The Shantaram committee’s plan to develop 10 million tons of silo capacity to save food grains from wastage will take shape in a few months’ time. As several ministries, in partnership with the state-owned Food Corporation of India (FCI) will put in place the plan that will cost an estimated Rs. 20,000 crores.

The plan, under which the government has identified 249 real estates across India, will soon be up for tenders through which various companies will bid for constructing silos.

A large chunk of land adjacent to railway stations and railway properties will be offered. Those who win the bid will have to negotiate with the Indian Railways to secure the land.

For silos, developers need long stretches of land for rail connectivity, a major challenge in a densely populated country like India. India produces 300 million tons of grains and the government procures close to 75 million of them through the MSP mechanism.

Almost all of it is stored in conventional godowns or under the shades in the open—resulting in massive losses to the treasury. At peak, the government stores 90 million tons of grains (including carrying forwarded inventory). Today, close to 50 silo sites are under development (by a dozen different developers) through competitive bidding and will add close to 3.5 million tons of scientific storage capacity.

Another challenge in this development is that the developers want the railway ministry to offer its land on lease to be able to develop silos cost-effective in a time-bound manner. But the railway ministry is unable to find land. Worse, farmers agitating on the borders of the national capital are against the central government’s privatization process through competitive bids to prevent losses of farm products.

And then, the government is under pressure from the opposition parties to appease farmers at the cost of grains procured through MSP.From a net food importer in the 1960s, India has taken great strides towards becoming self-sufficient in food production. But this achievement also presents a dilemma of plenty, as the country faces challenges in managing this surplus production.
Silos are crucial for India.

India achieved a record food grain and horticultural production of 297 million metric tons. But the Food and Agriculture Organisation of the UN (FAO) estimates food loss and waste in India at around 40% while the state-owned Food Corporation of India (FCI) pegs it at 15%.A study by the National Academy of Agricultural Sciences (NAAS) said storage is the major cause of post-harvest losses for all kinds of food in India, fruits, and vegetables, where India faces a critical deficiency of cold storage capacity—this belies the enormous potential of its processed food industry.
As of September 2020, India has 8,186 cold storages having an aggregate capacity of 374 lakh million tons. Now nearly 65% of this is based in Bengal and Uttar Pradesh. Around 75% of the cold storage capacity is used for potatoes. It is estimated that nearly 30-40% of fruits and vegetables in India turn into waste due to a lack of proper cold storage facilities.

Metal silos for the grains have proved to be successful alternatives for reducing post-harvest grain losses but high procurement costs ranging from $40-350 have been the major stumbling block to the adoption of silos in India.

India wants to double the capacity of silos under public-private partnership (PPP) by 2019-20 to 15 lakh tons as the government seeks to raise the nationwide holding count six-fold. But land acquisition is a big challenge for the government’s ambitious plan of constructing 100 lakh tons capacity silos across the country. Food storage costs have also been rising steadily, as FCI uses temporary storage facilities like covered and plinth (CAP) or take warehouses on lease.

The government wants to make a temporary storage facility for 10 million tons of grain to create space for fresh wheat procurement. Commonly called covered and plinth (CAP), these structures will be meant for Punjab and Haryana, which contribute 70% to the government’s total wheat procurement.FCI, which procures grains for the Central pool for public distribution and other welfare schemes, says the combined stock of rice and wheat is at around 80 MT. This is thrice the minimum stock the government has to keep for running its welfare schemes.
What is troublesome is that around 7% of wheat procured from Punjab is stocked under CAP, partly exposed to rains and weather. With new harvest and new CAP facilities coming up, more wheat will be stored under CAP. The cost of food grain storage in 2019-20 would be Rs. 5,201 crore, up from Rs 4,358 crore spent by the FCI in 2018-19 and Rs. 3,610 crore in 2017-18.

Now India needs to bead the centralization of storage and overdependence on the FCI and the government’s revoke of the Essential Commodities Act is a vital step in this direction, as it will allow private parties, traders, and farmers to store food grains.