Empral-Crops Warehouse
India has several facilities for storing agricultural crops, including:
- State agencies: Own 41% of the country’s agri-warehousing capacity
- Private sector: Manages around 30% of the country’s warehousing capacity
- Food Corporation of India (FCI): Constructs Food Grain Storage Depots (FSDs) in hilly or difficult states
- Central Warehousing Corporation (CWC): Manages a portion of the country’s warehousing capacity
- State Warehousing Corporation (SWC): Manages a portion of the country’s warehousing capacity
- Cooperative sector: Manages a portion of the country’s warehousing capacity
- Ruchi Infrastructure Limited: Has set up agricultural warehousing centers in Madhya Pradesh
The government is taking steps to develop the country’s agri-logistics systems, including:
- Geo-tagging warehousing and cold storage capacity to help farmers with market intelligence
- Providing viability gap funding to set up more warehouses that comply with WDRA norms
- Constructing godowns at the PACS level
The government is also targeting to increase the storage capacity of commissioned silos from about 2 mt to 20 mt by 2026.
India has total agri warehousing capacity of around 91 MMT at present to store and conserve such large quantities with state agencies owning 41% of the capacity and the balance distributed among private entrepreneurs, cooperative societies, farmers, etc.
Under Union Budget 2020-21, the Ministry of Finance announced that more warehouses that comply with the requirements of the Warehousing Development and Regulation Authority (WDRA) will be developed. The government will provide viability gap funding for the construction of WDRA-compliant warehouses on a public-private partnership (PPP) basis at the block/ taluka level, provided state governments make the required land available. The central government has also announced that electronic negotiable warehouse receipts will be linked to the electronic National Agriculture Market platform soon. Already, a pilot for this is under way in a few states including Andhra Pradesh and Telangana. Besides, the central government has announced that the National Bank for Agriculture and Rural Development (NABARD) will be undertaking the exercise of geotagging all cold storage facilities to help increase efficiency. Mapping of storage facilities will help NABARD direct resources so as to expand capacities where there is a need.
As part of its stimulus package, the government has announced a Rs 1 trillion fund for entrepreneurs to set up facilities to procure, store and market agricultural produce, a move aimed at improving the value realised by farmers. The proposed fund will be used by aggregators, cooperative societies and farm entrepreneurs for strengthening farm gate infrastructure. The fund will facilitate financing of cold chain and storage infrastructure and establishing post-harvest management infrastructure. The government has announced that Operation Greens, a price fixation scheme that aims to ensure that farmers are given the right price for their produce, will be extended from tomatoes, onions and potatoes to all fruits and vegetables. The scheme will include a 50 per cent subsidy on transportation from surplus to deficit markets. It will also include a 50 per cent subsidy on storage, including cold storage. The project will be implemented on a pilot basis for six months and will later be extended further.
Working of Warehouses
| Acts | The warehouses (CWCs and SWCs) operate under Warehousing Acts enacted by the Central or State governments. |
| Eligibility for storage | Anyone who agrees to pay the specified fees may store the notified commodities in a warehouse. |
| Warehousing Warrant | The warehouse manager/owner issues this receipt/warrant to the person storing his produce with them. This receipt includes the name and address of the warehouse, the date of issue, a description of the commodities, including grade and weight, and an estimated value based on current prices for agricultural warehousing in India. |
| Use of Chemicals | The produce accepted at the warehouse has been scientifically preserved and is free of pests such as rodents, insects, and pesticides. Periodic dusting and fumigation are performed at the warehouse’s expense to preserve the goods. |
| Delivery of Produce | Before the goods can be withdrawn, the warehouse receipt must be surrendered to the warehouse owner. After paying storage fees, the holder may take delivery of a portion of the total produce stored. |
Types of Warehouses
| Type of Warehouse | Description |
| On the Basis of Ownership | |
| Private Warehouse | Individuals, large corporations, and wholesalers own these for the purpose of storing their own inventory. They also keep other people’s products. |
| Public Warehouse | These are warehouses owned by the government where goods are stored. |
| Bonded Warehouse | These warehouses are specially built at a seaport or airport to accept imported goods for storage until the importer pays customs. The government has granted these warehouses a permit for agricultural warehousing in India. Bonded goods are stored in this warehouse. Bonded warehouses offer the following services: The importer is relieved of the burden of paying customs duty all at once because he can take delivery of the goods in instalments.Spraying and dusting are carried out regularly to keep the goods in good condition.It is now possible to engage in entrepot trade (the re-export of imported goods). |
| On the basis of Type of Stored Commodities | |
| General Warehouse | These are standard warehouses that house the majority of food grains, fertilisers, and other items. |
| Special Commodities Warehouse | These are warehouses dedicated to the storage of commodities such as cotton, tobacco, wool, and petroleum products. |
| Refrigerated Warehouse | These are temperature-controlled storage facilities for perishable goods such as vegetables, fruits, fish, eggs, and meat. |
Warehousing Statistics in India
To store and conserve such large amounts, agricultural warehousing in India currently has a total capacity of approximately 91 MMT, with state agencies owning 41% of the capacity and the remainder distributed among private entrepreneurs, cooperative societies, farmers, and so on. Agricultural warehousing accounts for 15% of India’s warehousing market, with a value of INR 8,500 crore. The Indian logistics market is expected to grow at a CAGR of 12.17% by 2020, owing to the expansion of the manufacturing, retail, FMCG, and e-commerce sectors.
In recent years, the Indian warehousing industry has changed dramatically, resulting in a gradual shift away from traditional godowns and toward modern warehouse formats. This demand will be driven by rising GDP, an increase in the share of organised retail, increased external trade, maturing industry segments, and the implementation of GST.
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Opportunities in Agricultural Warehousing in India
The warehousing industry has grown rapidly in recent years for a variety of reasons. The ‘Make in India’ campaign, which encouraged businesses to manufacture their products in India, received widespread attention across the country. India’s exports have increased significantly, implying that the volume of goods produced locally has increased as well. As a result, the demand for warehouses has increased. As a result of the relaxed FDI norms, the retail industry expanded at an exponential rate. As a result, both domestic and foreign investment was attracted.
Agricultural warehousing accounts for 15% of India’s warehousing market, worth Rs. 8,500 crore. However, it is perceived as insufficient and disorganised. Warehousing has been linked to food security and agricultural growth in India. Warehousing is now recognised as a critical component of the supply chain in which goods are stored for safekeeping, and other value processes are implemented, reducing waste and costs.