Warehouse loans can help farmers avoid distress sales, but uptake remains low

Farmers who need money after harvesting may not have to sell their produce immediately. They can store their crops in warehouses and use the warehouse receipt to secure a bank loan, allowing them to access funds while waiting to sell their produce. At the India Today Kisan Tak Conclave 2026, Atul Chhura of Star Agri Warehousing and Collateral Management said banks can lend up to 80% of the value of the stored produce against warehouse receipts. The process, including farmer KYC, opening a loan account and disbursal, can be completed digitally within 24 hours. The facility can help farmers meet their immediate financial needs without having to sell their harvest at once. However, Chhura pointed out that traders and processors use this financing option more than farmers. The gap in adoption is significant because warehouse receipt financing could give farmers another way to access credit after harvest, rather than relying only on the immediate sale of their produce.