National Agriculture Co-operative Marketing Federation (Nafed) today reported a net loss of Rs 50.05 crore for 2009-10 fiscal, due to huge interest payment.
The turnover, however, rose by 26 per cent to Rs 6,373.31 crore in the last fiscal, against Rs 5,065.04 crore in 2008-09.
"We have posted a gross profit of Rs 83.91 crore. Still, we suffered a net loss of over Rs 50 crore as our interest liability to the banks from whom the funds were borrowed for undertaking tie-up business is mounting day by day," Nafed Chairman Bijender Singh said at the 53rd annual general meeting.
Singh said the company paid Rs 135 crore in 2009-10 as interest to banks for the loan taken by it to undertake tie-up business with private parties in non-agricultural items.
Nafed had provided financial support of Rs 3,945 crore to 62 private parties during 2003-2006. Out of that, it recovered Rs 2,874 crore and 29 firms turned defaulters resulting in a loss of Rs 1,600 crore (including interest) as of May 2010.
The Chairman urged the government to bail-out Nafed by providing a financial package of interest-free Rs 1,200 crore.
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Singh assured that "Nafed would do its best to come up to the expectations of the government and utilise the financial support, being considered by them, judiciously".
The Chairman said that Board has agreed to offer 51 per cent equity to the government in lieu of financial support.
The board has also accepted other terms and conditions like deletion of provision relating to undertaking business in non-agri and non-traditional items.
"I am confident that with the support of the government and by increasing its business activities and performing them in a more proficient way, Nafed shall regain its image and better serve the farming community," Singh said.