Vijayawada: The state government accorded permission to Andhra Pradesh State Cooperative Marketing Federation Limited (AP Markfed) to avail a fresh working capital loan of Rs 1,800 crore from the National Cooperative Development Corporation (NCDC) with a government guarantee, aimed at strengthening paddy procurement and public distribution operations during the rabi 2025-26 season.
Agriculture and cooperation special chief secretary Budithi Rajasekhar issued GO Ms No 24 to this effect on Monday. The loan will be extended as an inter-corporate transfer to the AP State Civil Supplies Corporation Limited (APSCSCL), Vijayawada, in addition to the Rs 12,053 crore already mobilised for procurement and distribution activities.
The government said the funds would be utilised to meet working capital requirements for paddy procurement under the decentralised procurement (DCP) system and to ensure uninterrupted supply through the public distribution system (PDS). The order follows earlier decisions appointing AP Markfed as an additional agency to support procurement operations across all districts, without incurring additional costs.
The government has laid down specific conditions for the loan, including that the guarantee will cover both principal and interest for the entire tenure. AP Markfed has been directed to negotiate competitive interest rates aligned with MCLR norms and ensure zero foreclosure charges.
Further, APSCSCL will be responsible for monthly interest payments routed through AP Markfed, while repayment of the principal will be as per NCDC terms. A 2 per cent guarantee commission on the loan amount will also be paid by APSCSCL.
The finance department has concurred with the proposal, and officials have been instructed to take necessary steps for implementation. The move is expected to enhance procurement efficiency and ensure timely payments to farmers across the state, thereby strengthening the overall agricultural support system.