Govt incentivises storage creation to cope with record procurement.
Scarcity of warehouses and increased foodgrain production has prompted the Centre to rope in private players to construct storage facilities under a seven year guarantee scheme. The government has already approved a capacity of 12.76 million tonnes under the programme.
Union Minister for Agriculture Sharad Pawar told Business Standard, “Reports from states are encouraging. The Food Corporation of India (FCI) will guarantee seven year charges.”
The Centre’s move was crucial following the acute storage of warehouses over the last few years with the Food Corporation of India procuring 20-25 million tonnes of wheat every year.
| CAPACITY ALLOTTED | |
| State | Storage capacity |
| Andhra Pradesh | 36,000 |
| Bihar | 300,000 |
| Chhattisgarh | 5,000 |
| Gujarat | 45,000 |
| Haryana | 3,880,000 |
| Himachal Pradesh | 142,550 |
| J&K | 361,690 |
| Jharkhand | 175,000 |
| Karnataka | 205,000 |
| Kerala | 15,000 |
| Maharashtra | 99,500 |
| Punjab | 7,125,000 |
| Tamil Nadu | 345,000 |
| Uttarakhand | 25,000 |
| West Bengal | 5,000 |
| Total | 12,764,740 |
| Figures in tonnes Source : Ministry of Consumers Affairs, Food & Public Distribution | |
This season, FCI has procured over 50 million tones of food grain — 25 million tonnes each of rice and wheat. While the existing wheat stock with FCI is 33.6 million tonnes, nearly 17 million tonnes are lying in the open and 12 million tonnes in Punjab due to unavailability of godowns.
The recent flood in Punjab and Haryana has affected the wheat stock lying in open. An FCI spokesperson said they are yet to make an assessment of the losses due to flood because the area is still submerged under flood waters. The quantum of damage would depend on the level of water because the foodgrain has been stored over two feet above the surface. The Centre has sent a team for assessing the impact of flood on such stocks.
When the FCI chairman met private warehouse owners, they assured him of building new warehouses provided they their services are used for at least seven years. Earlier, FCI was not in a position to provide such a guarantee because there was no certainty of such a huge procurement year after year.
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Anil K Choudhary, MD and CEO of National Bulk Handling Corporation (NBHC) said, “The move to incentivise storage creation has come at the right time. Foodgrain procurement has been increasing every year and with the Food Security Act in place it will only increase. India needs huge storage capacities that could now be possible.”
NBHC manages 473 warehouses with a two-million tonnes capacity. The ISO-accredited company offers storage, testing-grading, fumigation and pest management, warehouse audit and commodity valuation services.
The Centre has allocated Rs 149 crore, out of which Rs 125 crore would be released to FCI as equity for construction of storage godowns. The remaining Rs 24 crore would be released as Grants-in-Aid to the North East, Sikkim and Jammu & Kashmir for construction of godowns.
The Central Warehousing Corporation and State Warehousing Corporations can also construct warehouses at the approved locations but the FCI has to provide a guarantee for the same.