How Warehousing Reforms Impact Agri Growth & Resilience

In light of the recent announcement by Union Minister Anurag Thakur about introducing the ‘world’s largest food grain storage plan’ with warehouses in every block across the country under cooperative societies, it becomes essential to assess and emphasise the role of warehousing reforms for agricultural growth.

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According to the annual report published by the Ministry of Agriculture and Cooperation, the agriculture and allied sector engages 54.6 per cent of the total workforce (Census 2011) and contributes 18.6 per cent to India's gross value added (GVA) at current prices during 2021-22

The production trend in India also indicates positive growth with foodgrain production estimated at 315.72 million tonnes, an increase of 4.98 million tonnes compared to 2020-21.

Pulses production during 2021-22 reached a record 27.69 million tonnes, exceeding the last five years' average, by 3.87 million tonnes, and oilseeds production hit a record 37.70 million tonnes, up by 1.75 million tonnes from 2020-21.

While the upward trend in production is promising for an agrarian nation, it also poses the challenge of having sufficient infrastructure to support such growth. Achieving self-sufficiency requires an ample supply of well-equipped warehouses to handle the increased production.

Studies by Chaturvedi and Raj (2015) reveal that India experiences post-harvest losses of foodgrains as high as 12 to 16 million tonnes annually, amounting to Rs 50,000 crore per year (Singh, 2010)

This highlights the significance of warehousing in preventing losses and ensuring efficient storage and distribution of agricultural produce. The importance of warehousing was recognised as early as 1928 in India, when the Royal Commission on Agriculture mentioned it in its report. All India Rural Credit Survey, in 1954, recommended the creation of storage facilities near production areas to minimise post-harvest losses. However, even after a century, the state of warehousing in India remains far from desired.