Agriculture remains a vital pillar of the Indian economy and plays a central role in the nation’s socio-economic development. It contributes approximately 19 per cent to the GDP and supports a significant majority of the population, with about two-thirds of people relying on it.
The performance of agriculture has far-reaching implications for the growth of other industries and the overall economy, as it is interconnected through backward and forward linkages. It not only serves as a source of livelihood and food security for a large portion of the Indian population but also holds special importance for many FMCG organisations.
According to the National Sample Survey, the average monthly income per agricultural household has witnessed a notable increase from ₹6,426 in 2012-13 to ₹10,218 in 2018-19. The government has implemented various measures in targeted areas to bolster farmers’ income. The PM KISAN Scheme ensures income support for farmers, while the Pradhan Mantri Fasal Bima Yojana provides crop insurance coverage. Additionally, the Pradhan Mantri Krishi Sinchai Yojana focuses on enhancing irrigation facilities.
Farmers also have access to institutional credit through initiatives such as the Kisan Credit Card and other channels. More recently, the Union cabinet approved a scheme that plans to allocate ₹1 trillion towards expanding cooperative sector storage capacity by 70 million tonnes. This ambitious project, set to become the world’s largest grain storage plan within the cooperative sector, aims to address key challenges faced by farmers and strengthen the country’s food security.
Let us delve into the significant benefits that this ambitious plan holds for India.
Empowering farmers, expanding opportunities
The increase in grain storage capacity on such a monumental scale will empower farmers to think beyond traditional boundaries. With the ability to store their produce effectively, farmers can now explore large-scale production and tap into export markets. This newfound flexibility will enable them to maximise their outputs, leading to increased incomes and a brighter future for farming communities across the nation.
Price stability, reduced distress sales
Inadequate storage facilities often force farmers into distress sales, negatively impacting their income and perpetuating a cycle of losses. However, with a significant expansion in storage capacity, the risks associated with crop damage and distress sales can be minimised. The availability of proper storage infrastructure will ensure that farmers can store their produce efficiently, reducing wastage and stabilising prices. This stability will not only benefit the farmers but also provide consumers with a consistent supply of essential food grains at reasonable prices.
Economic impact, raw material availability
The scale of this storage capacity expansion will have a profound impact on the Indian economy as a whole. With a more stable agricultural sector, India can become a reliable source of raw materials throughout the year, bolstering various industries such as food processing, FMCG, and agribusinesses. This reliable availability of raw materials will enable these sectors to flourish, attracting investment, creating jobs, and boosting economic growth in both rural and urban areas.
Strengthening food security, meeting global commitments
Food security is a global concern, and India, as a member of the G20 and currently holding the G20 presidency, recognises the importance of addressing this issue. By significantly increasing grain storage capacity, India aims to enhance its food security measures, reducing its reliance on food grain imports. With a more robust storage infrastructure, the country can better manage its buffer stock and ensure a consistent supply of essential food grains to its citizens. This achievement aligns with the goals set by the G20 in achieving sustainable food security for all. Through this concerted effort, India aims to contribute to a more secure and resilient food system, ensuring a consistent supply of nutritious food for its citizens and beyond.
Job creation, rural development
The expansion of storage facilities in rural areas will create numerous employment opportunities. The construction, management, and maintenance of warehouses and storage units will generate jobs, boosting rural development and improving the standard of living for those residing in agricultural communities. The increased economic activity in these regions will lead to overall prosperity and contribute to the equitable growth of the nation.
Boosting FMCG sector, sustainable agriculture
The FMCG sector will experience a significant boost as a result of this ambitious storage capacity plan. With improved storage infrastructure, the sector can rely on a consistent and abundant supply of raw materials, enabling them to scale up production and meet growing consumer demands. This expansion will foster innovation, investment, and competition, resulting in a dynamic FMCG sector that contributes to the country’s economic growth. Additionally, sustainable agricultural practices can be encouraged through the efficient management of stored grains, reducing wastage and promoting resource conservation.
India’s ambitious plan to establish the world’s largest grain storage capacity in the cooperative sector is poised to revolutionise agriculture and the FMCG industry. By empowering farmers, stabilising prices, strengthening food security, creating jobs, and bolstering the FMCG sector, this visionary scheme promises to transform the agricultural landscape of the country. As India works towards achieving its global commitments and fostering sustainable agricultural practices, the storage capacity expansion plan stands as a shining example of India’s dedication to economic growth, food security, and rural development.
The author is Director, Bikano, Bikanervala Foods Pvt Ltd