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The bane of unprofessional warehouses

There is an urgent need to develop a strong warehousing system equipped with modern and scientific storage facilities

Dilip Kumar Jha  |  Mumbai 

Around 30% of India's harvest gets wasted because it is unprofessionally managed in the warehouse, a joint study conducted by The Associated Chambersof Commerce and Industry of India (Assocham) and Yes Bank, said.Owing to extreme dearthof about 35 million tonnes (MT) warehousing capacity together with massive foodgrain storage shortfall of about eight MT, about 30-40% food grain isstored in an unprofessional manner during the peak marketing season in India.Davor Pisk, Chief Operating Officer of global agrochemical company Syngenta International AG, had on Monday, said that around 900,000 people go to bed hungry in India every day.

India's production was estimated at 259.29 million tonnes in 2011-12but, declined to 255.36 million tonnes in 2012-13. Now, Ram Kaundinya, chairmanof biotech led enterprise ABLE-AG forecasts India's production toset a new record at 301 million tonnes by 2020. Sanjay Kaul, managing director of National Collateral Management Services (NCMSL) estimated India's foodgrainswastage at Rs 45,000 crore annually due to unprofessional management.

"In India, around 20-30% of total food grain harvest is wasted due to inadequate storage capacity,regional imbalance in warehouses, lack of adequate scientific storage andinefficient logistic management," said D S Rawat, secretary general of while releasing the study titled 'Agri-Infrastructure in India: The Value Chain Perspective.

There is an urgent need to develop a strong warehousing system equipped with modern and scientific storage facilities like warehouses, silos, silo bags and others as the grainstorage capacity in India has not been keeping pace with the marketable surplus."Each grain bag is handled at least six times before it is finally opened for processing which leads to higher storage and transportation charges and also adds to wastage of food grain during transit and handling," said Rawat.

"Much needs to be done to built additional storage capacity, renovate existing warehouses and implement arobust Negotiable Receipt (NWR) system to make available more funds to farm producers and simultaneously provide security to the lenders."Growing at a compoundedannual growth rate (CAGR) of about 9%, the market size of warehousewas over Rs 22,800 crore in FY 11 which is expected to cross Rs 35,000 croremark in FY 16 and only 12% in this accounts for agro while the remaining is industrial warehousing.

While the warehousingspace clocking a CAGR of about four% and which was about 1.52 billionsquare feet in FY 11 is expected to grow to 1.84 billion square feet till FY 16and only 29% of this accounts for agro while the remaining for industrialwarehousing.

"India needs to recalibrate its strategy to mitigate the challenges of high food grain wastage due to lack of scientific storage facilities and high inflation due to lack of cold chain infrastructure like cold storages and refrigerated transport as itleads to wastages in fruit and vegetables," suggested study. The warehousing capacity available in India, in public, co-operative and private sector standsat over 112 MT and another 35 MT of warehousing capacity is required during the12th Five Year Plan for storing all major crops highlighting the huge demand-supply mismatch. About 70% of warehousing space is owned bygovernment agencies.

First Published: Wed, April 09 2014. 14:12 IST