FCI to add 16 mn tonnes foodgrain storage capacity in 2 yrs

Food Corporation of India (FCI) today asserted that loss of foodgrain stored at its godowns is minimal and said the government would add 16 million tonnes of capacity within the next two years.

"It's not true to say that storage loss is as high as 30 per cent...Storage loss is less than 0.4 per cent for rice and none for wheat," FCI CMD Siraj Hussain said at a conference.

"Bulk wheat-producing states like Punjab and Haryana, in fact, gain from FCI storage facilities," he added.

Hussain said the country has a storage capacity of 42 million tonnes of foodgrain, and is in the process of adding another 16 million tonnes over the next two years taking the total to 58 million tonnes. 

"This much of storage capacity will be okay," he said.

The additional storage capacity would be built mostly in Punjab, Haryana and Maharashtra, he said while addressing Assocham's national conference here on "Warehousing in semi-urban & rural India--issue and solution".

To create additional storage capacity, the government has formulated a scheme for construction of godowns through private entrepreneurs.

Under the scheme, the FCI would now give a guarantee of 10 years for assured hiring. Out of the capacities sanctioned, tenders have been invited in 15 states and offers have been received for 10.3 million tonnes.

Hussain said it is expensive to build silos on a large scale for foodgrain storage, instead of warehouses, and the idea is not likely to take hold in the country any time soon.

A silo is a structure for storing bulk materials. Silos are more commonly used for bulk storage of grain, coal, cement, carbon black, woodchips, food products and sawdust.

Hussain said there is a target to procure 32 million tonne kharif paddy in the crop year 2010-11. But, rice procurement target of 10 million tonne in Andhra Pradesh might fall short due to loss of crop on account of heavy rains.  

Member Secretary, Planning Commission, Sudha Pillai said there was huge potential for the private players to build warehouses in tier II & III cities in the coming two years.