Why in the news Food Storage in India?

The Union Cabinet approve the constitution of an Inter-Ministerial Committee (IMC) for the facilitation of the “World’s Largest Grain Storage Plan in the Cooperative Sector”, which is being rolls out as a Pilot Project in different states/UTs of the country Food Storage in India.

About the Grain Storage Plan:

  • Aim: The plan focuses on empowering farmers, reducing wastage, and strengthening food security by creating godowns and agricultural infrastructure at the Primary Agricultural Credit Societies (PACS) level.
  • The plan has dual objectives. Firstly, it addresses the lack of agricultural storage infrastructure by establishing godowns at the PACS level. Additionally, it empowers PACS to engage in other roles:
    • Acting as procurement centres for State Agencies/ Food Corporation of India (FCI).
    • Functioning as Fair Price Shops (FPS).
    • Establishing custom hiring centres.
    • Creating common processing units for sorting, grading, and more.
  • Implementation: An Inter-Ministerial Committee (IMC) will be constitute under the Chairmanship of the Minister of Cooperation. In order to guarantee prompt, consistent, and expert execution of the plan, the Ministry of Cooperation would carry out a pilot project in a minimum of ten designate areas across several States.
  • Convergence of Scheme: The plan does not have a separate Budgetary allocation, it will be implements by the convergence of 8 schemes. These schemes –
    • Four schemes under Ministry of Agriculture & Farmers’ Welfare:
      • Agriculture Infrastructure Fund (AIF),
      • Agricultural Marketing Infrastructure Scheme (AMI),
      • Mission for Integrated Development of Horticulture (MIDH), and
      • Sub Mission on Agricultural Mechanisation (SMAM).
    • Two schemes of the Ministry of Food Processing Industries:
      • PM Formalisation of Micro Food Processing Enterprises Scheme (PMFME), and
      • PM Kisan Sampada Yojana (PMKSY).
    • Two schemes of the Ministry of Consumer Affairs, Food and Public Distribution:
      • allocation of food grains under the National Food Security Act, and
      • Procurement operations at Minimum Support Price.


  • The Pilot project being implements by National Cooperative Development Corporation (NCDC) with the support of NABARD, Food Corporation of India (FCI), Central Warehousing Corporation (CWC), NABARD Consultancy Services (NABCONS), National Buildings Construction Corporation (NBCC), etc. in different States/ UTs. Consultancy support also being extends to PACS through these agencies under the project.

Additional Information

●       Additional Information: Under these schemes, PACS can avail subsidies and interest subvention benefits for construction of godowns/storage facilities and setting up of other agri infrastructure. Further, NABARD is also extending financial support to PACS by refinancing them at highly subsidized rates of around 1 percent, after incorporating the benefits of 3% interest subvention under AIF scheme for projects up to Rs. 2 Crore.  Therefore, the plan aims to strengthen the economic condition of PACS by diversifying their business activities and giving them additional sources of revenue thus improving their financial sustainability.

Benefits of the pilot project to the farmers:

  • Farmers will be able to store their produce in the godown constructed at PACS and avail bridge finance for the next cycle of crop and sell the produce at a time of their choice, or sell their whole crop to the PACS at Minimum Support Price (MSP), which would enable them to avoid distress sale of crops.
  • They will be able to get various agri inputs and services at the Panchayat/ village level itself.
  • Through diversification of business, farmers will be able to get additional sources of income.
  • Through integration with the food supply management chain, farmers will be able to expand their market size and realize better value for their produce.
  • Creation of adequate food grain storage capacity at PACS level will help in reduction of post-harvest loss, thus enabling farmers to earn better prices.
  • In addition to the above, this Plan would help in ensuring food security at Panchayat/ village level across the country, thereby benefiting the consumers.
Food grain management in India:
  • Total Production: Each year, India produces over 3,100 Lakh tonnes of food grains.
  • Food grain procurement mechanism
    • Centralized Procurement System: Either the Food Corporation of India (FCI) directly purchases food grains from the Central Pool, or State Government agencies purchase the food grains and then transfer the stocks to FCI.
    • Decentralize Procurement Scheme: Introduce in 1997-98, food grains procure and distribute by the State Governments themselves.
  • Distribution of food grains
    • Food grain procurement, storage, transportation, and bulk distribution to State Governments are now under the purview of the Central Government through FCI.
    • The State Governments are in charge of carrying out the operational duties, which include distribution throughout the State, determining which households qualify, issuing Ration Cards, and overseeing the operation of Fair Price Shops (FPS), among other things.
Need for an effective food grain storage system:
  • Creating both forward and backward linkages: Farmers benefit from efficient storage systems, as do forward linkage systems like those in the food processing industry.
  • Lack of local storage systems: The household sector retains about 70% of the total production and large quantities of food grains waste due to improper storage at the farm level.
  • Improper storage management: A lot of the time, the inventory kept in warehouses kept longer than it should be, which exposes grains to pests, moisture, rodents, and birds
  • Lack of modern storage: The loading, unloading, and handling of food grains and other commodities are done by hand in around 80% of handling and warehousing facilities, which are not automated.
  • Gaps in the number of storage facilities: Grain silos and covered godowns with adequate storage capacities are lacking in the FCI. The country’s current godown facilities can store only up to 47 percent of the produce.
Government initiatives for increasing of grain storage capacity:
  • The Warehousing (Development and Regulation) Act, 2007: It made the Warehousing Receipt negotiable.
  • Private Entrepreneurs Guarantee (PEG) Scheme: To increase FCI’s storage capacity through PPP mode. PM Kisan Sampada Yojana: To develop cold storage facilities, warehouse facilities, and specialized packaging units, etc.
  • National Policy on Handling and Storage of Food Grains 2000: To modernise India’s food grain handling, storage, and transportation infrastructure while lowering storage and transit losses at the farm and commercial levels.
  • Gramin Bhandaran Yojana: Subsidy is provided for the renovation or building of rural godowns in order to increase the capacity for scientific storage.

Way forward:

  • Removing Covered and Plinth (CAP) storage: CAP should be gradually phased out with no grain stocks remaining in CAP for more than 3 months. Silo bag technology and conventional storage should be used instead.
  • Encouraging private involvement: Farmer’s Producer Organizations (FPOS) can invest in cold chain storage, storage warehouses, and other facilities by using financing facilities that the government can offer.
  • Using cutting-edge technology to food storage: Foodgrain management can benefit from the use of technologies like artificial intelligence, blockchain, and the Internet of Things. Real-time evaluation of grain quality through sensors can be utilized to adjust moisture and temperature control parameters.
  • Reducing loss at farmgate: Aggregation units (i.e. new pack-houses and pooling points) should be encouraged to be built at the village level with transportation connections.
  • Decentralisation: States that are performing well, like Madhya Pradesh, Haryana, Punjab, Andhra Pradesh, and Chhattisgarh, should be given more authority.
  • Drying, aeration, and temperature control: Temperature and moisture levels determine how long the grain need to be stored without deteriorating its quality. Consequently, modifying management and storage practices in line with these indicators.
  • Strengthening traditional methods: Traditional means of storage should be strengthened with modern inputs like Bamboo structures and Mud and earthen structures.

The Indian Government, recognizing the potential of cooperatives for economic growth and embodying the vision of “Sahakar-se-Samriddhi” (Prosperity through Cooperation), introduces the ‘World’s Largest Grain Storage Plan in Cooperative Sector.’ This decentralized storage system aims to reduce food grain wastage, enhance national food security, and provide farmers with alternatives to distress sales, leading to better prices. The initiative employs a ‘whole-of-Government’ strategy, strengthening Primary Agricultural Credit Societies (PACS) and diversifying their activities to increase farmers’ incomes.

Source: PIB