The World Largest Grain Storage Plan

Context

• The establishment of the “world’s largest grain storage plan in the cooperative sector” with an estimated budget of Rs 1 lakh crore has received clearance from the Union Cabinet.
• This programme attempts to improve food security, avoid crop loss, and lessen farmer distress sales.

Relevance: 

GS Paper 2: Government Policies and Intervention

Mains Question

“Explain the goals and major highlights of the cooperative sector’s largest grain storage plan in the world. Describe how this project can help India overcome its problems with food security, crop loss, and distressed sales. Additionally, consider how the strategy would affect the agricultural industry and the rural economy. (250 words)

Major Highlights of the Grain Storage initiative:

• Goals: By developing godowns and agricultural infrastructure at the Primary Agricultural Credit Societies (PACS) level, the initiative aims to increase food security, decrease waste, and empower farmers.
• Convergence of projects: To address India’s lack of agricultural storage infrastructure, this ambitious project seeks to combine eight active projects from three ministries.
• Pilot Project: To evaluate and improve the strategy, the Ministry of Cooperation will carry out a pilot project in at least 10 carefully chosen areas.
• Inter-Ministerial Committee: The Minister of Cooperation will serve as the chair of the Inter-Ministerial Committee (IMC), which will also include the Secretaries of Agriculture, Consumer Affairs, Food and Public Distribution, and Food Processing Industries.

Justification for the Plan:

1. Strengthening Cooperatives: In line with the mission of “Sahakar-se-Samriddhi” (Cooperation for Prosperity), the Ministry of Cooperation seeks to capitalise on cooperatives’ strengths and turn them into prosperous economic businesses.
2. Empowering PACS: The strategy aims to empower PACS, which are important in the agricultural and rural environment, by creating agri-infrastructure such as warehouses, custom hiring centres, and processing units at the PACS level.
3. Wide-Reaching Impact of PACS: With over a million PACS and more than 13 crore farmers as members, the plan intends to increase PACS’s economic viability and support the expansion of the Indian agricultural industry.

Gains from the Plan:

1. Addressing Infrastructure Shortage: To address the nation’s lack of agricultural storage infrastructure, the initiative seeks to develop godowns at the PACS level. The programme intends to increase India’s cooperative sector foodgrain storage capacity by 700 lakh tonnes. About 1,450 lakh tonnes of grain may now be stored throughout the nation.
2. Diversification of PACS Activities: PACS would have the authority to carry out a variety of tasks, such as acting as fair pricing shops, common processing units, custom hiring centres, and procurement centres for state agencies like the Food Corporation of India (FCI). The farmer members’ revenues will increase as a result of this diversification.
3. Reducing Food Grain Wastage: The plan intends to reduce grain wastage, which will improve food security, by establishing local, decentralised storage capacity.
4. Preventing Distress Sales: The approach gives farmers the tools they need to avoid selling their crops at a loss, allowing them to command higher prices for their goods. In addition to storing their produce in the facilities, the farmers will have access to loans from these societies with interest rates as low as 70%.
5. Cost Savings: By establishing storage facilities at the PACS level, food grain transportation expenses to procurement hubs and fair-priced stores will be drastically reduced.

Primary Agricultural Credit Societies (PACS):

• In India’s Short-Term Cooperative Credit (STCC) structure, PACS is the lowest tier. They work hand in hand with farmers.
• The Union Budget for 2023–24 allotted Rs 2,516 crore for the computerization of 63,000 PACS over the next five years. PACS, founded in 1904, engages in short-term lending, giving loans to farmers for their agricultural requirements at the beginning of the cropping cycle.
• This action intends to increase accountability and openness while enabling PACS to expand their operations and engage in new ventures.

Conclusion

The development of the largest grain storage system in the cooperative industry is a big step towards improving food security, cutting waste, and giving farmers more leverage. The initiative intends to overcome the lack of agricultural storage facilities and support the expansion of the Indian agricultural sector by utilising the power of cooperatives and empowering PACS.