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Topic : World’s Largest Grain Storage Plan

GS-3 Mains  : Economy

Revision Notes

Context

• Ministry of Cooperation: Approved in 2023 to address food grain storage capacity shortage in India.
• Pilot Project: Rolled out across various states and UTs.

Features

• Infrastructure Facilities: Development of agricultural infrastructure at PACS level. Includes warehouses, custom hiring centers, processing units, Fair Price Shops, etc.
• Convergence of Existing Schemes: Integrates Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure Scheme (AMI), Sub Mission on Agricultural Mechanization (SMAM), Pradhan Mantri Formalization of Micro Food Processing Enterprises Scheme (PMFME).
• Financial Support and Subsidies: PACS can avail subsidies and interest subvention benefits for constructing godowns and other agri infrastructure. NABARD refinances PACS at subsidized rates (around 1%) after incorporating the benefits of the 3% interest subvention under the AIF scheme for projects up to Rs. 2 Crore.

Implementation

• Implementing Agencies: National Cooperative Development Corporation (NCDC), with support from NABARD, Food Corporation of India (FCI), Central Warehousing Corporation (CWC), NABARD Consultancy Services (NABCONS), in coordination with States/UTs.
• Extension of Pilot: Extended to 500 additional PACS with the support of State Governments, NCCF, National Buildings Construction Corporation (NBCC).
• Implementation Monitoring Committee (IMC): Ensures effective implementation and can modify guidelines and methodologies as needed.

Benefits

• Food Security: Increases storage capacity ensuring a stable supply of food, reducing the risk of shortages.
• Reduction in Wastage: Minimizes wastage of food grains due to spoilage, pests, and other factors, preserving valuable resources.
• Fair Pricing for Farmers: Prevents distress sale of crops, enabling farmers to realize better prices.
• Financial Inclusion: Farmers can get finance against stored crops for the next crop cycle, maintaining cash flow and investment in the next planting season.
• Empowerment of PACS: Enables PACS to provide storage facilities, Fair Price Shops, and Custom Hiring Centers, strengthening the rural economy and benefiting millions of farmers.
• Global Recognition: India’s efficient grain storage efforts will gain international acclaim.

Challenges

• Infrastructure Development: Significant investment and coordination required for building decentralized storage infrastructure at the local level. Constructing godowns, custom hiring centers, and processing units across various regions poses logistical challenges.
• Implementation Complexity: Converging ongoing schemes from three ministries involves intricate planning and execution.
• Regional Variability: Diverse geography and varying agricultural practices mean storage requirements differ across states and UTs. Adapting the plan to meet regional needs while maintaining uniformity is challenging.
  • Financial Sustainability: Ensuring the long-term financial viability of PACS remains a challenge.

Conclusion

• Transformative Step: The World’s Largest Grain Storage Plan is aimed at ensuring food security, reducing wastage, and strengthening cooperative societies.
• Potential Impact: Holds immense potential to revolutionize food grain storage in India, benefiting millions of citizens and strengthening cooperative societies.

This plan represents a comprehensive approach to addressing India’s food storage challenges, leveraging existing schemes and financial support mechanisms, and is poised to significantly impact the agricultural sector and rural economy.