Financial Daily
from THE HINDU group of publications

Wednesday, April 04, 2001



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Govt grants Rs 100 cr to Nafed for copra losses

Our Bureau

NEW DELHI, April 3

THE Centre has approved an on-account payment of Rs 100 crore to be released `immediately' to the National Agriculture Cooperative Marketing Federation of India Ltd (NAFED) to meet losses incurred on account of copra procurement under the Price Support S cheme (PSS).

Nafed had procured over 1.7 lakh tonnes of milling copra at the minimum support price of Rs 3,250 per quintal declared for the 2000 season, as against open market prices of around Rs 2,150 per quintal (Kerala quotations). The losses incurred by Nafed on this count has been estimated in the region of Rs 150 crore, which the fund releases approved at Tuesday's meeting of the Cabinet Committee on Economic Affairs (CCEA) would partially meet.

Nafed is the Centre's nodal agency for procurement of oilseeds and pulses under its PSS, with losses, if any, incurred by the cooperative being fully reimbursed by the exchequer. Interestingly, the Union Budget has provided for only Rs 25 crore as `contr ibutions to price support/market intervention operations through Nafed' for 2001-02, as against Rs 26 crore for the previous fiscal (revised estimate).

CCEA also approved the provision of Government guarantee as and when required to banks to enable Nafed avail cash credit limits for procurement of oilseeds and pulses under the PSS ``for the current year as well as future operations''.

To meet its working capital requirement for procuring oilseeds, Nafed needs to avail cash credit from banks, for which 25 per cent margin money is required to be deposited with authorised banks. This margin money is given either in cash or governmental g uarantee in lieu of margin money.

MSP for raw jute: CCEA also approved the MSP for TD-5 Grade raw jute for 2001-02 at Rs 810 per quintal, as against Rs 785 per quintal for the previous season. The price has been fixed as per the recommendations of the Commission for Agricultural Costs an d Prices (CACP). Prices for other varieties and grades will be fixed in the light of normal price differentials, an official release stated.

``The increase in MSP is due to the increase in statutory minimum wages in West Bengal and Orissa. Similarly, the administered prices of fertilisers have also been increased in the 2000-01 Budget. There has also been a substantial increase in the price o f electricity for irrigation purposes,'' the release added.

The Jute Corporation of India (JCI) will continue to act as the nodal agency for undertaking price support operations.

Related links:
Nafed admits losses; says 1.7 lakh t copra procured

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