Rs 5,000 cr for agri storage

Panchayats can borrow at 6.5% to build storage facilities

Finance Minister P Chidambaram has earmarked Rs 5,000 crore to the National Bank for Agriculture and Rural Development (Nabard) to expand warehousing facilities. This fund will be used to finance the construction of warehouses, godowns, silos and cold chains to store agriculture produce, in the public and the private sectors.

"Setting up storage tanks, silos, godowns in rural sector will certainly boost agriculture sector in India,"said Dinesh Shahra, managing director, Ruchi Soya Industries.

B B Pattanaik, managing director of Central Warehousing Corp, also said the window opened for panchayats for creation of storage under the RIDF (Rural Infrastructure Development Fund) would provide some cushion for storage problems.

However, there are no other direct benefits to the storage sector. "The Budget did not spring too many surprises and this is the only silver lining," said Atul Chaturvedi, managing director, Adani Agro Logistics. A huge thrust is needed to switch over to vertical storage from flat storage, as land and labour cost is going through the roof. The budget does not say anything significant on the creation on storage and warehousing.

Panchayats can borrow funds at 6.5 per cent from banks to build storages on land available with them. A capacity creation of even 1,000 tonnes on panchayat land can be useful for local farmers as they can save on the transport cost.