A high-powered committee of the government has decided against a further increase in foodgrain warehousing capacity beyond the ongoing expansion, due to apprehension of under-utilisation.
The panel gave its report recently. It was constituted on directions from the Prime Minister’s Office (PMO), to prepare a plan for the additional grain storage requirement in the next 10 years, in view of the proposed Food Security Bill.
It also said the additional storage being constructed under the Private Entrepreneurs Guarantee (PEG) scheme would significantly improve the position and meet the requirement of Food Corporation of India (FCI) to a large extent. Hence, any more addition to the already planned extensions might lead to under-utilisation and extra financial burden for the government.
At present, FCI and state agencies have total storage capacity of around 71.5 million tonnes. In view of the rising procurement of grain, the government is getting an additional 18.1 mt erected under the PEG scheme, while another 1.55 mt is being added through modern silos.
While total storage capacity is expected to rise to a little 91 mt after the additions, there have been calls to re-assess it in view of the proposed food security law. According to a standing committee of Parliament, the requirement will increase if the central government decides to give more foodgrains under the proposed law. It said average annual foodgrain procurement (wheat and rice) in the past five years (2007-08 to 2011-12) was 60.2 mt.
The high-powered government panel comprised the joint secretary, storage, in the department of food; officials from FCI, the Central Warehousing Corporation, the department of agriculture and independent experts from the Federation of Indian Chambers of Commerce and Industry, National Collateral Management Ltd, National Spot Exchange Ltd and Warehousing Development Authority of India.