Call Us Now

+91 9606900005 / 04

For Enquiry

World’s Largest Grain Storage Plan in the Cooperative Sector


The Union Cabinet has given its approval for the establishment of the “world’s largest grain storage plan in the cooperative sector” with an outlay of around Rs 1 lakh crore.


GS III: Indian Economy

Dimensions of the Article:

  1. Major Highlights Related to Grain Storage Plan
  2. Benefits of the Grain Storage Plan
  3. About primary agricultural credit societies

Major Highlights Related to Grain Storage Plan:


  • The grain storage plan aims to achieve several goals, including curbing crop damages, preventing distress sales by farmers, and bolstering the country’s food security.

Focus on Agricultural Infrastructure:

  • The plan emphasizes the creation of godowns (warehouses) and other agricultural infrastructure at the level of Primary Agricultural Credit Societies (PACS).
  • This infrastructure will strengthen food security, reduce wastage, and empower farmers.

Convergence of Schemes:

  • The initiative aims to converge eight ongoing schemes of three ministries to address the shortage of agricultural storage infrastructure in India.
  • By coordinating and integrating these schemes, the plan seeks to optimize their impact and effectiveness.

Pilot Project:

  • The Ministry of Cooperation will implement a pilot project in at least 10 selected districts to test and refine the grain storage plan’s implementation strategies and assess its outcomes.

Inter-Ministerial Committee:

  • An Inter-Ministerial Committee (IMC) will be formed to oversee the implementation of the grain storage plan.
  • The committee will be chaired by the Minister of Cooperation and will include the Ministers of Agriculture and Farmers Welfare, Consumer Affairs, Food and Public Distribution, and Food Processing Industries, along with relevant secretaries.

Strengthening Cooperatives:

  • The Ministry of Cooperation has developed the grain storage plan to leverage the strength of cooperatives and transform them into successful business enterprises.
  • This aligns with the vision of “Sahakar-se-Samriddhi” (Cooperation for Prosperity).

Agri-infrastructure at PACS Level:

  • The plan focuses on establishing agri-infrastructure, including warehouses, custom hiring centers, and processing units, at the level of Primary Agricultural Credit Societies (PACS).
  • This decentralized approach aims to enhance the economic viability of PACS and contribute to the growth of the Indian agricultural sector.

Significance of PACS:

  • With over 1,00,000 PACS and a membership base of more than 13 crore farmers, PACS play a significant role in the agricultural and rural landscape.
  • The grain storage plan seeks to empower PACS by providing them with storage capacity and other necessary infrastructure, enabling them to contribute effectively to the agricultural sector’s development.
  • By addressing the storage infrastructure challenges and empowering cooperatives, the grain storage plan aims to enhance food security, minimize crop wastage, and improve the economic conditions of farmers in India.

Benefits of the Grain Storage Plan:

  • Alleviation of Storage Infrastructure Shortage: The plan aims to establish godowns at the level of Primary Agricultural Credit Societies (PACS), addressing the shortage of agricultural storage infrastructure in the country. This will provide farmers with local storage facilities for their produce.
  • Empowerment of PACS: The plan empowers PACS to undertake various activities, such as functioning as procurement centers for state agencies or the Food Corporation of India (FCI), serving as fair price shops, and setting up custom hiring centers and common processing units. This diversification of activities will enhance the incomes of farmer members and contribute to their economic well-being.
  • Reduction in Grain Wastage: The establishment of decentralized storage capacity at the PACS level will help reduce grain wastage. By providing local storage facilities, the plan aims to minimize losses caused by improper storage and transportation, thus improving overall food security.
  • Prevention of Distress Sales: The plan provides farmers with various options for storing their crops, preventing distress sales. With access to storage facilities, farmers can wait for better prices in the market, leading to improved income realization and financial stability.
  • Better Prices for Produce: The availability of storage facilities at the PACS level enables farmers to store their produce and sell it at a more opportune time, when prices are favorable. This allows farmers to negotiate better prices for their crops and improves their overall profitability.
  • Cost Reduction in Transportation: The establishment of storage facilities at the PACS level significantly reduces transportation costs of food grains to procurement centers and fair price shops. With localized storage, farmers and cooperatives can save on transportation expenses, making the supply chain more efficient and cost-effective.

About primary agricultural credit societies:

  • PACS is the smallest cooperative credit institution in India and a basic unit.
  • The initial Primary Agricultural Credit Society (PACS) was founded in 1904.
  • It has a grassroots effect (gram panchayat and village level).
  • PACS serves as the last point of contact between the primary borrowers, or rural residents, and the higher agencies, such as the Central Cooperative Bank, State Cooperative Bank, and Reserve Bank of India.
  • PACS are governed by the RBI and registered under the Co-operative Societies Act.
  • The “Banking Regulation Act-1949” and the “Banking Laws (Co-operative societies) Act 1965” are in charge of them.
Objectives of PACS
  • To raise capital for the purpose of making loans and supporting members’ essential activities.
  • To collect deposits from members with the goal of improving their savings habit.
  • To supply agricultural inputs and services to members at reasonable prices,
  • To arrange for the supply and development of improved breeds of livestock for members.
  • To make all necessary arrangements for improving irrigation on land owned by members.
  • To encourage various income-generating activities through supply of necessary inputs and services.
Functions of PACS
  • PACS typically offer the following services to their members:
    • Input facilities in the form of a monetary or in-kind component
    • Agriculture implements for hire
    • Storage space

-Source: The Hindu, Indian Express

December 2023