Nabard to extend Rs 5K-cr funding window to pvt grain players

As food security law becomes reality, there will be more pressure for adequate storage facilities for additional demand

With the food security law likely to put pressure on grain storage requirement, private bodies will also be able to avail of soft loans from the Rs 5,000-crore corpus for warehousing, managed by Nabard.

"We have not had many states accessing the facility created in the Budget. Therefore, we have now decided to allow private parties to avail of the loans," Nabard board member D B Gupta told PTI over phone.

As the food security law becomes a reality, there will be more pressure for adequate storage facilities for the additional demand, he said, adding that private sector can play an important role in meeting the expectations.

Gupta cited the findings of a report prepared earlier which talked about the need to create storage facilities for 35 million tonnes additional grain during the 12th Plan.

"On an average, an investment of Rs 4,000 is required for creating 1 tonne storage space," said Gupta, who also serves as the Principal Secretary in Rajasthan government's Agriculture Department.

Keeping in mind the Food Security Bill, Finance Minister P Chidambaram had in the FY'14 Budget made an allocation of Rs 5,000-crore, a corpus to be managed by Nabard to finance construction of warehouses, godowns, silos and cold storage units.

Initially the scheme was limited to the states or state-run entities.

The Cabinet this month decided to issue an ordinance to implement the Food Security Bill, which aims to give the nation's two-thirds population a right to 5 kg of foodgrain every month at highly subsidised rates of Rs 1-3 per kg.