Faced with acute shortage of storage on record high purchases of wheat and rice, the central government-owned Food Corporation of India (FCI) has asked state governments for land to build modern silos within three months.
“Failing which, FCI would identify locations and buy land at market prices to build scientific silos in line with facilities in developed countries,” a senior FCI official said. It is readying a capital expenditure plan of Rs 800-1,000 crore to construct two million tonnes of silo capacity across the country.
In consuming centres, a silo with 50,000 tonnes of storage capacity would require a minimum of Rs 26 crore. In procuring states, the cost would be Rs 32-50 crore.
The Planning Commission has been entrusted with preparing the draft model concession agreement and a Request For Proposal, the first stage of asking bids. The decision on such an investment is in a preliminary stage and has to be finalised by a high-level board of directors. Once the board approves, the awarding of contracts, based on the requests received, would begin.
According to Anoop Kumar, executive director (storage), FCI, while all formalities are expected to be completed by the end of the current year, the actual construction of silos would begin only in 2013-14. By the end of 2015, however, a majority of these would be ready for use, with all scientific facilities.
FCI has 30.2 million tonnes of covered storage space under its control. Out of this, 13 mt is owned and 17.2 mt hired. Additionally, the agency handles 3.4 mt of cover and plinth capacity, of which 2.6 mt is owned and 0.75 mt hired. Due to a record procurement FCI is also using storage facilities of the Central Warehousing Corporation (CWC) and various state warehousing corporations.
Still, the agency requires massive storage facility to bridge the deficit. Currently, the government has about 64 mt of storage space, including 20-25 mt of a temporary set-up.
The building of silos will be part of the overall additional storage capacity of 15 mt. The food ministry ministry, along with FCI, is currently working on these plans, according to an official. In a recent meeting with FCI, Food Minister K V Thomas had asked FCI to finalise the location of two mt of silos with the help of state governments as soon as possible. He also asked it to persuade states to undertake scientific construction, especially in wheat procuring states. And, for special attention to the northeastern states with regard to movement of foodgrain and for construction of godowns.
While Punjab, Madhya Pradesh and Bihar are expected to see an addition of modern silo facilities of 400,000 tonnes, 350,000 tonnes and 200,000 tonnes, both Haryana and Uttar Pradesh might receive 300,000 tonnes each. West Bengal is expected to be the only state in the eastern region, other than Bihar, to receive investment on silos for a 200,000-tonne capacity. With the food minister’s intervention, northeastern states might see an additional 50,000 tonnes of modern silos under this programme.
FCI’s procurement of wheat hit a record 34 mt on May 31, as compared to 26 mt on the same date last year. With the intensified procurement, overall grain stocks in the central pool swelled to 82 mt.
