 "NAFED may trim groundnut procurement due to poor financial health")
The beleaguered agri-procurement agency, National Agricultural Cooperative Marketing Federation (NAFED) might have to have to slow down its purchases of groundnut in states of Gujarat, Maharashtra, Rajasthan, Karnataka and Uttar Pradesh because of precaurious financial position.
"As of now we are somehow managing to run the operations, but if employee salaries start getting cut from next month, price support operations will suffer," a senior NAFED official said. Under Price Support Scheme, NAFED procures 16 commodities at minimum support price on behalf of the government. Apart from groundnut it purchased sunflower seed and urad this kharif season under price support scheme.
The Cooperative is facing a debt of around Rs 2,000 crore debt due to which it has decided to cut salaries of employees by 10 per cent and also offer voluntary retirement to bring down the running cost.
"The situation has come to such a pass that the cooperative is literally on the verge of closure. If our staff in local branches don't get their full salary then it will definitely impact procurement operations," the official added. Nafed has around 500 employees on its rolls. "If we link our salaries to income, then the cut should be somewhere around 50 per cent for all categories of employees," the official remarked.
Presently, NAFED owes around Rs 2,000 crore to banks and has negative net worth of Rs 147 crore.
The federation's debt has increased due to huge losses faced after alleged financial irregularities during 2003-06.
The mounting debts have been worrying NAFED as the Agriculture Ministry has rejected the Federation's two proposals for loan restructuring submitted in 2012.
In a meeting held on December 30, 2013, the board decided to cut 10 per cent of the salary from this month, the official said.
NAFED has 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, he added.
This move is aimed at bringing down the surplus work strength of the organisation, rendered due to halt of the commercial operations and continue with only the price support operations that it undertakes on behalf of the Centre.
Under PSS, NAFED procures 16 commodities at minimum support price on behalf of the government. It has already made market intervention for procurement of groundnut, sunflower seed and urad this kharif season, the official said.
"As of now we are somehow managing to run the operations, but if employee salaries start getting cut from next month, price support operations will suffer," a senior NAFED official said. Under Price Support Scheme, NAFED procures 16 commodities at minimum support price on behalf of the government. Apart from groundnut it purchased sunflower seed and urad this kharif season under price support scheme.
The Cooperative is facing a debt of around Rs 2,000 crore debt due to which it has decided to cut salaries of employees by 10 per cent and also offer voluntary retirement to bring down the running cost.
"The situation has come to such a pass that the cooperative is literally on the verge of closure. If our staff in local branches don't get their full salary then it will definitely impact procurement operations," the official added. Nafed has around 500 employees on its rolls. "If we link our salaries to income, then the cut should be somewhere around 50 per cent for all categories of employees," the official remarked.
Presently, NAFED owes around Rs 2,000 crore to banks and has negative net worth of Rs 147 crore.
The federation's debt has increased due to huge losses faced after alleged financial irregularities during 2003-06.
The mounting debts have been worrying NAFED as the Agriculture Ministry has rejected the Federation's two proposals for loan restructuring submitted in 2012.
In a meeting held on December 30, 2013, the board decided to cut 10 per cent of the salary from this month, the official said.
NAFED has 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, he added.
This move is aimed at bringing down the surplus work strength of the organisation, rendered due to halt of the commercial operations and continue with only the price support operations that it undertakes on behalf of the Centre.
Under PSS, NAFED procures 16 commodities at minimum support price on behalf of the government. It has already made market intervention for procurement of groundnut, sunflower seed and urad this kharif season, the official said.