The Government is attaching top priority to achieving food security, with the Planning Commission estimating India’s foodgrain production to touch 272 million tonnes (mt) during the 12th Plan. The National Food Security Bill has proposed subsidised foodgrains to at least 75 per cent of the country during the Plan Period.
A vital input to this mission is having in place a network of modern, scientifically managed warehouses and cold storage facilities. However, India is currently facing a yawning gap in this segment. The projected supply gap for storage of all agri-commodities and the required chemical fertilisers is estimated to touch 120 mt by this year and 123 mt by 2014-15.
The total covered storage capacity with the public sector, including Food Corporation of India and Central Warehousing Corporation, and co-operatives is about 60 mt. But of this, 27 mt is owned by co-operatives, most of which is not used for storage of foodgrains.
Clearly, the private sector has to be encouraged to bring in investments in this sector. But, there are some deterrents being faced by the 10-odd players in this segment, with the industry hoping some incentives in the Budget.
“A minimum investment of Rs 5,000 is required for one tonne of capacity and the payback time is 10-12 years,” Aditya Bafna, Executive Director of Shree Shubham Logistics, a subsidiary of Kalpatru Power Transmission Ltd, points out.
The industry is thus, seeking an agriculture status for this segment so that it could access bank loans below the base rate.
It is hoping that term lending institutions such as Nabard, which has been provided with low cost dedicated funds for supporting this sector, should be allowed to lend directly.
“We also feel that capital subsidy under Agriculture Marketing Infrastructure, Grading and Standardisation must be revised upward to 30 per cent of the total project cost and the ceiling of Rs 50 lakh be revised to Rs 3 crore so that larger facilities can come up,” Bafna said.
The Budget should address issues such as availability and usage limits and certain reforms in the Agriculture Produce Market (Regulation) Act.