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Vacate or renew fixed-term storage pact: Godown owners to Punjab government
The state’s entire warehouse capacity of 180 lakh tonnes is currently full,the government godowns are already storing 155 lakh tonnes of rice accumulated over the past three seasons
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Owners of foodgrain godowns in Punjab, with a combined storage capacity of 35 lakh tonnes, have asked the state food and civil supplies department to either vacate the godowns or renew their storage agreements with a fixed deadline.
The Private Entrepreneurs Godown (PEG) Association has sent a communication to the managing director of Punjab State Grains Procurement Corporation Limited (Pungrain), stating that their grain storage agreement expired in April. While renewal tenders were invited in May, the godown owners claim the process has stalled due to the department’s “red-tapism”.
As an interim arrangement, the godowns continued to be used on an actual utilisation basis for six months. However, this period expired in September and the godown owners have not agreed in principle to any previous or further extensions on this basis.
“Ironically, while the Punjab government is approaching the Centre for movement of surplus foodgrains to create storage space for the upcoming paddy harvest season, the continued uncertainty and unresolved issues faced by existing godown owners are discouraging further investment in storage infrastructure in Punjab,” said Dapinder Singh Brar, general secretary of the PEG association.
The state’s entire warehouse capacity of 180 lakh tonnes is currently full. The government godowns are already storing 155 lakh tonnes of rice accumulated over the past three seasons. An additional 10 lakh tonnes of paddy from the last season are still waiting to be milled, which is expected to add another 6 lakh tonnes of rice to the existing stockpile.
Godowns currently hold 116 lakh tonnes of wheat, while Punjab is holding at least 275 lakh tonnes of foodgrains. A severe space shortage has forced agencies to use rice mills and mandi yards for storage. Although the Centre has set a target to procure 180 lakh tonnes of paddy during the current kharif harvest, there is simply no space available to store the grain.
The association demanded that rent be paid based on the actual quantity of foodgrains stored, pointing out that even during these six months, payments have not been released according to the volume of grain kept in storage.
“Some districts in Punjab have reported no release of any rent, so any rent withheld for the past six-month period should also be released immediately,” said Brar.
The owners demanded that for any continued utilisation beyond September 2026, the new rent quoted in the tendering process should apply until a fresh hiring arrangement is finalised.
The communication has told the Pungrain management to communicate its decision on rehiring of godowns within 30 days. If the godown owners do not accept these terms, alternative storage arrangements may be made, allowing the owners to take back their godowns and arrange for their own utilisation.
PEG godowns began appearing across Punjab in 2012, initially drawing a monthly rent of ₹3.75 to ₹4.25 per quintal. Later, in 2023, these state-wide facilities were leased for a three-year term that has now ended.
Godown owners are seeking an increase in the rental charges because 15% of the total charges paid by entrepreneurs goes to the state food and civil supplies department as supervision fee.
Entrepreneurs who own these godowns believe that because the FCI pays the rent to the state government, any rate increase creates a win-win situation for both godown owners and the state department. There are at least 150 godown owners who constructed their facilities under the PEG scheme.
“The Food Corporation of India (FCI) has also rolled out its tenders. In case the state department and Pungrain fail to facilitate the entrepreneurs, we would like to shift to the FCI, as many godown owners have already shifted,” the association said.
A senior official from the state food and civil supplies department stated that godown owners have been assured inspection of their premises and payment of all overdue rent within a week. The official added that while the rehiring process takes time, it will be finalised soon.
3.8-lakh tonne paddy arrives in mandis
At least 3.83 lakh tonnes of paddy has arrived in the state mandis since the procurement began on October 1. On Sunday alone, 1.70 lakh tonnes arrived at state mandis. Following previous years’ trends, daily arrivals are expected to peak at up to 11 lakh tonnes within a week. Out of the total arrivals, 24,600 tonnes have been lifted so far.
