Punjab ropes in private players to increase grain storage capacity

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SummaryWith the government agencies facing an acute storage crunch due to huge grain stocks in Punjab, the biggest contributor to the country’s food grain procurement drive, private players have been roped in to create additional storage capacities.

With the government agencies facing an acute storage crunch due to huge grain stocks in Punjab, the biggest contributor to the country’s food grain procurement drive, private players have been roped in to create additional storage capacities.

The work on the creation of additional five million tonne of capacities through private players’ investment has begun and is expected to be completed by the end of this fiscal.

“More than 4.1 million tonne of storage capacities would be added by private investment in warehouses through the Private Entrepreneur Godown (PEG) scheme by the end of this fiscal, while close to a million tonne of capacities would be added by state government agency and Central Wearing Corporation (CWC),” AS Arunachalam, deputy general manager, Food Corporation of India (FCI), Punjab told FE.

He said tendering for most of the storage facilities to be built by private parties have been completed and the construction work is under progress.

The government has grain storage capacities of more than 20 million tonne in Punjab. At present, FCI, Punjab Grain Procurement Corporation (Pungrain) and CWC have food grains, mostly rice and wheat, of more than 19.7 million tonne.

“Through creation of additional capacities, we can deal with storage crunch to an extent by next year,” Arunachalam said.  Under PEG scheme, FCI ensures full occupancy of warehouses until the private investor recovers his investment.  

Every month, FCI supplies food grains from Punjab to the tune of more than 1.5 million tonne to the consuming states.  Out of massive wheat stocks of 40 million tonne, the government agencies have stored more than 13.6 mt in the godowns such as covered and covered and plinth (CAP) in Punjab. “We should store about six million tonne of wheat in covered storage as food grains under CAP can’t be stored for more than six months,” a FCI official said.

At present Punjab has a rice stock of close to six million tonne. This year (2012-13), Punjab is expected to contribute about 8 million tonne of rice to procurement drive while last year the purchase from the farmers was at 7.7 mt.

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