Every year in India, tonnes of grains, pulses, oilseeds, fruits and vegetables goes waste because of improper storage facilities. The Warehouse Development and Regulatory Authority (WDRA) was formed last year to encourage scientific warehousing in the country. In an interview with Sanjeeb Mukherjee, WDRA Chairman Dinesh Rai said over a period of time, negotiable warehouse receipts would become a prime tool of trade, beneficial for all stakeholders, be it godown owners, farmers or consumers. Edited excerpts:
How does WDRA function and how can warehouses get accredition so they can issue negotiable receipts?
The WDRA was formed in October 2010 as part of the Warehousing (Development & Regulation) Act of 2007 to regulate warehouses and also usher in a system of negotiable warehouse receipts (NWRs) in the country.
Whenever any warehouse feels the need for issuing NWRs either because of demand from its consumers or due to competition, it approaches the WDRA for accreditation. The authority then sends a team of inspectors who judge the warehouse on various parameters like whether the construction has been according to norms, does it have trained staff, is it equipped with modern pest control and fumigation facilities, its net worth, security, fire-fighting and goods weighing facilities.
If our team is satisfied with the conditions, then WDRA issues a booklet containing the NWR. The warehouse then issues these receipts to customers (farmers and people who have stored their produce in the godowns) in place of the normal receipt. As these receipts are recognised by the government, banks can easily grant loans against them.
So, how does a farmer benefit from NWR?
As of now, farmers in India have very little power to profitably hold onto his produce. He has to either sell it in the market at the prevailing rate and incur loss or earn profit or store it in decrepit warehouses. Now, after this Act and the authority came into being, the farmer gets an officially recognised receipt against which he can take loan from bank for further farming activities or alternatively selling his produce to a third person by endorsing the receipt, without even taking physical possession.
How does a warehouse stand to gain by getting accredited from WDRA for issuing negotiable receipts?
Well, it gets more business as perception of clients’ change towards such warehouses and accreditation from a credible agency. Slowly, banks will also show interest in lending to such warehouses as they have been recognised by a central level authority.
Both private warehouses and those which are under the control of the central or state government can apply for accreditation to issue negotiable receipts. The negotiable receipt issued by us has been designed in consultation with the Indian Banks Association (IBA).
It has features like name, quantity of the produce, warehouse registration number, description of goods, shelf-life of the produce, etc. It also has in-built security features to ensure it is not misused and we have a control over the said warehouse.
Which agencies inspect warehouses?
At present, we have eight agencies who have been entrusted with the task of conducting inspection, of which four are government agencies like National Institute of Agricultural Management, Indian Grain Management and Research Institute and private firms like Bureau of Veritas Certification and American Quality Assessors.
So, how has been the response?
Since we started operation in October 2010, we have received applications from 300 warehouses across the country and accreditation has been granted on 51 applications. Once an application has been rejected; warehouses can re-apply after fulfilling the necessary conditions.
How much time does it take for getting accreditation certificate for a warehouse?
From the time of putting in an application, it normally takes around two months for granting accreditation. Initially, this accreditation is given for three years, but we do reserve the right of yearly inspection of the facilities and also surprise checks as and when we please. The warehouse can get part of its facility accredited at a time.
How will you make WDRA more professional?
For the time being, we are allowed to grant receipts against 40 goods recognised by the government, which include rice, wheat, barley, mustard seeds, tamarind seeds, coffee beans, etc. Slowly, the number of items will be raised. Also, electronic issue of warehouse receipts is being planned.
