Decentralised Grain Storage Plan in Cooperative Sector
Prelims:
Indian Economy
& Agriculture
Mains:
GS Paper III –
Agriculture & Economy
Current relevance:
The Decentralised Grain Storage Plan
in Cooperative Sector, launched as a pilot project in 2023, is expanding
decentralised grain-storage infrastructure through Primary Agricultural
Credit Societies (PACS).
Highlights:
1.
About the
Decentralised Grain Storage Plan:
i.
Launch:
The Plan was rolled out
as a Pilot Project on 31 May 2023.
ii.
Approach: It follows an integrated,
cooperative-led model for strengthening grain storage closer to
agricultural production centres.
iii.
PACS-centric: It seeks to create integrated
agricultural infrastructure at the Primary Agricultural Credit Society
(PACS) level.
iv.
Convergence
Model: The Plan
operates through the convergence of existing government schemes, rather than
relying on a standalone mechanism.
v.
Implementing
Agency: The National
Cooperative Development Corporation (NCDC) is responsible for
implementation.
vi.
Expansion: As of July 2026, 1,012
PACS/cooperative societies had been identified, while godowns had been
completed in 313 PACS.
2.
Objectives of the
Plan:
i.
Reduce
Foodgrain Wastage:
Storage closer to production centres
seeks to reduce losses and improve foodgrain preservation, thereby
strengthening food security.
ii.
Prevent
Distress Sales:
Local storage provides farmers greater
flexibility to hold their produce instead of selling immediately,
potentially enabling better price realisation.
iii.
Reduce
Transportation Costs:
Decentralised storage can reduce
movement between procurement centres, warehouses and Fair Price Shops,
lowering transportation requirements.
iv.
Strengthen
PACS:
The Plan seeks to diversify PACS beyond
their traditional functions by involving them in storage, procurement,
processing and other agricultural activities.
v.
Enhance
Farmers' Income:
Better storage, reduced wastage and
improved marketing flexibility are intended to create higher income
opportunities for farmers.
3.
Institutional &
Financial Framework:
i.
National
Level: An Inter-Ministerial
Committee (IMC) monitors overall implementation, while the National
Level Coordination Committee (NLCC) facilitates operational coordination.
ii.
State
Level: State
Cooperative Development Committees (SCDCs) support implementation and
coordination.
iii.
District
Level: District
Cooperative Development Committees (DCDCs) identify and approve eligible
PACS in areas with storage demand.
iv.
NABARD:
Functions as the subsidy-channelising
agency for eligible projects under AMI and provides a special refinance
facility.
v.
Cooperative
Banks: State
Cooperative Banks and District Central Cooperative Banks serve as the primary
lending institutions for PACS.
vi.
Combining
NABARD refinance with the 3% interest subvention under AIF can reduce
the effective loan interest rate for PACS to 1% under the Plan.
vii.
Food
Corporation of India(FCI) has
been authorised to provide assured hiring of eligible godowns, subject
to prescribed conditions, improving project viability.
4.
Convergence of government
Schemes:
i.
Agriculture
Infrastructure Fund (AIF):
Provides financing and interest-subvention support for creation and
upgradation of post-harvest infrastructure.
ii.
Agricultural
Marketing Infrastructure (AMI): Provides back-ended capital subsidy for construction of
foodgrain storage facilities.
iii.
Sub-Mission
on Agricultural Mechanization (SMAM): Supports Custom Hiring Centres and access to
agricultural machinery.
iv.
PM
Formalisation of Micro Food Processing Enterprises (PMFME): Supports the formalisation and
development of micro food-processing units.
Through such convergence, PACS are
envisaged as integrated rural service hubs supporting agricultural
infrastructure, value chains and farmers' incomes.
5.
Integrated
Infrastructure at PACS Level:
i.
Storage
Infrastructure: The
cooperative storage model provides silo-based storage facilities with
capacities of 50 MT, 100 MT and 200 MT.
ii.
Procurement
Centres: PACS can
function as local procurement centres for purchasing foodgrains on behalf of
State agencies and the Food Corporation of India (FCI).
iii.
Primary
Processing Units: PACS
can establish facilities for cleaning, sorting and drying foodgrains to improve
their quality and marketability.
iv.
Custom
Hiring Centres: PACS
can procure tractors, harvesters, tillers and other farm machinery and provide
them to farmers on a rental basis.
v.
Fair
Price Shops: PACS can
operate Fair Price Shops for distributing foodgrains and selling processed food
products within local communities.
6.
Significance:
i.
Decentralised
Food Security:
Locating storage infrastructure closer
to production areas can strengthen local foodgrain management and India's
broader food-security network.
ii.
Strengthening
Rural Cooperatives:
Integrating storage, procurement,
processing, machinery services and distribution can transform PACS into
multipurpose rural economic institutions.
iii.
Better
Farmer Bargaining Power:
Access to nearby storage can allow
farmers to avoid immediate distress sales and seek better price realisation.
iv.
Reduced
Post-Harvest Losses:
Modern storage, ventilation, processing
and quality standards can help reduce foodgrain wastage and preserve
produce quality.
v.
Efficient
Agricultural Supply Chain:
Integrating production, procurement,
storage, processing and distribution at the local level can reduce
transportation costs and strengthen agricultural value chains.
vi.
Cooperative-Led
Rural Development:
The convergence of government
schemes, cooperative institutions, credit support and storage infrastructure
provides an integrated approach to strengthening rural infrastructure,
employment and farmers' incomes.
Source:PIB
- https://www.pib.gov.in/PressReleaseDetail.aspx?PRID=2306239®=3&lang=1