Warehouse & Storage Industry of India

REPORT

ON

Warehouse and storage Industry

Shailendra singh rathore

MBA(ab)

INSTITUTE OF AGRI BUSINESS MANAGEMENT

RAJASTHAN AGRICULTURAL UNIVERSITY

BIKANER-334001

S.NO. CONTENTS PAGE NO.

1

1 Introduction 3

2 Current scenario 4

3

Major Players :-

3.1 Food Corporation of India

3.2 Central Warehouse Corporation

3.3 State Warehouse Corporation

3.4 National Bulk Handling Corporation Ltd.

3.5 National collateral Management Services Ltd.

6

4 Other Private Players 19

5 Cold Storage 19

6 Rural Godown Scheme 23

7 Warehouse Receipt 24

8 References 26

1. Introduction:-

2

Before the dawn of reforms era, Indian farmers used to dream of having a roof over their

head. Every election season, netas harped on ‘Roti, Kapada aur Makan’ promise to win over

farmers. But, things are changing fast. Now, India’s farming community wants a roof over

their harvested crops. Instead of craving for a shelter for themselves, the ryots now seek to

cover their fruits of hard labour. Thus, 21st century India witnessed the birth of warehousing

revolution.

Lack of proper storage facilities leads to attacks by pests and other organisms. The damage

caused through such infestations leads to a reduction in market value depending upon the

extent of damage. In some cases the produce is declared unfit for consumption and has to be

destroyed. This leads to a huge loss for the farmer. Sensible farmers should take pains to store

their agricultural produce carefully so as to command the most optimum price in the market.

Warehousing and transportation forms the backbone supply chain of all industries. Adequate

storage capacity and strategic location of the warehouse enables efficient functioning of

supply and distribution network and also provides strategic competitive advantage to the

business. Proper material handling, storage conditions and timely movement of goods are

necessary as improper handling and prolonged storage can deteriorate the quality of the

stored product especially the perishables goods, biological drugs and food stuffs.

As commodities trade entered a new phase in India, it is in the warehousing sector that India

is seeing a parallel boom. Thanks to huge demand for various agricultural products due to

increasing delivery system in Futures market and the retail growth that is taking place across

the country, warehousing companies are not only increasing their capacity but scaling up the

quality of their storage space.

Since warehouses need large tracts of land, private investment is drying up. Experts say delay

in land acquisition and high costs are hindering the establishment of modern warehouses.

Unlike the real estate business, warehouses do not give immediate returns, which again

blocks investments in this sector.

India is the second largest producer of fruits in the world, producing 46.8 million tons of

fruits and accounting for 10% of the world's fruit production. It is also the second largest

producer of vegetables, producing 90.85 million tons of vegetables and accounting for 14%

3

of the world’s production. Losses during storage operation accounts for 6-7 % of production

in food grain and 20 to 30% in case of vegetables and fruits.

Uses of Warehouses:

Scientific storage of produce from the vagaries of weather, rodents, insects and pests.

They prevent quality and quantity losses.

Meeting the financial needs of people who store the produce by providing value for

the goods stored.

Regulating price levels by regulating the supply of goods in the markets. More goods

from the buffer are released when supplies are less and less is released when supplies

are more in the markets.

Offering market intelligence in the form of price, supply and demand information so

that market users may develop selling and buying strategies.

2. Current scenario:-

Indian warehousing sector is expected to grow from US$ 20 billion in 2007-08 to about US$

55 billion by 2010-11, growing at a rate of 35-40 per cent every year . (A report by real estate

consultancy firm, Cushman and Wakefield.).

The Country is pegged around 30 million MT in 2006, out of which the total storage capacity

contributed by State and Central Warehouses is 10.04 million MT and 19.7 million MT

respectively.

Three public sector agencies are involved in building large-scale storage and warehousing

capacities in the country. These are the Food Corporation of India (FCI), Central

Warehousing Corporation (CWC) and 17 State Warehousing Corporations (SWCs). While

the FCI uses its warehouses mainly for storing food grains, the storage capacities with CWC

and SWCs are used for the storage of food grains as well as other items.

The FCI has the largest agricultural warehousing systems with over 24.33 million tonnes of

storage capacity in over 1451 godowns located all over India. This includes owned as well as

hired warehouses.

4

The CWC was founded in 1957 to provide logistics support to the agricultural sector.

Currently, it operates around 514 warehouses across the country with a storage capacity of

10.27 million tonnes. Other than storage and handling, CWC also offers services such as

disinfestations, pest control, fumigation, clearing and forwarding, handling and

transportation, procurement and distribution.

State Warehousing Corporations exist in 17 States to provide storage facilities and pest

control services for various agricultural commodities belonging to farmers of that State.

These warehouses work under different Warehousing Acts enacted by the respective State

Governments.

2.1 Changing utilization trends of storage Capacity:-

The changing utilization trends indicate towards increasing storage capacity demand from the

industries and other businesses while the demand from the forest and Government

departments such as civil supplies are decreasing.

2.63%17.13

%

5.09%

16.46%

23.76%

8.09%

10.20%

16.59%

2003-04

Administrative orgnisation

civil supply corpora-tion

indian food corpora-tion

Businessman

Small Scale forest producer

Co-operative socities

Farmers

Others

5Source: indore.nic.in/GIM/PDF/5-Integrated_Warehousing_Hub.pdf

Graph No. 2.1

4.75%

10.90%

5.09%

24.91%

4.04%

38.78%

11.46%

0.07%

2005-06Administrative orgnisation

civil supply corporation

indian food corporation

Businessman

Small Scale forest producer

Co-operative socities

Farmers

Others

3. Major Player:-

Public sector:-

Food Corporation of India

Central Warehousing Corporation

State warehousing Corporation

Private sector:-

National Bulk handling corporation Ltd.

6

Source: indore.nic.in/GIM/PDF/5-Integrated_Warehousing_Hub.pdf

Graph No. 2.2

National collateral Management Services Ltd.

3.1 Food Corporation of India:-

The Food Corporation of India was set up under the Food Corporation Act 1964 and on 14th

January, 2006, FCI completed 41 years of its existence, in order to fulfil following objectives

of the Food policy:

1. Effective price support operations for safeguarding the interests of the farmers.

2. Distribution of food grains throughout the country for Public Distribution System; and

3. Maintaining satisfactory level of operational and buffer stocks of food grains to ensure

National Food Security.

Since its inception in 1965, having handled various situations of plenty and scarcity, FCI has

successfully met the challenge of managing the complex task of providing food security for

the nation. A strong food security system which has helped to sustain the high growth rate

and maintain regular supply of wheat and rice right through the year. The efficiency with

which FCI tackled one of the worst droughts of the century not only cemented its role as the

premier organization in charge of food security in India, but also brought it accolades from

international organizations.

FCI was set up to secure strategic position in food grains trade and implement the National

Policy for Price Support operations, procurement, storage, inter-state movement and

distribution operations, in short to operate the Central Pool. Today, FCI is the country leader

in food grains management and is fully focused on helping farmers feed the country, better

and more efficiently, today and tomorrow.

Food constitutes the main requirement of every human being. In a sub-continent like India

where millions of mouths depend on Targeted Public Distribution System (TPDS) and other

welfare schemes of Govt. of India, FCI, plays a leading role in making food grains available

to the extent of 30 lakh tones during a month, to respective State Govts. For its distribution

among beneficiaries. To procure, store, preserve and move such a huge quantity of stocks

spreading over vast areas with its intricate network is, indeed, a nerve and back-jerking task.

7

State wise storage Capacity (Owned, Hired/Covered and CAP) of Godowns of FCI in

India:-

Table no:3.1.1 State-wise Storage Capacity (Owned, Hired/Covered and CAP) of Godowns of FCI in India

(As on 31.01.2007)(Figures in Lakh MTs)

Zone

States/UTs

Covered CAP Grand

Total

Total

Stocks

Utilisa-tio

n (%

Age)

FCI Owned

Hired Owned

Hired

TotalSt

ate

Govt.

CWC

SWC

Privat

e Parties

Total Hired

Total

Covere

dEast

Bihar 3.66

0.03

0.5 0.59

0.48

1.6 5.26 0 0 0 5.26

1.71

16

Jharkhand

0.66

0 0.11

0.18

0.23

0.52

1.18 0 0 0 1.18

0.56

33

Orissa 2.93

0 0.48

2.55

0.15

3.18

6.11 0 0 0 6.11

3.08

47

West Bengal

8.64

0.23

0.55

0 0.56

1.34

9.98 0 0 0 0.98

2.62

50

Sikkim 0.1 0.01

0 0 0 0.01

0.11 0 0 0 0.11

0.06

26

Total 15.99

0.27

1.64

3.32

1.42

6.65

22.64

0 0 0 22.64

8.03

56

North-East

Assam 1.99

0.02

0.1 0.07

0.37

0.56

2.55 0 0 0 2.55

0.8 35

Arunchal Pradesh

0.18

0 0 0 0 0 0.18 0 0 0 0.18

0.02

31

Meghalaya

0.14

0 0.11

0.05

0 0.16

0.3 0 0 0 0.3 0.2 11

Mizoram

0.17

0.01

0 0 0 0.01

0.18 0 0 0 0.18

0.09

90

Tripura 0.22

0.05

0.07

0 0 0.12

0.34 0 0 0 0.34

0.19

50

Manipur

0.2 0.02

0 0 0 0.02

0.22 0 0 0 0.22

0.05

56

Nagaland

0.2 0 0.1 0 0 0.1 0.3 0 0 0 0.3 0.14

23

Total 3.1 0.1

0.38

0.12

0.37

0.97

4.07 0 0 0 4.07

1.49

47

North

Delhi 3.36

0 0 0 0 0 3..36

0.34

0 0.34

3.7 1.18

37

Haryana

7.7 3.89

1.88

3.99

1 10.76

18.46

3.17

0 3.17

21.63

8.2 32

Himachal Pradesh

0.14

0.06

0.07

0 0 0.13

0.27 0 0 0 0.27

0.21

38

Jammu & Kashmir

0.96

0.15

0 0 0.1 0.25

1.21 0 0 0 1.21

0.78

78

Punjab 21.84

0.02

0.6 32.32

2.71

35.65

57.49

6.33

0.12

6.45

63.94

33.32

64

Chandigarh

0.4 0 0.41

0.21

0 0.62

1.02 0.08

0 0.08

1.1 0.8 52

Rajasthan

7.06

0 0.13

0 0.16

0.29

7.35 1.58

0.19

1.77

9.12

3.74

73

Uttar Pradesh

14.96

0.09

1.82

4.04

0.2 6.15

21.11

4.19

0 4.19

25.3

5.8 41

Uttaranchal

0.66

0.1

0.23

0.43

0.05

0.81

1.47 0.09

0.02

0.11

1.58

0.71

23

Total 57.08

4.31

5.14

40.99

4.22

54.66

111.74

15.78

0.33

16.11

127.8

54.74

45

8

Table No. 3.1

5South

Andhra Pradesh

12.73

0 2.39

17.77

0 20.16

32.89

1.97

0 1.97

34.86

16.78

48

Kerala 5.12

0 0 0 0 0 5.12 0.21

0 0.21

5.33

2.21

41

Karnataka

3.73

0 0.38

0.44

0 0.82

4.55 1.37

0 1.37

5.92

2.17

37

Tamil Nadu

5.83

0 0.8 0.33

0 1.13

6.96 0.6 0 0.6 7.56

4.52

65

Pondicherry

0.42

0 0 0.02

0 0.02

0.44 0.08

0 0.08

0.52

0.19

37

Total 27.83

0 3.57

18.56

0 22.13

49.96

4.23

0 4.23

54.19

25.87

48

West

Gujarat

5 0.14

0.42

0 0 0.56

5.56 0.49

0 0.49

6.05

3.56

59

Maharashtra

11.77

0.26

0.75

0.96

0.49

2.46

14.23

1.42

0 1.42

15.65

5.46

35

Goa 0.15

0 0 0 0 0 0.15 0 0 0 0.15

0.05

33

Madhya pradesh

3.37

0 0.5 0.75

0.37

1.62

4.99 0.36

0 0.36

5.35

3.66

68

Chhattisgarh

5.12

0.03

0.26

1.97

0.05

1.31

6.43 0.05

8.57

8.62

15.05

12.93

86

Total 25.41

0.43

1.93

2.68

0.91

5.95

31.36

2.32

8.57

10.89

42.25

25.66

61

India 129.41

5.11

12.66

65.67

6.92

90.36

219.77

22.33

8.9

31.23

251

115.79

46

Source: www.indiastat.com

3.2 Central Warehousing Corporation:-

A premier Warehousing Agency in India, established during 1957 providing logistics support

to the agricultural sector, is one of the biggest public warehouse operators in the country

offering logistics services to a diverse group of clients.

CWC is operating 490 Warehouses across the country with a storage capacity of 9.8 million

tonnes providing warehousing services for a wide range of products ranging from agricultural

produce to sophisticated industrial products.

Warehousing activities of CWC include foodgrain warehouses, industrial warehousing,

custom bonded warehouses, container freight stations, inland clearance depots and air cargo

complexes.

Apart from storage and handling, CWC also offers services in the area of clearing &

forwarding, handling & transportation, procurement & distribution, disinfestation services,

fumigation services and other ancillary activities.

9

CWC also offers consultancy services/ training for the construction of warehousing

infrastructure to different agencies.

FUNCTIONS:

1. To acquire and build warehouses at suitable places in India and abroad;

2. To run Warehouses for the storage of agricultural produce, seeds, manures, fertilizers,

agricultural implements and notified commodities offered by individuals, cooperative

societies and other institutions;

3. To arrange facilities for transport of agricultural produce, seeds, manures fertilizers,

agricultural implements and notified commodities to and from Warehouses.

4. To subscribe to the share capital of State Warehousing Corporations;

5. To act as an agent of the Government for the purpose of purchase, sale, storage and

distribution of agricultural produce, seeds, manures, fertilizers, agricultural implements and

notified commodities;

Services provided by CWC:-

1. Provision of space to accept notified commodities from various clients.

2. Acts as an enabler for credit through pledge of negotiable warehouse receipts with banks.

3. Scientific storage through a chain of 490 numbers of warehouses all over the country at

reasonable rates.

4. Cold/Air Conditioned Storage for perishables like fruits, vegetable, dairy products, drugs

& pharmaceuticals,

5. Custom Bonded Warehouses at Ports Metro-politan towns, industrial complexes and inland

stations for various import/export cargo.

6. Air-cargo Complexes to provide storage facilities at Air Ports for import/export of cargo

and unaccompanied baggage.

7. Container Freight Stations (CFSs) and Inland Clearance Depots (ICDs) for handling of

import containers, their de-stuffing and delivery of stocks; consolidation and stuffing of

export cargo for onward transmission to Gateway Ports by road/through rail.

8. Handling and Transport facilities to depositors on their request on actual plus nominal

supervision charges.

9. Orderly Marketing – facilities through handling, grading, storage and distribution of

commodities on behalf of Import Marketing and Consumers Centers.

10

10. Help the depositors to keep his goods indemnified against loss of damage due to fire,

floods and burglary.

11. CWC takes up construction programme of warehouses for storage for other companies.

12. Under Farmers Extension Service Scheme, CWC educates the farmers on scientific

preservation at farm level to reduce post harvest losses.

13. CWC also provides Pest Control Services at the door steps of farmers, traders,

cooperatives, government organizations, exporters and importers at very competitive rates

with a network of technically trained man-power throughout the country. CWC has got

recognition from the Directorate of Plant Protection & Quarantine, Ministry of Agriculture

and has authorized man-power to undertake fumigation of export and import cargo. Also

provides ship fumigation and air craft fumigation services and disinfestations services to

many more government and private organizations, hospitals, residential colonies, railway

coaches etc.

14. Expert advice and training on storage problems.

15. Consultancy services – preparation of projects, techno-economic feasibility report in

respect of all warehousing facilities.

Growth in storage capacity of CWC: -

(In Lakh Tonnes)

As on Owned Hired Total

31-03-2000 54.47 20.32 74.79

31-03-2001 56.12 27.39 83.91

31-03-2002 68.45 20.72 89.17

31-03-2003 76.11 15.03 91.14

31-03-2004 80.75 12.84 93.59

31-03-2005 84.36 17.50 101.86

31-03-2006 80.22 20.15 100.37

31-03-2007 83.25 18.95 102.70


11

Table no: 3.2.1

Graphical representation of growth in storage capacity of CWC:-

01/01/2

000

01/01/2

001

01/01/2

002

01/01/2

003

01/01/2

004

01/01/2

005

01/01/2

006

01/01/2

0070

20

40

60

80

100

120

Growth in Storage capacity

(In Lakh Tonnes) Owned

(In Lakh Tonnes) Hired

(In Lakh Tonnes) Total


Subsidy provided by CWC: -

CWC provide subsidy under various schemes for the establishment of warehouse, these are:-

1. Under Farmers Extension Service Scheme, Central Warehousing Corporation provides

30% rebate on Storage Charges to the bonafide farmers.

2. 10% rebate is given on Storage Charges to the Cooperative Societies for their stocks

stored in Central Warehouses.

3. CWC also provides rebate to State Civil Supplies Corporation up to 10% in Food-grain

and 5% in other commodities.

12

Graph No: 3.2.1

No subsidy is provided by Central Warehousing Corporation on Storage Charges.

Capacity Utilization by CWC:-

0

20

40

60

80

100

120

71.9872.98 73.98

78.98

86.5591.5 92.64

98.06102.11 102.7

99.64

52.16 53.7456.8

67.0471.64

67.75

55.2461.58

71.59

87.86

73.35

Total Capac-ity

Total Utilisa-tion


Prices charged by CWC:-

Table no. 3.2

Rate of Warehousing Charge (Storage) of CWC in India(1957-1958 to 2007-2008)

(Rupees per standard bag per month)

Year Rate Effective date

1957-58 0.18* 1.1.1958

1970-71 0.25

13

Graph No: 3.2.2

1980-81 0.4

1990-91 1

1995-96 1.4

1996-97 1.7 1.4.1996

1997-98 1.7

1998-99 2 15.7.1998

1999-00 2 15.7.1999

2000-01 2.75 1.1.2000

2001-02 3 1.1.2002

2002-03 3.75 1.9.2002

2003-04 3.75 -

2004-05 3.75 -

2005-06 3.75 -

2006-07 3.75 -

2007-08 3.75 -


14

3.3 State warehousing Corporation:-

State Warehousing Corporations exist in 17 States to provide storage facilities and pest

control services for various agricultural commodities belonging to farmers of that State.

These warehouses work under different Warehousing Acts enacted by the respective State

Governments.

Selected State-wise Number of State Warehousing Corporation and their Capacity in India

(As on 31.08.2007)

States No. of Centers

Capacity in Lakh Tonnes

Total

Const Hired Plinth

Andhra Pradesh

138 4.99 17.65 - 22.64

Assam 44 2.09 0.46 - 2.55

Bihar 45 1.45 1.16 - 2.61

Chhattisgarh 105 5.06 2.32 - 7.38

Gujarat 47 1.29 0.08 - 1.37

Haryana 105 9.11 2.82 2.06 13.99

Karnataka 119 5.06 3.92 - 8.98

Kerala 60 1.76 0.28 - 2.04

Madhya Pradesh

233 10.95 0.83 0.06 11.84

Maharashtra 165 11.04 0.65 - 11.69

Meghalaya 5 0.11 - - 0.11

Orissa 60 3.95 0.19 - 4.14

Punjab 116 24.17 27.42 5.07 56.66

Rajasthan 91 7.23 0.71 - 7.94

Tamil Nadu 61 5.99 0.31 - 6.3

Uttar Pradesh 151 24.54 2.99 - 27.53

West Bengal 30 1.37 0.8 - 2.17

15

India 1575 120.2 62.59 7.19 189.94

Growth in the storage capacity of State Warehousing Corporation:-

(in lakh tonnes)

As on Owned Hired Total

31-03-2000 82.20 41.54 123.74

31-03-2001 105.80 41.33 147.13

31-03-2002 104.28 58.50 162.78

31-03-2003 151.55 47.76 199.31

31-03-2004 158.05 48.76 206.81

31-03-2005 128.84 66.36 195.20

31-03-2006 127.64 69.41 197.05

31-03-2007 119.55 72.65 192.20


Graphical representation of growth in storage capacity of SWCs:-

01/01/2

000

01/01/2

001

01/01/2

002

01/01/2

003

01/01/2

004

01/01/2

005

01/01/2

006

01/01/2

0070

50

100

150

200

250

(in lakh tonnes) Owned

(in lakh tonnes) Hired

(in lakh tonnes) Total

16

Private Player:-

3.4 National Bulk Handling Corporation Ltd.:-

NBHC has emerged as India's leading integrated commodity and collateral management

company distinguished as the first and only such service provider in the country to obtain

an ISO 22000:2005 certification and a 'Category G' membership of GAFTA (The Grain

and Feed Trade Association, UK).

NBHC is part of a unique commodity ecosystem, which provides Complete Solutions in

Commodity and collateral Management along with its stakeholders, Financial

Technologies (India) Ltd. (FTIL), State Bank of India, and the FTIL group companies:

Multi Commodity Exchange of India Ltd. (MCX) and National Spot Exchange Ltd.

(NSEL).

It has a pan-India presence managing 381 storage facilities (warehouses and cold

storages) under the lease and franchisee basis, covering an expanse of over 1.8 million

MT capacity and admeasuring 10 mn sq. ft.

Services provided by NBHC:-

I. NBHC “Cecure” : -

'NBHC Cecure' allows banks to proactively manage risks emanating from

commodity based lending. NBHC has been empanelled and has ongoing

arrangements with 24 leading public, private sector including multi-national RRBs

and co-operative banks. NBHC facilitates the commodity financing for all

participants in the commodity value chain from farmers, corporate houses, traders

and processors. As of July 2008, through these arrangements it has enabled

funding worth of Rs.5000 crore against commodities under management valued

over Rs.7,000 crore. These stocks of over 4 million MT are managed at 3000+

storage facilities spread at 700+ locations.

II. “NBHC CommGuard”:-

“NBHC CommGuard” offers a comprehensive range of high-quality,

environment-friendly, and customised pest management solutions. With licences in

17

http://www.mcxindia.com/

http://www.ftindia.com/

http://www.ftindia.com/

9 states and ports, its solutions in pest management, food safety and compliance

requirements offer optimal results to its clients.

III. “NBHC ProComm” :-

“NBHC ProComm” an integral part of the commodity ecosystem provides the

appropriate testing, inspection and grading & certification services.

IV. “NBHC Mandate”:-

“NBHC Mandate” performs audit and accreditation of warehouses/cold storages

and valuation of commodities. It also appraises the ways and means by which

resources may be deployed to achieve economy and efficiency of costs.

3.4 National collateral Management Services Ltd. :-

The National Collateral Management Services Limited (NCMSL) is the country's leading

organization providing a bouquet of services to manage risks across various stages of

commodity and inventory handling under a single umbrella. Incorporated in 2004, under the

provisions of the Indian Companies Act, 1956, NCMSL is a governed by an independent and

professional Board. Each of our promoters and shareholders are either reputed and leading

banks or organizations, viz . ACE Geneva, Bank of India, Canara Bank, Corporation Bank,

HAFED, Indian Bank, IFFCO, HDFC Bank, Karur Vysya Bank, NCDEX, Punjab National

Bank and Yes Bank. Our pan-India operations help us provide commodity handling and risk

management services to clients across the country. They are geared to handle operations

encompassing the sale, purchase, trading, and movement of commodities & inventories.

Each of their warehouses serve as commodity multi link points (CMPs) providing a package

of services, including dematerialization and materialization of physical stocks of

commodities, testing & certification and funding against warehouse receipts. They are present

in 12 states across India and our warehouses manage as many as 42 agricultural

commodities. NCMSL also offers storage services for non-agricultural commodities and

inventories.

Their warehouses are in the last stage for obtaining certification under ISO 9000 : 2001 for

our quality management systems.

18

Their services:-

i. Storage and preservation

ii. Procurement and supply chain

iii. Collateral management

iv. Testing and certification

v. Trade and commodity intelligence

vi. Wether Intelligence

vii. Crop intelligence

4. Other private players in warehousing:-

i. Hindustan Unilever Ltd. :- Head office at Banglore.

ii. Relience industries Ltd.:- Head office at Mumbai.

iii. Annapoorani Cold Storage (P) LTD :- Head office at Chennai.

iv. Memari Cold Storage PVT. LTD.:- West Bengal

v. Vihas Fasteners:- Head office at Mumbai.

5. Cold storage:-

India is the second largest producer of fruits in the world, producing 46.8 million tons of

fruits and accounting for 10% of the world's fruit production. It is also the second largest

producer of vegetables, producing 90.85 million tons of vegetables and accounting for 14%

of the world’s production. Apart from fruits & vegetables, India also produces about 20

million tons of root and tuber crops.

The post-harvest losses in perishables amount to 20-40% of the total production with a net

value of Rs. 50,000.00 - 60,000.00 million. These losses occur at several stages in the post-

harvest management viz harvesting, grading, packing, transport, storage and marketing. Since

the cost of conservation requires less expenditure than the production cost, it is better to put

more attention to the post harvest management of these perishables.

19

Ability to store scientifically without excessive losses enables farmers to negotiate with

forces of marketing for better prices. By storage and off-season sale, 20-50% more of the

price can be earned.

Refrigeration or low temperature storage can most effectively extend shelf -life of vegetable

and reduce post-harvest losses by arresting metabolic breakdown and fungal deterioration of

the commodity. Lack of capital to create and run the cold storage by individual farmer or

farming community limit the use of cold storage in developing countries like India.

Commodity wise capacity & no. of cold storage in India (31-12-2006):-

Table No. 5.1

Commodity Number Capacity State(max)

Potato 2853 16844872 UP & Uttaranchal

Fruit & Vegetable 144 77882 AP

Meat & Fish 482 184227 Maharashtra

Milk & Milk product 200 69947 Kerala

Multipurpose 1337 4492234 Maharashtra

Other 85 24824

Total 5101 21693986

Source: www.agmarknet.nic.in/commcold311207.htm

Graphical representation of number of cold storage for different commodities:-

Graph No.5.1

20

29921386

513 149Number of Cold Storage for various commodities

potatoes

Multi-purpose

Meat & Fish

Fruit & veg-eable

Percentage share in number of cold storage for different commodities :-

Graph No. 5.2.

59%

28%

10%3%

Number of Cold Storage for various commodities

potatoes

Multi-purpose

Meat & Fish

Fruit & veg-eable


Capacity of cold storage for different commodities:-

Graph no. 5.3

21


18.25

4.71

1.86 0.81

Capacity in Million tonnes of Cold Storage for various commodities

potatoes

Multi-purpose

Meat & Fish

Fruit & vegeable

Percentage share in capacity of cold storage for different commodities:-

Graph No. 5.4

71%

18%

7% 3%

Capacity of Cold Storage for various commodities

potatoes

Multi-purpose

Meat & Fish

Fruit & vegeable

Sector wise distribution of cold storage:-

Table No. 5.2

22



Sector wise distribution of cold storage

S.No. Sector Number Capacity in

million ton.

1 Private 4820 22.24

2 Cooperative 363 0.989

3 Public 133 0.100

Source: www.agmarknet.nic.in/sectorcold311207.htm

Graphical representation of sector wise distribution of cold storage:-

Graph No 5.5

90%

7% 3% Number

Private sector

cooperative sec-tor

Public Sector

Total = 5101

6. Rural godown scheme:-

6.1 Background:-

It is well known that the small farmers do not have the economic strength to retain the

produce with them till the market prices are favorable. There has been a felt need in the

country to provide the farming community with facilities for scientific storage so that

wastage and produce deterioration are avoided and also to enable it to meet its credit

23

requirement without being compelled to sell the produce at a time when the prices are low. A

network of rural godowns will enable small farmers to enhance their holding capacity in

order to sell their produce at remunerative prices and avoid distress sales. Accordingly,

Grameen Bhandaran Yojana, a Capital Investment Subsidy Scheme for Construction /

Renovation of Rural Godowns was introduced in 2001-2002 and extended up to 31.03.2007 .

The Scheme has now been approved for implementation during the years 2007–12.

6.2 Objective:-

The main objectives of the scheme include creation of scientific storage capacity with allied

facilities in rural areas to meet the requirements of farmers for storing farm produce,

processed farm produce and agricultural inputs; promotion of grading, standardization and

quality control of agricultural produce to improve their marketability; prevention of distress

sale immediately after harvest by providing the facility of pledge financing and marketing

credit; strengthen agricultural marketing infrastructure in the country by paving the way for

the introduction of a national system of warehouse receipts in respect of agricultural

commodities stored in such godowns and to reverse the declining trend of investment in

agriculture sector by encouraging private and cooperative sectors to invest in the creation of

storage infrastructure in the country.

6.3 Salient feature:-

Godown cannot be in the limit of Municipal Corporation.

Subsidy will be given if minimum capacity is 100 tones and max. is 10,000 tones.

Subsidy under the scheme is linked to institutional credit only.

33.33% in case of projects located in North – Eastern States, Women Farmers/ their

self help groups / co-operatives and SC/ST entrepreneurs & their self-help groups/

Co-operatives.

25% to all categories of farmers (Other than Women Farmers), agriculture

graduates, cooperatives and State/ Central Warehousing Corporations.

15% to all other categories of individuals, companies & corporations etc.

7. Warehouse Receipt: -

Warehouse Receipts are documents issued by warehouses to depositors against the

commodities deposited in the warehouses, for which the warehouse is the bailee. Warehouse

24

Receipts may be either non-negotiable or negotiable. These documents are transferred by

endorsement and delivery. Either the original depositor or the holder in due course

(transferee) can claim the commodities from the warehouse.

7.1 News related to warehouse receipt:-

7.2 Map of product, receipt, and credit transaction:-

25

Product, Receipt and Credit

Transaction

warehouse

Bank

Inspection and licensin

g Co.

Insurance Co.

Farmer

Exporter/ Wholeseler or processor

Traders and Farmer

organization

Receipt

Credit

Trade CreditProduct

7.3 Benefits of Warehouse Receipts:-

7.3.1 Warehouse Receipts provide farmers with an instrument that allows them to extend the

sales period of modestly perishable products well beyond the harvesting season. That way,

the farmer does not need to sell the product immediately to ease cash constraints

7.3.2. The availability of secure Warehouse Receipts may also allow owners of inventories to

borrow abroad in currencies for which real interest rates are lower, particularly if loans are

made against inventories of an export commodity, thereby hedging against the foreign

exchange risk of foreign borrowing.

7.3.3. Correctly structured Warehouse Receipts provide secure collateral for banks by

assuring holders of the existence and condition of agricultural inventories "sight unseen."

Warehouse Receipts can be used by farmers to finance their production, and by processors to

finance their inventories.

7.3.4 Warehouse Receipts contribute to the creation of cash and forward markets and thus

enhance competition. They can form the basis for trading commodities, since they provide all

the essential information needed to complete a transaction between a seller and a buyer.

7.3.5. A Warehouse Receipt system provides a way to reduce the need of government

agencies in procurement of agricultural commodities.

7.3.6. Warehouse Receipts can be combined with price-hedging instruments. This

combination provides lenders with secure collateral, in the form of Warehouse Receipts, and

puts a minimum value on it, through the hedging operation.

8. References:-

• Hand book of agriculture

• http://fcamin.nic.in

• www.indiastat.com

• www.cewacor.nic.in

• http://fciweb.nic.in

• www.nbhcindia.com

• http://www.ncmsl.com

• http://agmarknet.nic.in

26

Warehouse & Storage Industry of India

Documents

storage capacities

storage conditions

prolonged storage

largescale storage

storage space

storage of food grains

tonnes of storage capacity

adequate storage capacity