Agricultural Storage Infrastructure in India: An Overview

Abstract

India holds the second largest agricultural land in the world with approximately 179.9 million hectares under cultivation. The country has emerged as a major player in agriculture in the global scenario. Agriculture accounts for 14% of GDP and 11% of India's total exports. In FY 2013, total food grains production in India reached an all-time high of 263.3 million tonnes (MT).Rice and wheat production stood at 105.3 MT and 94.9 MT respectively. The government buys food grains from the farmers but does not have the space to store it. The food Corporation of India (FCI) has insufficient number of grain silos (modern storage facilities), and covered godowns with adequate storage capacities. Hence grains are stored in outdoors under CAP storage (Cover and Plinth) across the country. This makes grains prone to rodents, moisture, birds and pests. Unexpected rainstorms and weather makes matters worse.Every year tonnes of food grains go waste because of inadequate storage and infrastructure facilities. The wastage of fruits and vegetables is even higher than grains. Therefore, food logistic chain in India needs huge investment in providing proper storage facilities.Storage infrastructure is necessary for carrying over the agriculturalproduce from production periods to the rest of the year and toprevent distress sales. The warehousing capacity available in India, in public, cooperative and private sector is about 94.526 million MTs and as per Government's estimates, additional 35 million MTs warehousing capacity is required during the 12th Five Year Plan period for the storage of all major crops.In the current year budget announced by the finance Minister, an allocation of 5000 Cr INR has been made for Warehouse infrastructure Fund, keeping in view the urgent need for availability of scientific warehousing infrastructure.Recently, private sector participation in Agriculture warehousing has also increased, making this segment more competitive but lots more needs to be done. The objective of this paper is to summarize the issues and challenges facing theagricultural warehousing, especially in the food grains storage facilities sector and attempt to find possible solutions. The study is based on secondary data available on the current demand and supply scenario in the back drop of key Acts/Policies in the sector.