Overdraft of Nu 350 mn to FCBL for Buyback Scheme

Over production of local farm produce should not be an issue: Agriculture Minister

Agriculture Minister Yeshey Penjor said FCBL is to implement the Buyback Scheme for farm produce and so the government has provided them with the overdraft (OD) facility. The OD from the bank is to ensure that the Buyback Scheme is secure. The interest on the OD will be borne by the agriculture and forests ministry along with the capital amount.

“If FCBL doesn’t make any profit from the Buyback Scheme, the interest will borne by the ministry. The overdraft is up to Nu 350 mn, and they will take a certain amount from there but they will not take all Nu 350 mn. They will use when they carry out the Buyback,” Lyonpo said.

Lyonpo claimed that reports about FCBL struggling to export certain items must have happened for just one or two days. He said it is not an issue since the ministry will solve it.

“There will be no issue for exporting as the government is already looking for other alternatives to export in other countries as well apart from India. The government is trying its best to address all these issues,” Lyonpo said.

Meanwhile, over production should not be an issue, said Lyonpo, as all the measures are put in place to address the over production issue.

“For anything that is coming in large scale which needs export attention, we have already supported FCBL with financial resources to look after the export part,” Lyonpo said, further adding, “The preference is with the farmer and producers. Wherever they can fetch a better price, they can sell it and if they are not able to manage, they can always report to the Department of Agriculture Marketing and Cooperatives who should be linking them with wherever there is a demand.”

Meanwhile, the government has issued an executive order to all the government institutions providing government feeding programs to prioritize on buying the local produce. Measures have also been put to curb import of fruits and vegetables.

“We have requested our vendors to control import and collect local produces wherever there is local production,” Lyonpo said.

Lyonpo added that Buyback does not mean the ministry will buy and sell the local produce since that is not the mandate. The ministry will only facilitate the policy measures through fiscal incentives and financial supports.

“Basically, the first and foremost thing, the government should not be doing business. So the government is giving overdraft facility to the FCBL and interest will be borne by the government. FCBL will buy and sell it. Through executive order we are linking the institution and farm producers, so whatever they buy, the budget will be all from the government,” Lyonpo added.

Lyonpo said that there has to be minimum quantity of vegetables to carry out the Buyback Scheme.

“For different items and different location, the price will differ. So the cost of production will also differ and on top 50 percent profit margin will be added. We will fix the price and then carry out Buyback Scheme. We cannot buy a kilo of vegetables so there has to be a minimum quantity,” said Lyonpo.

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