Building Resilient Infrastructure for Storage of Food Grains

Syllabus:GS3/Economy

In Context

• India produced a record 353.96 million tonnes of foodgrain in 2024-25, supported by modern storage infrastructure.

Food Grain Storage Systems in India

• There are various methods of storing foodgrains, and some of the key ones include:
  • Centralized storage, handled mainly by agencies like the Food Corporation of India (FCI).
  • Cold storage, which caters to perishable items such as fruits, vegetables, dairy products, and meat.
  • Decentralized storage, carried out through rural godowns, Primary Agricultural Credit Societies (PACS), and on-farm storage by farmers.

Role of FCI 

• The Food Corporation of India (FCI) is the main agency managing centralized storage of food grains in India. 
• It procures wheat, rice, and other grains at Minimum Support Price (MSP) to protect farmers’ incomes and maintain buffer stocks. 
• Procurement is done directly by FCI or through State Government Agencies, which hand over stocks to FCI for storage.
• FCI stores these grains in modern warehouses and steel silos, ensuring quality and safety. 
• These reserves support the Public Distribution System (PDS) to stabilize prices and ensure food security nationwide.

The Importance of Food Grain Storage

• Reducing Post-Harvest Losses: Proper storage, including cold storage and modern warehouses, significantly reduces the wastage of agricultural produce.
• Ensuring Food Security: Maintaining a buffer stock of food grains is essential for national food security and for distribution under programmes like the National Food Security Act (NFSA).
• Preventing Distress Sales: Access to storage facilities allows farmers to hold their produce and sell it at an optimal time, avoiding distress sales and helping them realise better prices.
• Price Stabilisation: Maintaining strategic buffer stocks helps protect consumers from extreme price volatility in essential commodities.
• Maintaining Quality: Scientific storage ensures that food grains remain fit for human consumption by controlling factors like moisture and pests.

Challenges

• Storage Shortage: Some States face acute space crunches, with rice stocks piling up due to slow movement to consumer states.
• Infrastructure Gaps: Many warehouses are outdated or lack scientific storage conditions, leading to spoilage and pest infestation.
• Logistical Bottlenecks: Delays in procurement, milling, and distribution create backlogs and reduce available space.
• Volatile Demand: Consumer states often report low demand, slowing the outflow of stored grains and worsening congestion.
• Climate Vulnerability: Open plinth storage is exposed to rain and humidity, increasing risk of damage.

Schemes for Strengthening Storage of Foodgrains

•  Agriculture Infrastructure Fund (AIF): The Agriculture Infrastructure Fund (AIF), launched in 2020, is a medium to long-term debt financing facility aimed at strengthening agricultural infrastructure in India.
  • It provides interest subvention and credit guarantee support for loans used in post-harvest management and farming assets. 
• Agricultural Marketing Infrastructure (AMI): AMI scheme is a key component of the Integrated Scheme for Agricultural Marketing (ISAM).
  • The objective of this scheme is to strengthen agricultural marketing infrastructure across rural India by providing financial assistance for the construction and renovation of godowns and warehouses.
• Pradhan Mantri Kisan SAMPADA Yojana (PMKSY):  It is a comprehensive scheme designed to build modern infrastructure for the food processing sector, creating a smooth and efficient supply chain from the farm gate to retail. 
• Capital Investment Subsidy Scheme for Cold Storages and Horticulture Products: It aims to promote scientific storage infrastructure and reduce post-harvest losses of perishable produce.
  • Under the scheme, a credit-linked back-ended subsidy is provided at the rate of 35% of the project cost in general areas and 50% in North-Eastern, hilly, and scheduled areas for construction, expansion, or modernization of cold storages and Controlled Atmosphere (CA) storages with capacities between 5,000 MT and 20,000 MT. 
• World Largest Grain Storage Plan in Cooperative Sector Schemes for Augmentation of Storage Capacity: The government, in May 2023, approved the World’s Largest Grain Storage Plan in Cooperative Sector, aligned with the vision of “Atmanirbhar Bharat”. The scheme involves the creation of agri infrastructure at PACS level, including godowns, custom hiring center, processing units, and fair price shops 
• Steel Silos Construction: Promotes scientific, automated grain storage to reduce losses and extend shelf life.
• Asset Monetization: Builds new godowns on vacant FCI land to increase storage; 177 locations identified for 17.47 LMT capacity.
• Central Sector Scheme (Storage & Godowns): Focuses on North East States and a few others, with Rs. 379.50 crore allocated for NE and Rs. 104.58 crore for other states, fully released as of now.
• Private Entrepreneurs Guarantee (PEG) Scheme: Since 2008, encourages private investment in warehousing via government guarantees, improving foodgrain storage through PPP mode.

Conclusion

• Agriculture is crucial to India’s economy and food security, but efficient storage and distribution are key to reducing losses and ensuring stable prices.
• While storage capacity has expanded, challenges like space shortages and outdated facilities remain. 
• Modern technology and better logistics are needed to protect India’s agricultural growth and nutrition.

Source :PIB