Investment in storage infrastructure belonged traditionally to state agencies as investment of this type was viewed as economically unattractive and too complicated for the private sector.
In recent times, subsidies have been used as financial instruments to attract private investment into storage infrastructure by effectively de-risking the investment. It is a moot point that in spite of modern silos like the one put up at Moga, why others have not taken off.
The Centre has already announced a scheme for construction of godowns through private investors under a 7-10 year guarantee scheme.
Due to political and sometimes constitutional reasons, making outright privatisation of storage infrastructure is difficult and therefore concessions have been extremely popular.
A concession provides its holder the right to operate a service for a limited period of time (usually 20 years) at the end of which all the assets go back to the government. The concessionaire is responsible for all investments as well as other eventual targets specified in the contract in exchange for the right to the cashflow of the users’ payments. However, there is a growing disenchantment with concessions in particular.
Public investment in storage infrastructure has been declining as a proportion of both total government expenditures and GDP. Government agencies provide 61% (60 MT) of India’s total agri storage capacity which also includes a hired capacity of 23 MT. Dominant producers of food grain and related agriculture products are the major users of godowns and storage capacity. The cost of building silos to store a million tonne of food grains may be about Rs 600 crore considering that the required land is made available by state governments. State warehousing corporations under Government of India like FCI have already planned galvanised silo storage systems.
Replacing bags of jute with any other material will not solve the problem of wastage. If we are planning to store food grains in galvanised silos in bulk, we should also plan for the distribution system through bulk containers. This could be planned with the help and expertise of authorities connected with the Indian Railways.
Grain safety is as important as grain saving. Each region in India has evolved storage methods to preserve grains. In villages, we have grain gola (silos); made from wood or local material that protects the grain from moisture and rodents. In most cases, villagers use neem leaves or plantbased pest resistant methods to repel pests and fungus.
However, these silos-like structures are small and they are suitable for storing village produce for a year or two. These time-tested methods are being abandoned in recent times as they are replaced with concrete godowns, with support from central and state government under various schemes. Akin to many areas of government expenditure, government subsidy programmes are often at risk of corruption and fraud at the cost of taxpayer. The extent to which these two factors affect the subsidy policy is difficult to fully estimate because it is not commonly detected or reported to official sources. Precise figures are difficult to obtain and governments are also often unwilling to publicise occurrences of fraud and corruption out of fear of bad publicity or public concern at their lack of oversight.
*all figures in the table are in million metric tonne
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