The private sector should pitch in to construct godowns and warehouses in key states as there is gap of 32 million tonnes, said Union Minister for consumer affairs, food and public distribution Prof K V Thomas.

Speaking at a meet on “Negotiable warehouse receipts” Prof Thomas said godowns and warehouses owned by government agencies are full to capacity and private companies should step in to develop key infrastructure.

“I am sure our friends in the corporate sector are increasingly realising the potential that warehousing receipts hold and will gear for the challenges that lie ahead,” he added.

In addition to infrastructure creation, financing is agri-related infrastructure is also key as it increases liquidity in rural areas. Financing in agriculture has always been risky investment for banks and financers due to low margins and uncertain operations.

Financers often consider physical collateral like land and farm machinery to enforce or very little resale value, he explained.

Amid such situation, warehouse receipts can be alternative for farmers and processors. Through this finance is still not a popular method of financing in the country, it is expected to show an upward trend as the central government has made warehouse receipts ‘negotiable’ with an enactment of Warehousing (development and regulation) Act. 2007, he added.

Lessons

Speaking on the occasion, Sandeep Dave, secretary Karnataka department of agriculture, said Negotiable warehouse receipts system is coming at a time when the Karnataka is still fresh from post harvest crisis where prices of mango crashed in Kolar and paddy prices going in for a spiral in Davangere.

This system comes in as a relief for the farmer as it cuts commission agents role during the harvest phase. This system should be strengthened by going in for good internal roads in the taluk and hobli level, he added.

Gramen Yojana

B B Pattnaik, managing director, Central Warehousing Corporation (CWC), said country’s combined (FCI, CWC and SWC) storage capacity is 633.63 lakh tonnes. This is below the total stocks of 655.95 lakh tonnes.

The CWC is pushing for creation of godowns in rural areas through the Central government scheme – Gramen Bhandar Yojana. Mr Pattnaik said the main aim of the scheme is to provide 5 to 15 per cent price recovery for farmers through creation of scientific storage capacity with allied facilities in rural areas. This also offers scope for grading, standardisation, quality control and prevents distress sale by farmers.

“In the country so far 24,942 projects amounting to 284.31 lakh tonnes capacity have been created under Gramen Bhandar Yojana since April 1, 2001,” said Mr Pattnaik.

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