Financing Groundnut Processing and Marketing

Abstract

Since the supply of groundnut could not keep pace with the rising demand, it received considerable attention in the credit control operations of RBI. Both groundnut and groundnut oil have been under the provisions of Selective Credit Control and the lending norms were either tightened or relaxed depending upon the prevailing market conditions. Groundnut from the farm level reaches the consumers through several intermediaries who perform functions ranging from assembling of groundnut seeds to wholesaling of groundnut oil. This paper assesses the working capital requirement at different stages, viz. seed trade, processing, and trading of oil, and examines the rationale for continuing the commodity under the provisions of Selective Credit Control.