World’s Largest Grain Storage Plan in the Cooperative Sector

Context: The Union Cabinet recently approved the constitution of an Inter-Ministerial Committee (IMC) to facilitate the world’s largest grain storage plan in the cooperative sector. The IMC is constituted under the Chairmanship of the Minister of Cooperation. It also consists of three other ministers i.e. the Minister of Agriculture and Farmers Welfare; the Minister of Consumer Affairs, Food and Public Distribution; and the Minister of Food Processing Industries, while the Secretaries will be members of the committee.

What is the world’s largest grain storage plan in the cooperative sector?

Agencies involved in grain management presently:
- Food Corporation of India (FCI)
- Central Warehouse Corporation
- Warehouse Development Regulatory Authority, Railways
- Civil supply departments of states
Under the new plan, the Ministry of Cooperation aims to set up a network of integrated grain storage facilities through Primary Agricultural Credit Societies (PACS) across the country. There are more than 1,00,000 PACS spread across the country with a huge member base of more than 13 crore farmers.

Why the need for such a facility?

Large Population: India, the most populous country in the world, accounts for 18 per cent (1.4 billion) of the global population (7.9 billion). However, it accounts for only 11 per cent (160 million hectare) of the arable land (1,380 million hectare) in the world.
Food Security Imperative: India also runs the world’s largest food programme under the National Food Security Act, 2013, that covers about 81 crore people.
Present Storage Capacity: India has a foodgrain storage capacity of 145 million metric tonnes (MMT) against the total food production of 311 MMT – which leaves a gap of 166 MMT.
Regional Variation: India has a storage capacity of 47 per cent of its total foodgrains production. At the regional level, only a few southern states have the storage capacity of 90 per cent and above. In northern states like Uttar Pradesh and Bihar, it is below 50 per cent.
Prevent Wastage: In the absence of sufficient storage facilities, foodgrains are sometimes stored in the open, which results in damage.
Other Countries: China has a storage capacity of 660 MMT, against the total foodgrain production of 615 MMT. USA, Brazil, Russia, Argentina, Ukraine, France, and Canada are among other countries with the capacity to store more food grains than they produce.
Therefore, to ensure food security of a billion plus population, a robust network of foodgrain storage facilities becomes essential.

About Integrated Facility

New storage plan is based on the hub and spoke model.
Of the 63,000 PACS across the country:
- 55,767 PACS will function as spoke and will have a grain storage capacity of 1,000 metric tonnes each
- Rest 7,233 PACS will function as hubs and will have a storage capacity of 2,000 metric tonnes each.
- Put together, all the 63,000 PACs will have a combined grain storage capacity of 70 million tonnes.
Area: Spread over 1 acre of land
Cost: The facility will be built at a cost Rs 2.25 crore.
Facilities available: The integrated modular PACS will have a custom hiring centre, a multi-purpose hall – procurement centres, primary processing units for cleaning and winnowing – a storage shed, and container storage and silos.
Funding: Of the Rs 2.25 crore, Rs 51 lakh will come as subsidy, while the remaining will come as margin money or loan. It is expected that the PACS will earn Rs 45 lakh in a year.
Equipment: PACS will purchase agricultural equipment like tillers, rotary tillers, disc harrows, harvesters, and tractors under various government schemes, such as Sub-Mission on Agricultural Mechanisation (SMAM) and Agriculture Infrastructure Fund (AIF). It will then offer this equipment to farmers on rent.
Modern Silos: The modern silos will have the facility of computerised real-time monitoring systems. These will be rented out to the FCI and other private agencies.

Budgetary Allocation

The plan does not have a separate allocation.
It will be implemented by the convergence of 8 schemes:

Ministry of Agriculture and Farmers Welfare

Agriculture Infrastructure Fund (AIF)
Agricultural Marketing Infrastructure Scheme (AMI)
Mission for Integrated Development of Horticulture (MIDH)
Sub Mission on Agricultural Mechanisation (SMAM)

Ministry of Food Processing Industries

Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME)
Pradhan Mantri Kisan Sampada Yojana (PMKSY)

Allocation of food grains under the National Food Security Act (NFSA).
Procurement operations at Minimum Support Price (MSP).

Benefits of the Plan

Addresses the shortage of storage infrastructure in the country by facilitating establishment of godowns at the level of PACS
Enables PACS to undertake other activities: Functioning as Procurement centres for State Agencies/ Food Corporation of India (FCI); Serving as Fair Price Shops (FPS); Setting up custom hiring centres; Setting up common processing units, including assaying, sorting, grading units for agricultural produce, etc.”
Brings down post-harvesting losses.
Reduces Logistical Cost: Brings down the food grain handling and transportation cost
Prevents Distress Sale: Farmers would have a choice to sell their produce depending on the market conditions, and not be forced into distress sale.

Conclusion

Therefore, to ensure food security of a billion plus population, a robust network of foodgrain storage facilities becomes essential.