The agriculture ministry and one of the country?s biggest agriculture cooperative, the National Agricultural Cooperative Marketing Federation (Nafed), are on a collision course over the ?sacking? of CV Ananda Bose, managing director of the federation on Friday.
The ministry on Monday termed the sacking of Bose and subsequent appointment of additional managing director of Nafed PK Sharma as interim MD as ?illegal? and has initiated administrative actions against the cooperative as well as the new MD.
Agriculture ministry, which deputes top officials of the country?s premier farmers? cooperative and implements its price support scheme through the cooperative has termed Friday?s board meeting as ?illegal?.
?Although Nafed being a cooperative does enjoy some kind of autonomy but the institution has to be accountable,? minister of state for agriculture KV Thomas told FE. He said that the ministry would adhere to all norms in dealing with Nafed as the federation set up back in 1950s is not in the best of financial health.
CV Ananda Bose who was on Friday sacked from his post of managing director by the Nafed board said that the action by the board was improper. ?Before removing, the board has to take the permission of the government,? Bose said.
The sudden ?removal? of CV Ananda Bose is one in the long list of controversies marring the cooperative in the recent past. Such has been the mismanagement in Nafed, that even the agriculture ministry is yet to agree to a request for a one time settlement of Nafed?s huge bank loan to the tune of Rs 1,600 crore, which has put the cooperative engaged in mainly in market intervention initiative in oilseeds, pulses and other agricultural commodities.
The genesis of the crisis originates way back 2004-06 when under a ?business-tie up? arrangement, Nafed had provided bank counter guarantee to 29 private companies to the tune of more than Rs 3,900 crore for undertaking exports in agricultural and non-agricultural items like iron ore, dry fruits etc.
But several of these companies defaulted on repayment which is currently estimated to be Rs 1,600 crore and the onus of interest payment now lies with Nafed. The interest liability to the tune of Rs 130 crore annually is wiping out even the nominal profit made by the federation, since last 5 years.
The government set up committee headed by retired Allahabad High Court Judge RR Mishra to look into scam has found that top officials with their ?notorious tie-ups? with some private businesses made Nafed extend counter guarantees on loans taken by private companies.
Nafed was setup with the object to promote co-operative marketing of agricultural produce for benefiting the farmers and the federation has more than 800 primary marketing and processing societies at the state level.