What is the massive grain storage plan the govt has unveiled, how it’ll help farmers

What is the massive grain storage plan the govt has unveiled, how it’ll help farmers

Context- The Union Cabinet recently approved the constitution of an Inter-Ministerial Committee (IMC) to facilitate the “world’s largest grain storage plan in the cooperative sector”.

(Credits- Trade Promotion Council of India)

Why does India need a grain storage plan?

  • India, the most populous country in the world, accounts for 18 per cent (1.4 billion) of the global population (7.9 billion). However, it accounts for only 11 per cent (160 million hectare) of the arable land (1,380 million hectare) in the world.
  • Also, India runs the world’s largest food programme under the National Food Security Act, 2013, that covers about 81 crore people. Therefore, to ensure food security of a billion plus population, a robust network of foodgrain storage facilities becomes essential.
  • At present, India has a foodgrain storage capacity of 145 million metric tonnes (MMT) against the total food production of 311 MMT—leaving a gap of 166 MMT. In the absence of sufficient storage facilities, foodgrains are sometimes stored in the open, which results in damage.
  • According to the Ministry of Cooperation, several countries have better storage capacities. For instance, against the total foodgrain production of 615 MMT, China has a storage capacity of 660 MMT. USA, Brazil, Russia, Argentina, Ukraine, France, and Canada are among other countries with the capacity to store more food grains than they produce.
  • India has a storage capacity of 47 per cent of its total foodgrains production. At the regional level, only a few southern states have the storage capacity of 90 per cent and above. In northern states like Uttar Pradesh and Bihar, it is below 50 per cent.

What is the ‘world’s largest grain storage plan in the cooperative sector’?

  • At present, multiple government agencies, like the Food Corporation of India (FCI), Central Warehouse Corporation, Warehouse Development Regulatory Authority, Railways, and the civil supply departments of states are involved in grain management. However, that has not yielded the desired results.
  • Under the new plan, the Ministry of Cooperation aims to set up a network of integrated grain storage facilities through Primary Agricultural Credit Societies (PACS) across the country.
  • According to the ministry, there are more than 1,00,000 PACS spread across the country with a huge member base of more than 13 crore farmers. This is one of the reasons why the PACS network was chosen for the new plan.

Who is in the IMC?

  • The Union Cabinet has approved an IMC for the scheme, to be constituted under the Chairmanship of Minister of Cooperation Amit Shah. Three other ministers — Narendra Singh Tomar, Minister of Agriculture and Farmers Welfare; Piyush Goyal, Minister of Consumer Affairs, Food and Public Distribution; and Pashupati Kumar Paras, Minister of Food Processing Industries and Secretaries will be members of the committee.
  • The IMC will “modify guidelines/ implementation methodologies of the schemes of the respective Ministries as and when need arises, within the approved outlays and prescribed goals” for facilitation of the scheme, “by creation of infrastructure such as godowns, etc. for Agriculture and Allied purposes, at selected ‘viable’ Primary Agricultural Credit Societies (PACS).”

What is the budgetary allocation?

  • Though the plan does not have a separate allocation, it will be implemented by the convergence of 8 schemes.
  • These schemes are— Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure Scheme (AMI), Mission for Integrated Development of Horticulture (MIDH), and Sub Mission on Agricultural Mechanisation (SMAM) etc.

What are the benefits of the plan?

  • According to the government, The plan is multi-pronged — it aims to address not just the shortage of agricultural storage infrastructure in the country by facilitating establishment of godowns at the level of PACS, but would also enable PACS to undertake various other activities.
  • It includes functioning as Procurement centres for State Agencies/ Food Corporation of India (FCI); Serving as Fair Price Shops (FPS); Setting up custom hiring centers; Setting up common processing units, including assaying, sorting, grading units for agricultural produce, etc.
  • Officials in the Cooperation ministry said the new initiative would result in multiple benefits. First, it would reduce post-harvesting losses. Second, it would bring down the foodgrain handling and transportation cost. Third, farmers would have a choice to sell their produce depending on the market conditions, and not be forced into distress sale.

What will the integrated facility look like?

  • Spread over 1 acre of land, the facility will be built at a cost Rs 2.25 crore. The integrated modular PACS will have a custom hiring centre, a multi-purpose hall—procurement centers, primary processing units for cleaning and winnowing — a storage shed, and container storage and silos.
  • Of the Rs 2.25 crore, Rs 51 lakh will come as subsidy, while the remaining will come as margin money or loan. It is expected that the PACS will earn Rs 45 lakh in a year.

Conclusion- the new storage plan is based on the hub and spoke model. Of the 63,000 PACS across the country, 55,767 will function as spoke and will have a grain storage capacity of 1,000 metric tonnes each, while the remaining 7,233 PACS, which will function as hubs, will have a storage capacity of 2,000 metric tonnes each. Thus, all the 63,000 PACs will have a combined grain storage capacity of 70 million tonnes.

Syllabus- GS-3; Agriculture

Source- Indian Express