 "Warehousing: Budget infusion to create additional 1 mt of capacity")
The allocation of Rs 5,000 crore in the Budget proposals of 2014-15 for warehousing is expected to create an additional storage capacity of one million tonnes for agri-commodities.
This would help in strengthening infrastructure for scientific storage of not only foodgrains but perishables too. National Bank for Agriculture and Rural Development (Nabard) would be the nodal agency for the project and funds would be made available as financial assistance.
Sources in Nabard confirmed that the additional storage creation would be done in food deficit areas. Investment would be available for the creation of cold storages and cold chains for fruits, vegetables and preservation of milk.
While the modalities for the break-up of funds are in the process of being finalised and might be formally announced by the end of July or first week of August, the investment would be equitably divided among all states of India.
“The proposals would be taken up on a first-come-first-serve basis but a cap would be fixed so that all regions get equal benefit,” a Nabard official said.
He informed that the private sector would also be earmarked a certain quantity of total allocation (between 15-20 per cent) to rope in state-of-the-art technology in storage and warehousing. State warehousing agencies are likely to play a key role. State warehousing corporations and agriculture marketing boards would execute the majority of projects and the requirements of Central Warehousing Corporation (CWC) would also be considered while earmarking funds. As the government is operating public distribution through Food Corporation of India (FCI), it might also be kept in the loop.
Sources in FCI said they had not gotten any directions so far on this issue. A senior official in CWC said that the corporation has a target to ramp up its storage capacity by 2,00,000 tonnes this year. This is lesser than last year’s capacity addition of 2,30,000 lakh tonnes as the utilisation has come down. There is a likelihood of lower agri production due to the poor monsoon so far this year. Hence, capacity addition would be less in the immediate future.
He added that CWC was a cash-rich organisation and had not tapped Nabard funds earlier. But in order to earn the benefit of the bank credit link loan subsidy (up to 25 per cent), it planned to raise funds this year through this route and earn interest income on its own funds. “This would make our projects commercially more viable,” he added.
The additional storage space created would be accredited from the Warehousing Development Authority and this would help farmers seek loans under post-harvest bank-lending for storage.
Poor post-harvest lending by banks affects farmers' willingness to deposit their produce in warehouses as banks mostly give crop loans.
This would create ample employment opportunities for farmers, said a banker.
This would help in strengthening infrastructure for scientific storage of not only foodgrains but perishables too. National Bank for Agriculture and Rural Development (Nabard) would be the nodal agency for the project and funds would be made available as financial assistance.
Sources in Nabard confirmed that the additional storage creation would be done in food deficit areas. Investment would be available for the creation of cold storages and cold chains for fruits, vegetables and preservation of milk.
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While the modalities for the break-up of funds are in the process of being finalised and might be formally announced by the end of July or first week of August, the investment would be equitably divided among all states of India.
“The proposals would be taken up on a first-come-first-serve basis but a cap would be fixed so that all regions get equal benefit,” a Nabard official said.
He informed that the private sector would also be earmarked a certain quantity of total allocation (between 15-20 per cent) to rope in state-of-the-art technology in storage and warehousing. State warehousing agencies are likely to play a key role. State warehousing corporations and agriculture marketing boards would execute the majority of projects and the requirements of Central Warehousing Corporation (CWC) would also be considered while earmarking funds. As the government is operating public distribution through Food Corporation of India (FCI), it might also be kept in the loop.
Sources in FCI said they had not gotten any directions so far on this issue. A senior official in CWC said that the corporation has a target to ramp up its storage capacity by 2,00,000 tonnes this year. This is lesser than last year’s capacity addition of 2,30,000 lakh tonnes as the utilisation has come down. There is a likelihood of lower agri production due to the poor monsoon so far this year. Hence, capacity addition would be less in the immediate future.
He added that CWC was a cash-rich organisation and had not tapped Nabard funds earlier. But in order to earn the benefit of the bank credit link loan subsidy (up to 25 per cent), it planned to raise funds this year through this route and earn interest income on its own funds. “This would make our projects commercially more viable,” he added.
The additional storage space created would be accredited from the Warehousing Development Authority and this would help farmers seek loans under post-harvest bank-lending for storage.
Poor post-harvest lending by banks affects farmers' willingness to deposit their produce in warehouses as banks mostly give crop loans.
This would create ample employment opportunities for farmers, said a banker.