Cultivation of black gram under FSCs

Central Bank of Sri Lanka (CBSL) in association with the Department of Agriculture (DoA) cultivate black gram on over 3,500 hectares in Vavuniya during the current Maha season 2009/2010.

Under the program, 1,386 farmers in 27 villages in and around Chettikulam have already been selected by the DoA and arrangements have been made to purchase the entire black gram crop estimated around 3,500 mt under Forward Sales Contracts (FSCs). Several leading food processing industries in the country have been invited by the CBSL to purchase the crop at a reasonable price determined under the FSCs.

Accordingly, at a meeting conducted with farmer organizations/farmer group leaders in Vavuniya last week the companies have agreed to purchase the black gram at Rs. 75 per kg directly from the farmers and farmer organizations. They have entered into FSCs with farmers to purchase 3,400 mt of black gram at the forward price.

The FSC system ensures that farmers have a stable market for their crops at a reasonable price.

Farmers and buyers are eligible to borrow loans at concessionary terms from Participating Financial Institutions (PFIs) of the New Comprehensive Rural Credit Scheme (NCRCS) implemented by the CBSL under the FSC arrangement. Farmers are eligible to receive Rs. 36,000 per hectare for cultivation of black gram while buyers who have entered into FSCs with farmers could enjoy facilities upto Rs. 50 million per buyer to purchase and store the agricultural commodities.

To maintain the low interest rate under the scheme, the Government provides an interest subsidy at 8 percent per annum to the PFIs.