Bumper wheat produce may face rotting

With only a few days to go before farmers begin to harvest what is expected to be the country's highest ever wheat crop, the threat of large quantities of grain rotting yet again because of inadequate storage facilities looms large.

The union ministry of agriculture had in early February estimated that the 2010-11 harvest of foodgrains will be, at 2,321 lakh tonnes, the second highest of all time. Of this, the rice harvest was estimated at 940 lakh tonnes and wheat at 815 lakh tonnes, a record.

Additionally, sources in the ministry of food and consumer affairs told TOI that the harvest predictions were likely to be further revised upwards, as late rains and the late frost in Madhya Pradesh had not had as damaging an effect on the winter wheat crop as feared. Indeed, just six days into its procurement season, Madhya Pradesh is already reporting that its storage capacities are swamped. Wheat harvests in most other states are expected to begin after Holi and procurement from April 1 on.

However, this bumper harvest is likely to pose significant storage challenges. As of mid-February, the total effective capacity available for storage stood at less than 300 lakh tonnes of which more than 75% was in use. The governments foodgrain procurement target for the upcoming season is of 263 lakh tonnes. This is only an indicative target and can rise if harvests are higher.

In August last year, several newspapers reported that thousands of tonnes of grain were rotting in the open in Punjab and other states because of insufficient godown facilities. Over the last ten years, 10 lakh tonnes of foodgrains have rotted in FCI godowns. An incensed Supreme Court, while hearing an ongoing PIL on various food security-related issues filed by the Peoples Union for Civil Liberties, ordered the government to distribute the grain free if they were not able to store it.

However, the government is confident it can meet the challenge. We are getting a good response to our Private Entrepreneur Guarantee scheme. We will get 50 lakh tonnes of space within three months, K V Thomas, minister of state for food and consumer affairs (independent charge), told TOI. More space can be hired at the time of procurement if needed, Thomas added. There was a problem of 70,000 tonnes of foodgrain that rotted last year and this should not happen, but this is only 0.08% of the total grains procured, Thomas said.

The space for foodgrain storage is made available to the FCI through its own godowns and those hired by state governments, the Central Warehousing Corporation, State Warehousing Corporations and private parties. 10% of the total storage space is Cover And Plinth, i.e. it is not covered on all sides, and has been criticized in the past by experts and the Supreme Court as being inadequate.

Roughly half of the total space is owned by the FCI. This proportion is declining and there has been a very slow rate of increase in the FCIs storage capacity. It was able to add only 28,000 tonnes of constructed space (1% of the total) between 2007 and 2010. Nor is there likely to be much increase in space constructed by the FCI itself: The labour laws that one has to follow with the FCI, i.e. full employment instead of short-term contract jobs, makes it not very profitable for the government to have the FCI involved in construction. We would prefer to rent from private parties, said a senior official in the ministry of food and consumer affairs on condition of anonymity. Budgetary allocations to the FCI have also been declining.

For several years now, the union government has been trying to get private parties to construct godowns instead, which it could then hire. Faced with a poor response from the private sector which found the conditions too stringent, the government raised the period for which it would guarantee to hire the space from five to seven to now ten years, and several restrictions were dropped. The government has sanctioned the creation of 150 lakh tonnes of additional storage. But as of end-February 1.13 lakh tonnes of storage space, or less than 1% of this, was constructed.

Experts like agricultural economist M S Swaminathan have long said that the storage problem can be easily fixed by the government using decentralized solutions, and have described the handing over storage facilities to the private sector as a potential national disaster. Chhattisgarh, for instance, discarded the PPP model and authorized district collectors to build warehousing space with great results, said Biraj Patnaik, principal adviser to the office of the Supreme Court commissioners on food security, who worked closely with the Chhattisgarh government on its PDS reform.