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Karnataka, which ranks seventh in the infrastructure development index in the country, is facing acute shortage of food grain storage capacity. The state requires an additional storage capacity of 2.18 million metric tons for PDS and Non-PDS commodities. The investment required to build this capacity is estimated at Rs 1,100 crore.
According to a warehousing gap assessment study conducted by National Bank for Agriculture and Rural Development (Nabard), the effective storage capacity for PDS commodities in Karnataka is only 1.05 million metric tons in the year 2012-13, about 54.3% of the total requirement of 1.94 million metric tons.
“We have conducted a scientific study on finding the storage gap in Karnataka. It is not a big difficulty to arrange funds for the state government. They have scope to borrow funds under the Rural Infrastructure Development Fund (RIDF) of Nabard and also contribute through budget every year,” G R Chintala, chief general manager, Nabard told Business Standard.
The state government can spend Rs 200 crore each year and borrow the rest of the money from Nabard and also involve the private sector in creating the capacity over the next four years. Nabard is ready to give as much funds the state government requires, he said.
The warehouses built in the country before the year 2000 were not constructed scientifically and are not capable of preventing rodents and fire accidents. There is a need to build the storage godowns keeping these issues in mind, Chintala said.
However, for Non-PDS commodities, the state had a surplus capacity for the storage of surplus crop produce in 2012-13. Based on the past trend, the study has projected that by the year ending 2016-17, the state requires an additional storage capacity of 2.18 million metric tons, of which 1.79 million tonnes for PDS commodities and 385,000 metric tons for Non-PDS commodities.
As storage and distribution of PDS commodities are critical factors for reducing poverty and inequality, the study suggested that the state government may take suitable initiatives for the construction of additional warehouses for the storage of PDS commodities. Keeping in view the wide reach of PACS (Primary Agriculture Cooperative Societies), it appears prudent to explore the possibility of expanding the storage capacity through the PACS, Nabard said in its study.
These societies may also explore the possibility of extending pledge loan to farmers. However, the resource base, local demand for storage and other requisite capabilities with PACS need to be examined before taking such a decision.
The godowns can be used for storage of PDS and non-PDS commodities, outreach of storage facility for marginal and small farmers will increase, provided PACS builds the godowns, the Nabard study said.
It also highlighted that market watch and the level of confidence of farmers will increase. Distress sale of the farmers will also decline, once the society starts giving pledge loan based on the stock in its godown, the study added.
Nabard conducted the study in eight districts such as Mysore, Shimoga, Davanagere, Dakshina Kannada, Bijapur, Raichur, Gulbarga and Bellary to understand different operational issues relating to warehouses and farmers' participation in storage of agricultural produce.
It is a matter of concern that between 2012-13 and 2016-17, while number of households is expected to increase at an annual rate of 1.79%, area under food grains is expected to decline at 0.52%. However, the surplus rice / wheat after meeting the consumption need, which was 1.11% of the total production in 2012-13, is expected to be 8.07% of the total production by the year ending 2016-17, the study said.
