RECORD WHEAT CROP – WHERE TO STORE?

about 4 months ago
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Remember the images we saw on TV some 7-8 years ago – images of wheat rotting in the Food Corporation of India (FCI) godowns. And there was a debate raging then about how India needs to improve storage facilities and how more wheat can be distributed to the poor through the Ration shops when there is risk of it rotting.

Well, not surprisingly, nothing much has changed in the last 7 years. This year too, as per the Agriculture Ministry’s website, as at Feb 18th, the second advance estimates on production of food grains projected a record high yield of 10.6.21 million tonnes of wheat. Even taking into account the unseasonal rains in March which might have damaged wheat crop in some areas, India is heading towards another record high wheat production.

Good for us but the FCI and govt agencies are worried. As per the norms followed, if there are good storage practices followed, wheat can be stored for over 4 to 5 years but FCI has decided that it will not have wheat stock which is older than three years and threshold is two years for rice.

Year after year, there have been bumper crops and the FCI and Govt are already overstocked with previous years storages. Data on the FCI website shows that as at 1st Feb 2020, it has 103.50 lakh tonnes of wheat  and state agencies had 197.07 lakh tonnes – of this total stock of 300.66 lakh tonne, 4.27 lakh tonne was from 2016-17, 87.45 lakh tonne which is from 2017-18 and 209 lakh tonnes from 2018-19.

This is just wheat we are talking about – the same storage space is used for rice too. And that is where the shortage of storage space arises.

FCI + state agencies together have a storage capacity of 620.44 lakh tonne – these are covered godowns. Wheat can also be stored in covered and plinths or CAP storages and the total capacity of this is 132.16 lakh tonnes but 90% of these are located in Haryana and Punjab.

It is not as though nothing has been done to improve storage facilities; the Govt has plans but as usual, it is way behind schedule. In FY16, the Govt gave its approval to create 100 lakh tonne of steel silos to store wheat in bulk. This is a great idea but like everything else, progress is dismal – till date only 6.25 lakh tonne of silo capacity is completed; we are 94% short of target.

Thankfully, the progress on the Private Entrepreneurs Guarantee (PEG) scheme launched in 2008 is better – as against the target of 149 lakh tonnes of additional storage capacity, 142.83 lakh tonne is completed. This is what will save major wheat from rotting in another year of bumper crop.

But the sad truth is that over 50 million tonnes could get stored in unscientific CAPs by June and when rains come calling, like every single year, we could once again see the disturbing pictures of rotting wheat.

If only we could expedite the process of storage building – maybe if it was linked to the Ease of Doing Business Index, the targets would have been met long time ago!

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