Nabard 'eyes' financing rural godowns in Punjab

The shortage of storage godowns and warehouses in Punjab has provided opportunities for the banks. According to the potential-linked plan prepared by the National Bank for Agriculture and Rural Developemnt (Nabard) for the year 2013-14, the credit requirement for storage godowns is estimated at Rs 1063 crore.

A senior Nabard official said there is a huge potential for bankers in this sector. According to estimates, the storage space available in the state is about 226 lakh tonne and there is a gap of about 25 lakh tonne. In addition, storage space is also in demand in the private sector. He further added that about 120 lakh tonne storage space is in the open, which needs to be covered. Also, there is scope for large scale storage space like silos, which need to be constructed in public and private sectors. He further mentioned that promotion of silos is relevant for viability of storage godowns in view of high land cost in the state.

It is worth mentioning that the annual production of paddy and wheat in the state is about 320 lakh tonne, while about 250 lakh tonne is procured by public agencies. Besides that, it also produces a sizeable amount of long and Basmati variety of paddy, which is out of minimum support price ambit. The market driven price for such varieties of paddy remains low at harvest and increases subsequently. Proper storage of these products may benefit the farmers.

According to estimates, approximately 60 per cent of the horticulture crops are consumed by the local population and 40 per cent of the produce is channelised in the regulated markets for the consumption of the urban population. Further, fruits, vegetables, flowers and processed products together contribute only 5.59 per cent of the total exports, mainly on account of inadequate post harvest storage facilities. Considering the perishable nature of horticulture produce on one hand and its potential in exports on the other, there is a need to create additional storage capacity and also to modernise the existing ones.

According to Nabard focus paper, there are few constraints in this sector like potato is almost the single commodity, which is being stored in the cold storage. Secondly small godowns constructed by farmers or individuals are not adhering to technical parameters.

Further, perturbed over storage space for food grains and horticulture produce in the state, Nabard, Punjab regional office, has proposed to the state government to utilise more funds under rural infrastructure development fund for setting up of warehouses and cold storage.