06. Credit facilities to Marketing Federation, NABARD

Credit Facilities to Marketing Federations

To support Producers Organizations in carrying out business activities, NABARD has set Producer Organization Development Fund (PODF) during 2011-12. The fund has supported Producers Organizations by extending credit+ facilities to take up production, aggregations, processing and/or marketing activities. Since, most of the producer organizations are at nascent stage, their focus is mainly on production and to some extent the aggregation. These organizations are unable to take advantages of value addition, market linkage due to various limitations like scale of operations, absence of professional management, fragmented supply chain, poor market linkage, lack of storage and marketing infrastructure. 

Recognizing the importance of scientific storage and marketing infrastructure in improving the efficiency in agribusiness and supply chain management, NABARD is involved in supporting implementation of various projects/activities such as PACS as MSCs wherein the PACS have been recognized as potential partners to act as spoke under Hub and spoke model for developing warehouses and cold chains, funding of storage infrastructure under RIDF to State Govt. and through their warehousing corporations and marketing federations, implementing credit linked subsidy schemes for storage and marketing infrastructure of GOI.

With the development of additional storage and marketing infrastructure by PACS, warehousing corporations and marketing federations/corporations/cooperatives, many State Marketing Federations/Corporations/Cooperatives have scaled up the marketing support to the farmers through PACS being primary aggregators at ground level. 

Till such time the producer organizations mature to handle the marketing activities efficiently on their own, they can be linked with the existing Marketing Federations/Corporations/Cooperatives by enrolling them as members/shareholders. The major limitation for expanding the marketing operations by these federations/corporations/Cooperatives is lack of timely and adequate credit support. 

In order to strengthen Marketing Federations/Corporations/Cooperatives in the marketing and other agriculture activities a separate line of credit, viz. ‘Credit Facilities to Federations/Corporations/Cooperatives’ has been made available for the Marketing Federations/Corporations/Cooperatives to promote the marketing of agriculture produce and other agriculture activities. 

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