World's largest innovative storage scheme for agriculture sector

Amid the farmers' agitation, the government has introduced a pilot project for the world's largest grain storage scheme in the cooperative sector. It is believed that this will prove beneficial for the agriculture sector in the long run. This pilot project targets Primary Agriculture Credit Societies in 11 states and is estimated to create storage capacity of seven crore tonnes of food grains over a period of five years. The scheme seeks to directly address the shortage of food grain storage capacity in the country but will have multiple benefits for all stakeholders. which includes farmers and consumers.

Data from the Food and Agriculture Organization (2021) shows that while many countries have surplus storage capacity, India does not. The total production of food grains in the country is 311 million tonnes while the total storage capacity is barely 145 million tonnes. Currently, food grain management (procurement and storage) facilities are provided by Food Corporation of India, Central Warehousing Corporation and many other small and large government agencies. In this context, involving PACS in the process of setting up warehouses, setting up custom hiring centres, processing units and setting up fair price shops is actually a step towards decentralization of the warehousing system. This will lead to development of agricultural infrastructure across the country. It may be noted that government procurement of foodgrains at minimum support price is limited as the geographical area for wheat and rice production is limited.

In such a situation, it is expected that this new initiative will diversify the procurement process of government agencies and its benefits will reach farmers across the country. Along with this, Primary Agricultural Credit Societies, which are the smallest cooperative agencies working at the grassroots level, have so far been involved in the process of providing short-term credit for agricultural production. These are the last pinnacle of the three-tier cooperative credit structure where they reach out to communities engaged in agriculture and allied activities. This makes the pack suitable for grain storage at gram panchayat and village level.

Certainly, the new grain collection scheme can transform the primary agricultural credit societies into diversified economic institutions and strengthen the role of cooperatives in the agricultural sector. This also underlines the important role of the cooperative sector in changing the rural and agricultural landscape of the Indian economy.

The scheme will also help prevent wastage of food grains. This will result in higher income for farmers and lower prices for consumers. The incidence of farmers selling their produce at low prices in desperation will also decrease and transportation costs will also decrease.

The success of this initiative will of course depend on the interaction between the primary agricultural credit societies concerned and these credit societies and their engagement with the government at the local and higher levels.

To improve their capacity, the Central Government has allocated Rs. 2,516 crore was allocated. The grain storage scheme is likely to cost Rs 1.25 lakh crore and will require coordination of many agencies. At the same time, it has to be carefully implemented in different sectors so that the desired goals can be achieved keeping in mind the different needs.