NEGOTIABLE WAREHOUSE RECEIPT: AN EFFECTIVE INSTRUMENT FOR AGRI PLEDGE-FINANCING

Agricultural sector is one of the highest contributing sectors for the Gross domestic product (GDA) of India. When an agriculture contributes to the development of the economy, then agriculture needs a proper credit system. Negotiable warehouse receipt (NWR) plays a pivotal role in the agricultural pledge financing for the both farmers and traders. Basically, NWR serves as a collateral security for the loans against the agricultural produce and also, which will create an opportunity for farmers to get penetrative prices for their produce by storing commodities in warehouses’. Initially it was started with godown bills and physical ware house receipt authenticated by collateral managers. Later on, it has transformed to electronic form (Electronic Negotiable Warehouse Receipt- e-NWR) which will ensure the transparency and prevent from various frauds. According to National Electronic Limited (NERL), the actual warehouse receipt financing has amounted Rs.35,000 crores in the year 2023. And it also reveals that a large number of customers of NWR finance and users are traders than farmers. NWR exhibits the various advantages like collateral for the banks, creation of liquidity among farmers and creation of opportunities for getting remunerative price etc. The study is empirical in nature and considered the study period from 2011-12 to 2023-24 and focuses on various factors of NWR viz, salient features of NWR, present status of NWR among the stakeholders and challenges associated with the negotiable warehouse receipt. It found that NWR has a significant potential to enhance the agricultural ecosystem by strengthening the finance factor of the sector but it is facing some issues to reach the population.