribe to the share capital of State Warehousing Corporation; and advance loans to State;
  • The Central Warehousing Corporation is running air-conditioned godowns at Calcutta, Bombay and Delhi, and provides cold storage facilities at Hyderabad. Special storage facilities have been provided by the Central Warehousing Corporation for the preservation of hygroscopic and fragile commodities.

State Warehousing Corporations

Separate warehousing corporations were also set up in different States of the Indian Union. The area of operation of the State Warehousing Corporations are centers of district importance. The total share capital of the State Warehousing Corporations is contributed equally by the concerned State Governments and the Central Warehousing Corporation. The warehouses (CWC and SWCs) work under the respective Warehousing Acts passed by the Central and State Governments.

Credit

Credit is that form of confidence reposed in a person, which enables him to obtain from another the temporary use of thing of value. Productive credit is that which is employed to create something materially valuable. Consumptive credit is the one, which is used for meeting the family needs and social obligations.

Agricultural Purpose

  • Short term credit

Credit needs in this case are for periods of less than 15 months for the purpose of cultivation or for meeting domestic expenses such short period loans are normally repaid after the harvest. The requirement is for purchase of seeds, manures, fodder, payment of wages, revenue, expenses on irrigation, hire charges of equipment's.

  • Medium term credit

Finances are required for medium periods varying between 15 months and 5 years. The funds are required for purchase of cattle, making some improvements on land, buying implements repairs to machinery, farm house, laying orchards etc.

  • Long term credit

These are needed for purchase and reclamation of land, construction of wells, repay old debts, permanent improvements on land, purchase of costly agricultural machinery viz. tractor, development of irrigation sources etc. these loans are for long period of more than 5 years.

  • Non farm business purposes

In this case the short term credit is taken for repair of production equipments, transport equipments and furniture etc. and long term loan; is required for purchase, construction, addition and repair to building for non farm business, purchase of transport equipment and other capital expenditure on non farm business.

  • Family expenditure

Here short-term loans are required for purchase, construction, addition and repair to building for non farm business, domestic utensils, clothings, medical, grossery educational and other family expenses. Long term loans are taken for purchase, construction and repairs of residential houses and expenditure on marriage, other ceremonies, litigations etc.

  • Other purposes

These include purchase of buildings, ornaments, shares and debentures of companies, co-operatives, payment of old debts and so on.

  • Chattel and collacteral credit

The credit is given on the security of farmers livestock, crops or warehouse receipts, while the letter on the security of other kinds of movable property such as shares, bonds, government securities and insurance policies.

  • Personal credit

Which is advanced on the promissory or personal notes of the farmer with or without security of a third party such type of credit is based on the security of character of the borrower and take into account the honesty and hard working nature of the borrower, his craning capacity and past record, repaying capacity of the borrower.


Agri-
Knowledge
(Agricultural Marketing)