Scheme to set up silos hits rent hurdle | lucknow | Hindustan Times
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Scheme to set up silos hits rent hurdle

Even as Uttar Pradesh faces a severe shortage of space for food grain storage, the ambitious scheme to set up modern silos in public-private partnership mode in nine districts suddenly finds itself in a limbo.

lucknow Updated: Aug 24, 2012 13:06 IST
Brajendra K Parashar

Even as Uttar Pradesh faces a severe shortage of space for food grain storage, the ambitious scheme to set up modern silos in public-private partnership mode in nine districts suddenly finds itself in a limbo.

This is the situation though the private entrepreneurs are showing a lot of interest to join hands with the government to create an additional three lakh metric tonnes of storage space by establishing the silos. But the government is not able to negotiate as the Food Corporation of India (FCI) is not fixing the rent that an agency will pay for storing food grain in a silo.

“We are waiting for the FCI to fix the storage charges before we invite bids from private parties to set up silos in the state which faces food grain shortage, especially this year because of the government having exceeded the wheat procurement targets for a bumper crop,” agriculture production commissioner Alok Ranjan said.

Against the total peak demand for 70 lakh metric tonnes, the existing storage capacity in the state is only 56.02 lakh metric tonnes. This leaves the state with an unmet capacity of 13.98 lakh metric tonnes.

The result: tonnes of food grain keeps lying in the open because of the storage shortage, often going waste due to vagaries of the weather.

In what appeared to be some relief, the centre, some time back, approved creation of storage capacity of two million tonnes in the country through construction of silos within the overall requirement of the FCI which was appointed the nodal agency for implementing the scheme through the PPP mode. In the state-wise distribution of the capacity to be built in silos, the FCI has allotted 3 lakh metric tonnes to Uttar Pradesh.

Sources said the centre was also considering to give 20 % of the project companies as the viability gap funds. “But the problem is that the FCI has not yet finalised the rental cost for silos in UP, delaying the project. However, Rs. 6.25 per quintal per month as a fixed cost and Rs. 2 per quintal per month as a variable cost are being proposed for the centre’s approval,” an official in the food depart disclosed.

Apart from looking forward to the silos as a relief, the state government is also considering construction of 100 traditional storages of 5,000 metric tonnes capacity each on the land available in 87 government mandis, sources said. “Development of 1,40,000 MT traditional storage capacity is being proposed under the Bundelkhand package and conversion of 1.40 lakh metric tonnes storage capacity from traditional facilities to silos is also under consideration under the same package,” they said.