Plans of expanding foodgrain storage capacity to suffice: panel

Reccommends use of silo bags to meet temporary storage needs during harvest season

 

A high-powered committee of the government has decided against further increasing India’s foodgrains warehousing capacity beyond the ongoing expansions due to fear of underutilization of storage capacity.

The Committee, constituted under the directions of the Prime Minister’s Office (PMO), to prepare a plan for additional grain storage requirement for the country in the next 10 years in view of the proposed Food Security Bill submitted its report recently.

The panel, after assessing the current and future foodgrains production and procurement scenario, concluded that government should use new technologies like silo bags (low cost, air-tight, giant sized polythene bags which can store upto 200 tonnes of foodgrains) to meet temporary storage needs during harvest season.

The Committee also said the additional storage currently being constructed by the government under the Private Entrepreneurs Guarantee (PEG) scheme would significantly improve the position of storage and meet the requirement of FCI to a large extent and hence any more additions to the already planned extensions might lead to under-utilization and lead to extra financial burden for the government.

“Any over-creation of covered warehousing capacity might lead to underutilization in future which would much more financial burden on the government,” the Committee said.

At present, the Food Corporation of India (FCI) and state agencies have a total storage capacity of around 71.5 million tonnes. However, in view of rising procurement of grains the government is constructing an additional storage capacity of almost 18.1 million tonnes under the PEG scheme, while another 1.55 million tonnes is being added through modern silos.

But, though the total foodgrains storage capacity in the country is expected to rise to over 91 million tonnes after the new additions, there have been calls to re-assess it further in view of the proposed ‘Food Security Act’.

As per current estimates, India’s annual foodgrains procurement is estimated to remain almost flat even after the Act is implemented, provided the per head foodgrains entitlement is lowered to Rs 5 per month from the earlier suggested Rs 7 per month.

However, according to a standing Committee of Parliament, the requirement will increase if the central government decides to give more foodgrains under the proposed law.

The committee expects foodgrains requirement to be around 60-61 million tonnes if the Bill is implemented with lower entitlements. It said that India's average foodgrain procurement (wheat and rice) in the last five years (2007-08 to 2011-12) has been around 60.24 million tonnes.

The high-powered Committee comprised joint secretary storage in the department of food, officials from the Food Corporation of India, Central Warehousing Corporation, department of agriculture and independent experts from FICCI, National Collateral Management Ltd, National Spot Exchange Ltd, Warehousing Development Authority of India.