FCI rents out grain warehouses, gets Rs 85 lakh a month

Even as the government is spending crores of rupees on wheat imports to meet procurement shortfall and drawing criticism over the costly imports, there is a bright side to the whole episode. Empty grain warehouses are fetching the government more than Rs 85 lakh every month.

With a significant decline in grain procurement over the last two years, the Food Corporation of India (FCI), the government's grain procurement and distribution agency, is earning Rs 85,455,49 every month from renting out its surplus storage capacity created by the deficit.

This translates into an annual revenue of Rs 10.25 crore. Last week, it floated tenders to rent out more surplus capacities. FCI has companies like Reliance Industries, which has hired its 14,000-tonne warehouse located at Barbanki near Lucknow for its retail operations, among its present renters.

FCI has a storage capacity of 24.1 million tonnes spread across various states, of which 15.1 million tonnes is owned while the rest is hired. Thanks to low stocks, it has a surplus storage capacity in excess of 2 million tonnes, of which it has rented out 407,085 tonnes to various companies and state agencies.

The surplus warehouse space is located in states like Haryana, Uttar Pradesh, Uttarakhand, Rajasthan, Maharshtra, Gujarat and Andhra Pradesh.

"Renting out warehouses is an economy measure since their utlisation has come down due to lower stocks," said Alok Sinha, chairman and managing director, FCI.

The wheat procured by the government fell from 14.8 million tonnes in 2005-06 to 11 million tonnes in 2006-07, whereas rice procurement slipped from 27.6 million tonnes in 2005-06 to 25.1 million tonnes in 2006-07.