Farmers can now take loans against goods in warehouses

Farmers now can secure loans from banks against goods in government warehouses – up to 80% of the value of their deposited crops. 

It helps them manage immediate financial needs without selling their produce at a loss.

Farmers are usually compelled to sell their paddy and other seasonal grains immediately after harvest due to the pressure of repaying loans for soil cultivation, irrigation, and fertiliser. This rush to sell during peak harvesting seasons results in a surplus supply, driving prices down and forcing farmers to sell at a loss. 

To alleviate the financial pressures on farmers and help them get fair prices for their produce, the Department of Agricultural Marketing has introduced an initiative under the “Grain Warehouse Modernisation and Digitalisation Project”.

This information was shared at a workshop held at the Krishibid Institution in the capital today.

In the keynote address, Project Director Fatema Wadud said the government is allowing farmers to store their produce in 81 modernised warehouses across 56 upazilas in 27 districts and avail loans against their produce.

They can secure loans from banks, such as Sonali, Rupali, Agrani, and Janata banks, as well as the Rajshahi Agricultural Development Bank and Bangladesh Agricultural Bank.

Sources said the project started in October 2023 will continue till June 2026. Under it, the modernisation of the warehouses is going on.

“The project’s benefits extend beyond immediate financial relief. By storing grain in these warehouses, farmers can wait for better market conditions to sell their produce at more favourable prices, thus enhancing their income potential,” Fatema Wadud said. 

According to the Project Director, since 2019, a total of 18,189 farmers have stored 20,377 tonnes of grain and received loans totaling over Tk24.80 crore. On average, 4,116 farmer families receive loans amounting to Tk4.89 crore annually against 4,003 tonnes of grain deposits.

“Farmers need cash after harvesting the grains and are forced to sell the grain to manage their immediate financial needs. Taking loans from banks against grain deposits will meet their needs,” she said. 

Additionally, this approach strengthens local food storage and security, contributing to overall market stability, Fatema Wadud further said. 

“Besides, the marketing capacity of the farmers will increase and they will be able to take advantage of the price by selling the grains at a convenient time in the market,” she added. 

Director General of the Department of Agricultural Marketing Masood Karim emphasised that the project will increase the storage capacity to 17,710 tonnes, ensuring that every warehouse and its associated farmers can access loans up to Tk22 crore. 

The modernisation includes both renovations and new constructions as needed, promoting agricultural entrepreneurship and commercialisation.