1. The farmers normally sell the produce immediately after harvest because there is no arrangement for storage and farmer has immediate need of money for his livelihood. They often need to settle loans taken from money lenders and banks for cultivation or consumption needs during lean period and to make payments for inputs taken on credit. However, the prices usually tend to be low during harvest season and increase later. Because of this, there is a glut of the produce in the market after harvest and the farmers have to sell under distress. The realization of the produce is very low as compared to the prices which could be realized after 4-5 months from the harvest, i.e. during the lean season. The problem can be addressed by providing scientific storage and interim financial credit to the farmer against the stored agricultural produce.
2. Since 1990, Maharashtra State Agricultural Marketing Board (MSAMB) has successfully supported a Pledge Loan Scheme operated by selected APMCs. Under this scheme, farmers obtain loans to the extent of 50-75% of the value of the commodity they store in APMC godowns. These loans are provided by APMC using funds provided by MSAMB. The APMCs participating in this program have a 100% repayment rate on loans made under this program4. However, limited funds available with MSAMB for this activity have limited the number of farmers who are able to benefit from this service provided by APMC. Hence, the project proposes to enhance access to this service by facilitating the expansion of the warehouse receipt financing for farmers through selected godowns of Maharashtra State Warehousing Corporation (MSWC). The scope would increase further with the Warehousing Act of 2007 which allows private godowns getting accredited for warehouse receipt through financial institutions.
3. This sub-component aims to improve access to price risk management services for farmers. Availability of finance against