Central Idea

• India, with its massive population of 1.4 billion people, faces the challenge of ensuring food security for its citizens.
• To address this issue, the Centre has approved the establishment of an Inter-Ministerial Committee (IMC) to facilitate the implementation of the “world’s largest grain storage plan in the cooperative sector.”
• This article explores the key aspects of the plan and its potential impact on food security in India.

Need for Grain Storage Network

(1) Population vs. Arable Land

• India constitutes 18% of the global population but has only 11% of the arable land.
• The country’s vast population necessitates a robust network of food-grain storage facilities.

(2) Current Storage Gap

• India’s current foodgrain storage capacity is 145 million metric tonnes (MMT).
• However, the total food production stands at 311 MMT, resulting in a storage gap of 166 MMT.
• Insufficient storage facilities often lead to open storage, causing damage to food grains.

(3) Global Storage Capacities

• Countries like China, USA, Brazil, Russia, Argentina, Ukraine, France, and Canada have better storage capacities than their foodgrain production.
• For instance, China, with a foodgrain production of 615 MMT, has a storage capacity of 660 MMT.

(4) Regional Disparities in India

• In India, the storage capacity varies across regions.
• Some southern states have a storage capacity of 90% and above, while northern states like Uttar Pradesh and Bihar have capacities below 50%.

Understanding the ‘World’s Largest Grain Storage Plan’

(1) Role of Primary Agricultural Credit Societies (PACS)

• The Ministry of Cooperation plans to establish a network of integrated grain storage facilities through PACS.
• PACS are widely spread across India, with over 1,00,000 societies and more than 13 crore farmers as members.
• Leveraging the existing PACS network is a crucial aspect of the plan.

(2) IMC Composition

• The IMC, constituted under the chairmanship of Minister of Cooperation , includes three other ministers and secretaries from relevant ministries.
• The IMC will modify guidelines and implementation methodologies of schemes to facilitate the storage plan.

(3) Budgetary Allocation

• The plan will be implemented through the convergence of 8 existing schemes, eliminating the need for a separate allocation.
• Schemes under the Ministry of Agriculture and Farmers Welfare, Ministry of Food Processing Industries, and Ministry of Consumer Affairs, Food and Public Distribution will be utilized.

Benefits of the Grain Storage Plan

(1) Multi-Purpose Benefits:

The plan aims to establish godowns at the PACS level, enabling them to serve multiple functions:

1. Procurement centres for state agencies and Food Corporation of India (FCI)
2. Fair Price Shops (FPS)
3. Custom hiring centres
4. Common processing units for agricultural produce

(2) Other benefits

1. Reduction in post-harvest losses
2. Decreased foodgrain handling and transportation costs
3. Enhanced market flexibility for farmers, reducing distress sales

Key issues addressed

• Infrastructure Address: The establishment of godowns at PACS level will address the shortage of agricultural storage infrastructure, increasing India’s foodgrain storage capacity by 700 lakh tonnes.
• Diversification of PACS: PACS will be empowered to undertake various activities such as procurement centers, fair price shops, and setting up custom hiring centers, enhancing farmer incomes.
• Reduced Food Grain Wastage: Decentralized storage at PACS level will minimize grain wastage, contributing to improved food security.
• Prevention of Distress Sales: Farmers can store their produce in PACS facilities and access loans of up to 70%, preventing distress sales and enabling better prices.
• Cost Reduction: Local storage facilities will significantly reduce transportation costs of food grains to procurement centers and fair-price shops.

Design and Features of Integrated Storage Facilities

(1) Facility Layout

• Spread over 1 acre of land, the integrated modular PACS will have various components.
• These include a custom hiring center, a multi-purpose hall, primary processing units, storage sheds, and container storage and silos.

(2) Financing and Capacity:

• The cost of establishing the facility is estimated at Rs 2.25 crore.
• A subsidy of Rs 51 lakh will be provided, with the remaining amount as margin money or a loan.
• The PACS is projected to earn Rs 45 lakh per year.
• The hub and spoke model will be implemented, with 55,767 PACS functioning as spokes and 7,233 PACS as hubs.
• The combined storage capacity of all 63,000 PACS will be 70 million tonnes.

(3) Technological Advancements:

• The modern silos will be equipped with computerized real-time monitoring systems.
• These facilities can be rented out to the FCI and other private agencies.

Conclusion

• India’s ambitious grain storage plan in the cooperative sector, facilitated by the IMC, aims to bridge the storage gap and ensure food security for its billion-plus population.
• By leveraging the vast network of PACS and implementing an integrated storage model, the plan seeks to reduce losses, transportation costs, and distress sales.
• With proper execution and allocation of resources, this transformative initiative can have a significant and positive impact on India’s food security landscape.

Back2Basics: Primary Agricultural Credit Societies (PACS)

• PACS are the lowest tier of the Short-Term Cooperative Credit (STCC) structure in India directly dealing with Farmers.
• The first PACS was established in 1904.
• They are headed by the State Cooperative Banks (SCB) at the state level.
• Credit from the SCBs is transferred to the District Central Cooperative Banks (DCCBs) which operate at the district level.
• PACS directly work with farmers and play a crucial role in providing short-term lending.
• PACS provide credit to farmers at the beginning of the cropping cycle to meet their needs for seeds, fertilizers, and other requirements.

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