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Centre plans compulsory registration of warehouses
Currently, registration of any private warehouse or silo stocking farm produce is optional and these are not required to reveal their stocks. Therefore, there is much opacity about quantities of food stocks in the country.
In a key reform, the Union government is planning to make registration of all warehouses with a federal regulator mandatory by amending an existing law -- a move that will enable authorities to track food stocks and quantities of various farm commodities stored by traders and farmers across the country in real-time through an online database, a senior official said requesting anonymity.
Currently, registration of any private warehouse or silo stocking farm produce is optional and these are not required to reveal their stocks. Therefore, there is much opacity about quantities of food stocks in the country.
This often helps market players to gouge prices during periods of scarcity, and the government has no way of estimating how much quantities are locally available to take effective anti-inflation measures, according to the official cited above.
“The government is in the process of finalising an amendment to the Warehousing (Development and Regulation) Act 2007,” the official said.
Once an amendment is passed by Parliament, “any person desirous of commencing or carrying on the warehousing business issuing warehouse receipts shall make an application to the authority”, a food ministry note reviewed by HT says.
Along with this, registration of “all third-party warehouses throughout the country, will be undertaken in a phased manner” the note further states.
Once all warehouses are registered with a central regulator, they will automatically be linked online to a national database of stocks.
There are currently about 1900-odd warehouses in the country which have voluntarily registered with the federal warehouse regulator, but a vast majority of silos are not.
The proposed move will help sharpen the government’s food-management policies, experts said. The government frequently has to impose stock limits by invoking the Essential Commodities Act when prices of essential commodities spiral. Onion prices tend to spike every alternate year.
“For informed policymaking, the government should have accurate information of privately held stock of essential commodities. Currently, if prices of an item go up, the government simply has no way of knowing if black-marketing is taking place or there is a genuine shortage,” said PK Joshi, the secretary of National Academy of Agricultural Sciences and a food economist.
If stocks plunge due to any reason, such as heavy export, or there is a shortage due to crop failure, the government can then know how much to import, Joshi said.
Compulsory registration of warehouses will also benefit farmers by making stocks they choose to store “negotiable”. Registered warehouses can issue negotiable warehouse receipts to farmers who store their produce. These receipts carry a guarantee that the holder of the receipt will be delivered the quality and quantity mentioned in it.
Negotiable receipts can also be used by farmers as a recognized collateral to obtain loans from banks, the official said.
