Augmenting capacity

Godowns in the cooperative sector will benefit farmers

The Rs 1-trillion programme approved by the Union Cabinet to create the world’s largest decentralised grain storage capacity in the cooperative sector has implications that go beyond the safe upkeep of grain reserves for food security. The godowns to be built at the block level under this project are designed to serve as multifunctional centres run by the cooperatives, providing various utilitarian services to farmers. Apart from curtailing wastage of food grains and improving the economic health of the primary cooperative societies, these warehouses would also boost farm incomes. The cooperative societies would, for all practical purposes, function as grain procurement agencies, fair price shops, custom hiring centres for farm machinery, and common facilities for grading, sorting, assaying, and preliminary processing of the farm produce.

The benefits to farmers would include saving on transportation cost, as they would not have to take the produce to distant mandis, and an opportunity for realising better prices by keeping their wares in safe custody and selling them in the lean season at higher prices. The receipts issued by the warehouses for the stored stuff would serve as legally valid collateral for institutional loans. Farmers, therefore, would not have to sell their produce during the post-harvest peak marketing season when prices generally plummet to rock bottom. At the macro level, this move would help mitigate the paucity of grain storage space. At present, the available warehousing capacity, estimated at 145 million tonnes, can hold only about 47 per cent of the production. About 12 to 14 per cent of the produce gets wasted for want of proper preservation. This project would help augment the storage capacity by 70 million tonnes, increasing it to 215 million tonnes.

Interestingly, although this programme essentially fulfils the promise of setting up massive decentralised storage capacity made in the 2023-24 Budget speech, it would not require any specific budgetary allocation, or put any additional burden on the exchequer. It would actually be implemented by the Ministry of Cooperation by leveraging the funds available under various existing schemes of different ministries, notably the ministries of agriculture, food and public distribution, and food processing industries. The most noteworthy part — which also shows that the government means business in this case — is the tight timeframe specified for its execution. It stipulates setting up of a national-level coordination committee within one week of the Cabinet’s approval, formulation of guidelines within 15 days, and the actual commencement of work at the cooperative society level within 45 days. A pilot project is also mooted to be taken up in 10 selected districts to gather experience that might prove useful during the actual implementation across the country.

However, while all this is welcome, the fact also is that the need for meticulous post-harvest management, including safe upkeep, is much more critical for the perishable commodities like fruit and vegetables than the cereals, which have a relatively long shelf life. The post-harvest losses for these products are as high as 25 to 30 per cent. There is, therefore, a need for a similar action plan for better care of the high-value, but spoil-prone, horticultural produce. The two initiatives together can, potentially, prove to be a game-changer for the farm sector.