Day 13 – Q 4.Critically assess the storage and transportation infrastructure in the farm sector. What measures have been taken by the government to address the existing impediments.
4. Critically assess the storage and transportation infrastructure in the farm sector. What measures have been taken by the government to address the existing impediments.
कृषि क्षेत्र में भंडारण और परिवहन बुनियादी ढांचे का समलोचनात्मक आकलन करें। मौजूदा बाधाओं को दूर करने के लिए सरकार ने क्या उपाय किए हैं?
India is an agrarian Economy. The Indian agriculture sector accounts for 18 per cent of India’s gross domestic product (GDP) and provides employment to 50% of the countries workforce.
Currently, India is the major producer of many fresh fruits, vegetables, milk, fibrous plants. India is the world’s largest producer of pulses, rice, wheat and spices. Despite being a mega producer of so many farm produce, India lacks terribly in transport and storage infrastructure which provide value addition to the produced.
Issues related to Storage and Transportation Infrastructure:
- Regional Disparity of Storage Capacity: The CAG report revealed serious imbalances in the availability of storage capacity and a huge shortage of storage space in consuming states:
- Out of the total of 336.04 LMT of storage space available with FCI, 64% was located in the large procurement states like Punjab, Haryana, Andhra Pradesh, Uttar Pradesh and Chhattisgarh;
- Only 13% of the total capacity of FCI was with the consuming states of Rajasthan and Maharashtra.
- The remaining capacity of 23% was being shared by the other 24 states/UTs
- Inadequate infrastructure for storage: There is a gap between agri-warehousing supply and demand at 35 mn MT.
- Low Private investment: Due to low returns on investment, this sector is less attractive to private companies.
- The skewed distribution of capacity: Skewed distribution of this capacity is another issue, with North India having access to 60% of the total storage infrastructure.
- Lack of cold storage infrastructure: India’s current cold storage capacity at 31 MT is barely sufficient for fruit and vegetables produced in the country. Most existing cold storages are single commodity storages, resulting in their capacities lying idle for up to six months a year. The cold-chain infrastructure is also unevenly distributed among states.
- The poor condition of storage facilities: Warehouses infrastructure having the poor built quality which may sometime lead to water percolation through ceiling and walls, which damage the produced.
- Poor road connectivity: Road connectivity is weak, especially in hilly areas. Poor maintenance of rural roads is a major constraint as well. Linkages with local and feeder roads remain sub-optimal. This unable farmer to connect to the market. Especially in case of a perishable item, it causes huge loss to farmers.
- Minimum use of rail freight: About 1.9 per cent of the perishable fruits and vegetables are transported through rail, while 97.4 per cent of the produce is transported through roads. This ratio needs to shift in favour of the rail network.
- Cost: The transportation and storage cost in India is very high compared to developed countries. High cost reduces the competitiveness of Indian agricultural produce both in domestic as well as the export market.
- Lack of refrigerated Trucks: Low investment is seen in refrigerated trucks which is a must for cold storage logistics.
Measures were taken by the Government:
Government has taken many initiatives to strengthen the storage and transportation infrastructure such as:
- Inclusion of agri-warehousing under priority sector lending by RBI.
- The tax incentive is given to private players so they take an active interest in this sector.
- Subsidy schemes for farmers to access privately owned warehouses.
- The Warehousing Act which will promote negotiability of warehousing receipts.
- The Private Entrepreneur Guarantee Scheme to incentivize private investment for construction of warehouses by private entrepreneurs, with an FCI guarantee to hire them for 10 years, assuring a fair return on investment by the entrepreneur.
- PM-Gram Sadak Yojna: To connect the hinterlands for better transport connectivity.
- Operation Greens: In the budget speech of 2018-19, a new Scheme “Operation Greens” was announced to promote agri-logistics, processing facilities and professional management. But it is only to seek to stabilize the supply of Tomato, Onion and Potato (TOP) crops, excluding other farm produce.
Unless some very drastic measures are taken to improve the storage capacity of food grains, the wastage of food grains cannot be curbed which otherwise could be utilized for feeding millions of poor people and to achieve SDG 2. Moreover, the development of storage and transportation infrastructure is a prerequisite for Doubling farmers’ income by 2022.