NAFED credit limit likely to be raised to Rs 3,500 crore

New Delhi, Feb 25. Agri-procurement agency NAFED's credit limit is likely to be doubled to Rs 3,500 crore for smooth procurement operations, a senior agriculture ministry official said today. At present, the National Agricultural Cooperative Marketing Federation (NAFED) credit limit is at Rs 1,631 crore and in addition Rs 150 crore guarantee has also been transfered to the federation, which was given to Central Warehousing Cooperation (CWC) for procurement operations. Under price support scheme (PSS) for the procurement of farm produce from the farmers, NAFED procures 16 commodities at minimum support price on behalf of the government. At present NAFED owes around Rs 2,000 crore to banks and has negative net worth of Rs 147 crore. "Agriculture Ministry has written a letter to Finance Ministry to raise the credit limit of the NAFED to Rs 3,500 crore, and it is likely to be get approved," Agriculture Secretary Ashish Bahuguna told reporters here. Bahuguna added that at present NAFED is procuring groundnut and for smoother procurement operations of mustard and chickpeas in coming days, the federation might require additional funds. NAFED had earlier also sought immediate release of Rs 25 crore from the Agriculture Ministry to meet the financial requirement of the voluntary retirement scheme (VRS) that it has offered to its 500-odd employees. Nafed has also put on the block its properties, including the head office, and was reported to be in talks with state- owned NBCC, the federation was also in talks with IFFCO for sale of its two fertiliser units. Nafed is running huge losses because of high interest costs. It had invested nearly Rs 4,000 crore in joint venture businesses for undertaking export-import operations through loans from commercial banks during 2003-06. Nafed owes debt to eight lenders including Punjab National Bank, Oriental Bank, South Indian Bank, Syndicate Bank and Central Bank. Nafed has a number of properties in cities such as Delhi, Kolkata, Mumbai, Chennai, Pune, Nashik and Jaipur.