Cabinet approves Rs 1 lakh crore scheme to increase grain storage capacity in cooperative sector

In the next five years, the storage will expand to 2,150 lakh tonne

The Narendra Modi government on Wednesday unveiled an ambitious Rs 1 lakh crore five-year project to increase food grain storage capacity, which it believes will add more jobs, prevent distress sales by farmers and enhance food security.

The plan, which was approved at a meeting of the Union Cabinet chaired by Prime Minister Modi, is to add 700 lakh tonnes storage capacity – with every block having a 2,000-tonne facility – in the cooperative sector to take the total capacity from 1,450 lakh tonnes to 2,150 lakh tonnes in five years.

Dubbing it as the world’s largest food grain storage programme, Information and Broadcasting Minister Anurag Thakur told a press conference that the expenditure will run to around Rs one lakh crore.

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The project is aimed at reducing the damage to food grains due to lack of storage facilities, checking distress sale by farmers, reducing dependence on imports and creating employment opportunities in rural areas, Thakur said.

An increased number of storage godowns will also reduce transportation costs besides strengthening food security. At present, India can store only 47 per cent of around 3,100 lakh tonnes of foodgrains it produces annually.

Of the existing capacity, the Food Corporation of India has depots with a capacity of around 800 lakh metric tonnes while the rest is with state agencies and private players. The FCI had enhanced its storage capacity from six lakh metric tonnes in 1965.

Foodgrains stock accrued as non-issuable (damaged) in FCI in 2022-23 was 882 tonnes, according to the Department of Food and Public Distribution in Rajya Sabha in February this year.

The Cabinet has approved the constitution of an Inter Ministerial Committee for facilitation of the "world’s largest grain storage plan in the cooperative sector" by convergence of various schemes of the Ministry of Agriculture and Farmers Welfare, Ministry of Consumer Affairs, Food and Public Distribution, and Ministry of Food Processing Industries.

“In order to ensure time bound and uniform implementation of the plan in a professional manner, Ministry of Cooperation will implement a pilot project in at least 10 selected districts of different states and union territories...The pilot would provide valuable insights into the various regional requirements of the project, the learnings from which will be suitably incorporated for the country-wide implementation of the plan,” an official statement said.

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The IMC will be constituted under the Chairmanship of Cooperation Minister Amit Shah and will have Agriculture Minister Narender Singh Tomar, Consumer Affairs Minister Piyush Goyal, Food Processing Industries Minister Pashupati Kumar Paras and Secretaries concerned as members.

The IMC has been tasked to modify guidelines, implementation methodologies of the schemes of the respective Ministries as and when need arises, within the approved outlays and prescribed goals, for facilitation of the ‘World’s Largest Grain Storage Plan in Cooperative Sector’ by creation of infrastructure such as godowns, etc. for agriculture and Allied purposes, at selected ‘viable’ Primary Agricultural Credit Societies (PACS).

According to the “multi-pronged” plan, the programme aims to address not just the shortage of agricultural storage infrastructure in the country by facilitating establishment of godowns at the level of PACS, but would also enable PACS to undertake various other activities like functioning as procurement centres for state agencies, serving as fair price shops, and custom hiring centres, among others.