The Food Corporation of India?s (FCI) decision to lease out its excess storage space in different parts of the country to different players may turn out to be a boon in disguise for the fledgling Indian retail industry which has been in a fix over finding a solution to its supply chain woes once they start directly procuring from the producers of commodity and other goods.

FCI has recently decided to lend or lease out its surplus scientifically constructed godown capacity to public, private and joint sector organisation in various states. It has invited expression of Interest (EoI) from various interested players who would like to hire its excess facilities.

According to analysts and industry insiders, FCI?s move to lease out their excess storage space in various part of the country would give a relief, at least temporarily, for those retail biggies who are planning to source products directly from producers.

Many of the retail chains like Reliance Fresh and Bharti had earlier said that they would try to source products, especially food products, directly from the producers to cut out the middlemen, who are making a killing, from the trade.

This, according to them would be a win-win deal for both producers and the retail chains as it would give farmers higher farm gate prices while reducing their cost of procurement.

However, one major hurdle in their plan was the availability of good quality storage space near the procurement centres. It will take a while for them to put in place a chain of storage spaces near various sourcing points.

According to a FCI notification, it would rent out a total storage space which could accommodate 129.43 lakh tonne of goods and commodities in its various circles spread across the country. This includes 15.99 lakh tonne capacity in the eastern region, 3.10 lakh tonne in the north east, 57.10 lakh tonne in north India, 27.83 lakh tonne in south India and 25.41 lakh tonne in western India.

According to a recent report released by FICCI, the major obstacle on the path of organised retail, which is expected to touch Rs 1.20 lakh crore mark by 2010, is the key supply chain issues.

Unofficial estimates puts a loss of close to 4% of its annual income due to wastage of perishable commodities.