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Export Credit to Processors/ Exporters Agri-Export Zones
As
you may be aware, Government of India has laid special emphasis on exports of
agricultural products in the Exim Policy announced in March 2001 and have
decided to set up Agri-Export Zones on the country to promote agri-exports.
2.
Government have proposed that Agri Export Oriented units (processing)
would be set up in Agri Export Zones and to promote such units, production and
processing have to be integrated. The producer has to enter into contract
farming with the farmers around the unit and has to ensure supply of quality
seeds, pesticides micro-nutrients and other material to the group of farmers
from whom the exporter would be purchasing their products as raw-material for
production of the final products for export. The Government have, therefore,
suggested that such export processing units may be provided packing credit under
the extant guidelines for the purpose of procuring and supplying inputs to the
farmers so that quality inputs are available to them which in turn will ensure
that only good quality crops are raised. The exporters will be able to purchase/
import such inputs in bulk, which will have the advantages of economies of
scale.
3.
In the circumstances, bank may treat the inputs supplied to farmers by
exporters as raw material for export and consider sanctioning the line of
credit/ export credit to processes/ exporters to covers the cost of such inputs
required by farmers to cultivate such crops to promote export of agri products.
The processor units would be able to effect bulk purchases of the inputs and
supply the same to the farmers as per a pre-determined arrangement.
4.
The banks will have to ensure that the exporters have made the required
arrangements with the farmers and overseas buyers in respect of crops to be
purchased and products to be exported respectively. The financing banks will
also appraise the projects in agri export zones and ensure that the tie-up
arrangements are feasible and projects would take off within a reasonable period
of time.
5.
The banks will have to monitor the end of funds, viz. distribution of the
inputs by the exporters to the farmers for raising the crops as per arrangement
made by the exporter/ main processor units.
6.
The banks will have to ensure that the final products are exported by the
processors/ exporters as per the terms and conditions of the sanction in order
to liquidate the pre-shipment credit as per extant instructions.
Please
acknowledge receipt.
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