The regulator WDRA  has been directed to soon convene a meeting of all stakeholders comprising banks and farmers to address the bottlenecks. It has also been asked to create awareness among farmers to avail the benefit of Warehouse Receipts (WRs) to avoid distress sale.

WRs are documents issued by warehouses to depositors against the commodities deposited in the warehouses. These are negotiable instruments that can be used as collateral with banks for short term financing.       

About 520 warehouses are registered with WDRA as of now.
"Why public banks are not recognising non-negotiable warehouse receipts issued by WDRA-accredited private warehouse? Why are they asking for collateral managers? It means, banks do not recognise WDRA and its accredited warehouses," Food Minister Ram Vilas Paswan said at the 5th WDRA Foundation Day here.
Pulling up the WDRA for not taking adequate measures to convince public banks on this issue, the Minister directed the WDRA chief Dinesh Rai to call a meeting of all stakeholders to clear the hurdles.      

Currently, most of the southern farmers are benefiting from the commodity warehouse receipts. "There is a need to launch a country-wide awareness on this issue. We should also encourage north India farmers to take advantage of WRs and avoid distress sale of their produce," he added.   

Instead giving a regular speech at the event, the Minister made it an interactive session inviting stakeholders to openly air their grievances.      

Paswan also launched a website that gives details of warehouses with a capacity of over 100 tonnes.      

Both farmers and private warehouse owners said public sector were demanding "too much of paper work" and also a "collateral manager" that was coming in the way of credit to peasants.

Some farmers also said that godown rentals of state warehousing corporation in states like Uttar Pradesh is higher than the private ones.
An official from HDFC Bank said that it lends around 4,000 warehouses, of which 150 are accredited warehouses by WDRA. A few number of warehouses are accredited due to delay in the process by WDRA.

Speaking on the occasion, Food Secretary Sudhir Kumar said a regulator for warehouse development is necessary to ensure there is not repeat of Rs 5,600 crore scam at NSEL.      

The efficiency of warehouses should be improved to ensure both big and small farmers are able to benefit, he added.

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