According to state agricultural department the Nabard proposal was not considered as it categorically stated that the loan would be given to those states and union territories who do not administer the storage rentals.

At present, in West Bengal the cold storage rentals are administered by the state government. It is Rs 50 per every one quintal of perishable goods. The state farmers use the cold storages mostly for potatoes.

There are 268 cold storages in West Bengal with a total storing capacity of 35 lakh tonnes and it is mostly needed for storing potatoes. A year back there was a bumper production of 85 lakh tonnes, against the average production of 65 lakh tonnes.

"There was a huge cry over creating new storage capacities. Union government agreed and Nabard floated the capital investment subsidy schemefor construction, modernisation and expansion of cold storages. However, the state government's age old policies stopped the industry from accessing the funds," the government official said.

Nabard's chief general manager KG Shastry, in a letter dated October 5, last year, categorically mentioned about the administered rental to the regional offices while informing the new scheme. "It may please me noted that the subsidy will be available only in States / Union territories/Areas which do not administer or control rental for cold storages and there are no restrictions on the operation of these units. You are requested to please advise as urgently if there is any change in the State Government's order relating to the fixation of the rental for cold storages..." Shastry's letter stated.

According to the Nabard's scheme the Union government proposed to create 12 lakh tonnes of new storage capacity, rehabilitation of eight lakh tonnes of the existing capacitty and 4.5 lakh tonnes of onion storage capacityduring 1999-2000 and 2000-01.

Cold storages owners are also upset with the state government's decision. "As such the existing rentals do not even meet our costs. The government should move out of this area and leave it to the market forces," a cold storage owner said.

The cost of setting up an average sized cold storage is Rs 4 crore. "Even the banks are not willing to give loans as the rentals are administered by the state government. However, there is an acute shortage of storage capacity in the state and potato, more than 12 lakh tonnes are wasted every year," the storage said.

The state government official said that Bengal's loss is other states' gain. "Uttar Pradesh and Punjab entrepreneurs are availing the loan and these two states will increase the storage capacity during this year," he added.