REPORT

ON

Warehouse and storage

Industry

Shailendra singh rathore

MBA(ab)

INSTITUTE OF AGRI BUSINESS MANAGEMENT

RAJASTHAN AGRICULTURAL UNIVERSITY
BIKANER-334001

1
 S.NO CONTENTS PAGE
. NO.

1 Introduction 3

2 Current scenario 4

Major Players :-
3.1 Food Corporation of India
3.2 Central Warehouse Corporation
3 6
3.3 State Warehouse Corporation
3.4 National Bulk Handling Corporation Ltd.
3.5 National collateral Management Services Ltd.

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%

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.

3
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.

1. 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.

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.

4
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.
Graph No. 2.1

Graph No. 2.2

2. Major Player:-

Public sector:-

Food Corporation of India

Central Warehousing Corporation

State warehousing Corporation

Private sector:-

National Bulk handling corporation Ltd.

National collateral Management Services Ltd.

3.1 Food Corporation of India:-

TheSource:
Food Corporation of India was set up under the Food Corporation Act 1964 and on 14th
indore.nic.in/GIM/PDF/5-Integrated_Warehousing_Hub.pdf

January, 2006, FCI completed 41 years of its existence, in order to fulfil following objectives
of the Food policy:
Source: indore.nic.in/GIM/PDF/5-Integrated_Warehousing_Hub.pdf
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

5
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.

State wise storage Capacity (Owned, Hired/Covered and CAP) of Godowns of FCI in
India:-
Table No. 3.1
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)

Zo State Covered CAP Gr Tot Util

ne s/UTs an al isa-
FCI Hired Ow Hi To d Sto tion
Ow ned re tal Tot cks (%
ned St C S Pri To Tot d al Age
at W W vat tal al )
e C C e Hir Cov
Go Par ed ere
vt. ties d

Ea Bihar 3.6 0. 0.5 0.5 0.4 1.6 5.26 0 0 0 5.2 1.7 16

6
st 6 03 9 8 6 1

Jharkh 0.6 0 0.1 0.1 0.2 0.5 1.18 0 0 0 1.1 0.5 33

and 6 1 8 3 2 8 6

Orissa 2.9 0 0.4 2.5 0.1 3.1 6.11 0 0 0 6.1 3.0 47

3 8 5 5 8 1 8

West 8.6 0. 0.5 0 0.5 1.3 9.98 0 0 0 0.9 2.6 50

Bengal 4 23 5 6 4 8 2

Sikkim 0.1 0. 0 0 0 0.0 0.11 0 0 0 0.1 0.0 26

01 1 1 6

Total 15. 0. 1.6 3.3 1.4 6.6 22.6 0 0 0 22. 8.0 56

99 27 4 2 2 5 4 64 3

No Assam 1.9 0. 0.1 0.0 0.3 0.5 2.55 0 0 0 2.5 0.8 35

rth 9 02 7 7 6 5
-
Ea Arunch 0.1 0 0 0 0 0 0.18 0 0 0 0.1 0.0 31
st al 8 8 2
Prades
h

Megha 0.1 0 0.1 0.0 0 0.1 0.3 0 0 0 0.3 0.2 11

laya 4 1 5 6

Mizora 0.1 0. 0 0 0 0.0 0.18 0 0 0 0.1 0.0 90

m 7 01 1 8 9

Tripur 0.2 0. 0.0 0 0 0.1 0.34 0 0 0 0.3 0.1 50

a 2 05 7 2 4 9

Manip 0.2 0. 0 0 0 0.0 0.22 0 0 0 0.2 0.0 56

ur 02 2 2 5

Nagala 0.2 0 0.1 0 0 0.1 0.3 0 0 0 0.3 0.1 23

nd 4

Total 3.1 0. 0.3 0.1 0.3 0.9 4.07 0 0 0 4.0 1.4 47

1 8 2 7 7 7 9

No Delhi 3.3 0 0 0 0 0 3..3 0.3 0 0.3 3.7 1.1 37

rth 6 6 4 4 8

Harya 7.7 3. 1.8 3.9 1 10. 18.4 3.1 0 3.1 21. 8.2 32
na 89 8 9 76 6 7 7 63

Himac 0.1 0. 0.0 0 0 0.1 0.27 0 0 0 0.2 0.2 38

hal 4 06 7 3 7 1
Prades
h

Jamm 0.9 0. 0 0 0.1 0.2 1.21 0 0 0 1.2 0.7 78

u& 6 15 5 1 8
Kashm
ir

Punjab 21. 0. 0.6 32. 2.7 35. 57.4 6.3 0. 6.4 63. 33. 64
84 02 32 1 65 9 3 12 5 94 32

Chandi 0.4 0 0.4 0.2 0 0.6 1.02 0.0 0 0.0 1.1 0.8 52
garh 1 1 2 8 8

Rajast 7.0 0 0.1 0 0.1 0.2 7.35 1.5 0. 1.7 9.1 3.7 73
han 6 3 6 9 8 19 7 2 4

Uttar 14. 0. 1.8 4.0 0.2 6.1 21.1 4.1 0 4.1 25. 5.8 41
Prades 96 09 2 4 5 1 9 9 3
h

Uttara 0.6 0. 0.2 0.4 0.0 0.8 1.47 0.0 0. 0.1 1.5 0.7 23

7
 nchal 6 1 3 3 5 1 9 02 1 8 1

Total 57. 4. 5.1 40. 4.2 54. 111. 15. 0. 16. 12 54. 45
08 31 4 99 2 66 74 78 33 11 7.8 74
5

So Andhr 12. 0 2.3 17. 0 20. 32.8 1.9 0 1.9 34. 16. 48
ut a 73 9 77 16 9 7 7 86 78
h Prades
h

Kerala 5.1 0 0 0 0 0 5.12 0.2 0 0.2 5.3 2.2 41

2 1 1 3 1

Karnat 3.7 0 0.3 0.4 0 0.8 4.55 1.3 0 1.3 5.9 2.1 37
aka 3 8 4 2 7 7 2 7

Tamil 5.8 0 0.8 0.3 0 1.1 6.96 0.6 0 0.6 7.5 4.5 65
Nadu 3 3 3 6 2

Pondic 0.4 0 0 0.0 0 0.0 0.44 0.0 0 0.0 0.5 0.1 37

herry 2 2 2 8 8 2 9

Total 27. 0 3.5 18. 0 22. 49.9 4.2 0 4.2 54. 25. 48
83 7 56 13 6 3 3 19 87

W Gujara 5 0. 0.4 0 0 0.5 5.56 0.4 0 0.4 6.0 3.5 59

est t 14 2 6 9 9 5 6

Mahar 11. 0. 0.7 0.9 0.4 2.4 14.2 1.4 0 1.4 15. 5.4 35
ashtra 77 26 5 6 9 6 3 2 2 65 6

Goa 0.1 0 0 0 0 0 0.15 0 0 0 0.1 0.0 33

5 5 5

Madhy 3.3 0 0.5 0.7 0.3 1.6 4.99 0.3 0 0.3 5.3 3.6 68
a 7 5 7 2 6 6 5 6
prades
h

Chhatt 5.1 0. 0.2 1.9 0.0 1.3 6.43 0.0 8. 8.6 15. 12. 86
isgarh 2 03 6 7 5 1 5 57 2 05 93

Total 25. 0. 1.9 2.6 0.9 5.9 31.3 2.3 8. 10. 42. 25. 61
41 43 3 8 1 5 6 2 57 89 25 66

India 12 5. 12 65 6.9 90 219 22. 8. 31 25 11 46

9.4 11 .6 .6 2 .3 .77 33 9 .2 1 5.7
1 6 7 6 3 9

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.

8
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.

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.

9
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. 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: -

Table no: 3.2.1

(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

10
 31-03-2006 80.22 20.15 100.37

31-03-2007 83.25 18.95 102.70

Source: www.indiastat.com

Graphical representation of growth in storage capacity of CWC:-

Graph No: 3.2.1

Source: www.indiastat.com

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

Capacity Utilization by CWC:-

Graph No: 3.2.2

Source: www.indiastat.com

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)

11
 Year Rate Effective date

1957-58 0.18* 1.1.1958

1970-71 0.25

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 -

Source: www.indiastat.com

12
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 Capacity in Lakh Total

Centers Tonnes

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

13
 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

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

Source: www.indiastat.com
Graphical representation of growth in storage capacity of SWCs:-

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

14
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
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

15
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.

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.

16
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.
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

17
Graphical representation of number of cold storage for different commodities:-
Graph No.5.1

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

Graph No. 5.2.

Capacity of cold storage for different commodities:-

So u rc:e w w w .a
Graph no. 5.3

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

Graph No. 5.4

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

Sector wise distribution of cold storage:-

Table No. 5.2

Sector wise distribution of cold storage

S.No. Sector Number Capacity in

million ton.

1 Private 4820 22.24

2 Cooperative 363 0.989

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

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

18
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
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.

19
 • 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
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:-

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

20
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

21