Introduction

The United Nations values the important role cooperatives play in social development. In 1995, the world summit for social development held in Copenhagen had recognised the importance of cooperatives in its people-centred approach to development. It agreed to utilise, and develop fully the potential and contribution of cooperatives for the attainment of social development goals, in particular, the eradication of poverty, the generation of full and productive employment, and the enhancement of social integration.

The Government of India on May 31, 2023 had approved the world’s largest grain storage plan in the cooperative sector in order to address the shortage of food grain storage capacity in the country. The Plan is being rolled out as a pilot project in different states/UTs of the country.

The plan entails creation of various agri infrastructure at PACS (Primary Agricultural Credit Society) level, including setting up:

1. Decentralised godowns;
2. Custom hiring centres;
3. Processing units;
4. Fair Price Shops, etc.

This is sought to be achieved through the convergence of various existing schemes of the Government of India, such as:

1. Agriculture Infrastructure Fund (AIF);
2. Agricultural Marketing Infrastructure Scheme (AMI);
3. Sub Mission on Agricultural Mechanization (SMAM);
4. Pradhan Mantri Formalization of Micro Food Processing Enterprises Scheme (PMFME), etc.

Under these Schemes, PACSs can avail subsidies and interest subvention benefits i.e, reduced interest rate, for construction of godowns/storage facilities and setting up of other agri infrastructure.

Nabard is also extending financial support to PACS by refinancing them at highly subsidised rates of around 1 % after incorporating the benefits of 3% interest subvention under AIF scheme for projects up to Rs. 2 Crore.

The plan aims to strengthen the economic condition of PACSs by diversifying their business activities and giving them additional sources of revenue thereby improving their financial sustainability.

Implementation of the pilot project

The Pilot project is being implemented by National Cooperative Development Corporation with the support of:

1. National Bank for Agriculture and Rural Development;
2. Food Corporation of India;
3. Central Warehousing Corporation;
4. NABARD Consultancy Services;
5. National Buildings Construction Corporation, etc. in different States/ UTs.

Consultancy support is also being extended to PACS through these agencies under the project.

In order to ensure accountability and smooth, effective and transparent implementation of the plan, the Ministry of Cooperation has constituted an inter-ministerial committee, authorised to modify guidelines/ implementation methodologies of the schemes identified for convergence, as and when need arises.

A National Level Coordination Committee has been constituted having members from Ministry/ Departments, Central Government agencies concerned, to steer the overall implementation of the Plan and reviewing the progress of implementation, etc.

Monitoring the implementation of the project

To monitor the implementation of the project and to ensure its seamless integration with the existing policies/ programmes at the state level, state cooperative development committee at state level and district cooperative development committee in each district of the state/UT have been constituted.

To ensure full capacity utilisation of the storage capacity being created at PACS level under the project, an MoU has been signed between:  

1. The Ministry of Cooperation,
2. The Department of Food and Public Distribution,
3. The Food Corporation of India, and;
4. The National Cooperative Development Corporation.

This is expected to;

1. Facilitate hiring of godowns constructed at PACS level by FCI, and;
2. Integration of these godowns with the supply chain of foodgrains, thereby providing requisite forward and backward market linkages to PACS.

PACS identified & Progress under the pilot project

States/ UTs and National level Cooperative Federations, like National Cooperative Consumers Federation and National Agricultural Cooperative Marketing Federation of India Ltd., have identified 2000 PACS for creation of storage capacity under the Pilot Project. Presently, construction of godowns is at various stages in 13 PACS of 13 States/ UTs under the Pilot Project.

Epilogue

Establishment of decentralised storage capacity at PACS level would:

1. Reduce post-harvest losses by creating sufficient storage capacity in the country.
2. Prevent distress sale of crops by farmers and enable them to realise better prices for their crops.
3. Since PACS would be operating as Procurement Centres as well as Fair Price Shops, the cost incurred in transportation of food grains to procurement centres and again transporting the stocks back from warehouses to FPS would also be saved.

The project will provide various benefits to the farmers, including:

1. Farmers will be able to store their produce in the godown constructed at PACS and avail bridge finance for the next cycle of crop, and sell the produce at a time of their choice, or sell their whole crop to the PACS at Minimum Support Price (MSP), which would enable them to avoid distress sale of crops.
2. Farmers will be able to get various agri inputs and services at the Panchayat/ village level itself.
3. Through diversification of business, farmers will be able to get additional sources of income.
4. Through integration with the food supply management chain, farmers will be able to expand their market size and realise better value for their produce.
5. Creation of adequate food grain storage capacity at PACS level will help in the reduction of post-harvest loss, thus enabling farmers to earn better prices.

In addition, the Plan would help in ensuring food security at Panchayat/ village level across the country, thereby benefiting the consumers.

Farmers were so far forced to bear losses due to lack of storage infrastructure in the country. The problem is now being addressed through PACS under this plan. Under the world’s largest food grain storage project, 700 lakh tonnes storage capacity will now be created in the next 5 years. The government has also Plans to computerise the PACS. Computerisation of PACSs is expected to bring transparency by modernising the PACS.

The novel plan to involve PACS in agri infrastructure creation is a part of the Modi government’s vision of rejuvenating the cooperative sector and empowering the farmers.

END OF ARTICLE