Mumbai: Anticipating that Food Security Act may create a storage capacity shortfall for around 15 lakh tonne foodgrain, Nabard has kick-started an ambitious project to build 10,000 warehouses at panchayat level this fiscal envisaging an investment of nearly Rs 5,000 crore.
The proposed warehouses will be set up in association with primary cooperatives and the money is already provided for in the budget, Nabard Chairman Prakash Bakshi told PTI.
"We are on our own trying to take up a very large initiative of creating warehouses with cooperatives at panchayats. We have planned to set up 10,000 such warehouses this year," he said during a recent interaction, adding that around 300 such warehouses have already been put up.
On whether the target is too ambitious, Bakshi conceded that probably it is and that they may fall short of target.
However, whatever the number it achieves this fiscal will help it scale up to 20,000 such units by end of next fiscal.
Speaking on the need for such facilities, especially in light of the passage of the landmark Food Security Act, Bakshi said, "a lot of warehousing space is required and at least 15 lakh tonne capacity should be created immediately to meet additional requirement."
On the investment side, Bakshi said the budget has already earmarked Rs 5,000 crore towards creation of warehousing facilities which will be used for this project. Just like the Rural Infrastructure Development Fund, this money is also drawn from commercial banks' shortfall in priority sector lending targets, he explained.
Nabard's idea revolves around building storage facilities close to the farmers, who cannot take their produce to distant places and then sew up the right tie-ups for standardisation through which farmers get help in their marketing produce.
The proposed warehouses, to be run by primary cooperatives, will get accreditation from the Warehousing Development and Regulatory Authority so that they can issue negotiable warehousing receipts.
Farmers can sell their produce on the basis of their receipts or if they feel like waiting for the right price, they can hold the produce at the warehouses and can then draw post-harvest credit based on the receipts, Bakshi explained.
Going a step further, in the Mehboobnagar district of Andhra Pradesh, Nabard has also already forged a tie-up between a warehouse run by a primary cooperative and commodity bourse NCDEX, through which the articles can directly be sold or traded on the latter's spot exchange, Bakshi said.
"The advantage is that farmers are free from the hassles of selling at the mandis and because bidding takes place on NCDEX, they can get better prices," he said.