CGS-NPF Aims to Empower Farmers and Reduce Distress Sales through e-NWR Based Pledge Financing

On December 16, 2024, India launched the Credit Guarantee Scheme (CGS-NPF) with a ₹1,000-crore corpus to support post-harvest financing for farmers. The initiative aims to reduce distress sales and enhance credit access for small and marginal farmers using electronic negotiable warehouse receipts.

AB News Desk, New Delhi: On December 16, 2024, the Government of India unveiled the Credit Guarantee Scheme for e-NWR Based Pledge Financing (CGS-NPF), allocating a substantial ₹1,000 crore to improve post-harvest financing for farmers. This innovative scheme allows farmers to access credit by pledging their produce stored in accredited warehouses managed by the Warehousing Development and Regulatory Authority (WDRA), backed by electronic negotiable warehouse receipts (e-NWRs).

Designed to reduce distress sales, the CGS-NPF addresses significant gaps in agricultural financing while promoting warehouse registration closer to farmland. Union Minister of Consumer Affairs, Food and Public Distribution, Pralhad Joshi, has encouraged the WDRA to widen its reach for more warehouse accreditations. The scheme largely supports small and marginal farmers, including women, Scheduled Castes (SC), Scheduled Tribes (ST), and Divyangjan (PwD), promoting inclusivity with minimal guarantee fees. It aligns with the government’s ongoing efforts to strengthen Indian agriculture, vital to the nation’s economy, contributing significantly to GVA and employing nearly half of the population. By enhancing access to institutional credit, the CGS-NPF is a pivotal step towards empowering farmers and advancing the mission of Aatmanirbhar Bharat.