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Scheme to boost grain storage capacity cleared

Jun 01, 2023 12:22 AM IST

The scheme’s overall goal will be to augment grain storage capacity of the country from a current 145 million tonne to 215 million tonnes

New Delhi The Union Cabinet chaired by Prime Minister Narendra Modi on Wednesday approved a new grain storage programme worth 1 lakh crore that will converge several existing infrastructure schemes, Union minister for information and broadcasting Anurag Thakur said, briefing reporters.

A warehousing network linked to the negotiable warehouse receipt system will allow farmers to use stored commodities as collateral for loans (File photo)
A warehousing network linked to the negotiable warehouse receipt system will allow farmers to use stored commodities as collateral for loans (File photo)

The programme to build the “world’s largest grain storage plan” will be overseen by an empowered interministerial panel consisting of the Union ministers of agriculture, food and consumer affairs as well as the minister of food processing industries, Thakur said.

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The scheme’s overall goal will be to augment grain storage capacity of the country from a current 145 million tonne to 215 million tonnes, the minister said.

The empowered interministerial panel will have powers to modify guidelines and implementation methodologies of the existing schemes, according to a statement from the cooperation ministry.

“The plan is to build storage facilities in every block of the country which will have a capacity of between 500-2000 tonne. Initially, there will be a pilot in 10 districts of the country, after which the programme will be scaled up,” an official said, requesting anonymity.

The programme will converge existing infrastructure schemes for which funds have been already allocated, such as the Agriculture Infrastructure Fund, Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme and the Pradhan Mantri Kisan Sampada Yojana. These schemes are meant to create farm and food processing infrastructure in the country.

“The grain storage plan will address the shortage of grain storage facilities, create decentralised of storage capacity, prevent food wastage and generate employment across the country,” Thakur said.

The plan to expand the country’s food-storage capacity will ramp up government spending on infrastructure. Higher capital expenditure by the government is expected to push growth and aid job creation.

Under the scheme, godowns and silos will be managed by primary agricultural credit societies or PACS. The Amit Shah-headed cooperation ministry has launched a programme to digitise 63,000 primary cooperatives in the country and amended relevant laws to enable them to diversify their business portfolios, a move aimed at generating rural employment.

PACS are village or district-level last-mile institutions that deliver agricultural credit to millions of farmers in the country. The Cabinet Committee on Economic Affairs (CCEA) in June 2021 approved the computerization of PACS with a budgetary outlay of 2,516 crore.

According to the statement, the scheme will reduce food transportation costs to procurement centres of the Food Corporation of India (FCI) and warehouses to fair price shops.

“A warehousing network linked to the negotiable warehouse receipt system will allow farmers to use stored commodities as collateral for loans. This will create working capital for farmers,” said Abhishek Agrawal of Comtrade, a commody trading firm.

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  • ABOUT THE AUTHOR
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    Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.

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