Importance of February Edition – Food Storage Infrastructure

• Understanding food storage infrastructure from the February 2023 Kurukshetra summary is vital for UPSC aspirants.
• It delves into India’s food grain production achievements and the necessity of robust storage facilities.
• Highlights the importance of maintaining food security and sustaining India’s position as a leading food grain exporter.
• Provides insights into traditional storage structures and practices prevalent across different regions of India.
• Emphasizes the significance of these indigenous practices in preserving grains without resorting to harmful chemical preservatives.
• Mastery of this information enriches understanding of agricultural practices, rural development, and national food security policies.
• Crucial for tackling questions related to agriculture, rural development, and food security in the UPSC examination.

1. Shaping Sustainable Food Systems with Storage Infrastructure – A Path way to Viksit Bharat

Overview of Indian Agriculture

• India’s agriculture sector has undergone a remarkable transformation, transitioning from a food deficit to a surplus economy and emerging as a key exporter of agricultural produce globally.
• With the second-largest agricultural land in the world, India boasts over 200 countries in its export basket, contributing significantly to the global food market.
• The country has experienced substantial growth in food production over the last decade, with production increasing from 244 million tonnes in 2010-11 to 310 million tonnes in 2021-22.

Vision for Development: Viksit Bharat by 2047

• India aims to achieve the status of a developed nation, termed Viksit Bharat, by 2047, coinciding with the centenary year of its Independence.
• This vision encompasses economic growth, social progress, environmental sustainability, and good governance, with agriculture playing a pivotal role.

Challenges of Food Loss and Waste

• Globally, around 14% of the world’s food, valued at $400 billion annually, is lost post-harvest before reaching consumers.
• A further 17% of food is wasted in retail and by consumers, with food loss and waste accounting for 38% of total energy usage in the global food system.
• In India, the economic value of quantitative losses of major crops/commodities amounts to Rs. 92,651 crore, highlighting the need for improved storage infrastructure.

Government Initiatives and Policies

• The Indian government has launched various schemes to enhance storage infrastructure and strengthen food systems, including the Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure Scheme (AMI), and others.
• The Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) is the world’s largest social welfare scheme, aiming to provide free food grains to approximately 81.35 crore beneficiaries over five years starting from January 1, 2024.

Current Status of Food Grain Production and Storage Capacity

• During 2022-23, total food grain production in India reached a record high of 329.68 million tonnes, exceeding the previous year’s production by 14.1 million tonnes.
• However, India faces a significant shortage of storage capacity, with total production at 311 million tonnes and storage capacity at only 145 million tonnes, resulting in a shortfall of 166 million tonnes.

Government Efforts to Address Storage Capacity Shortage

• To mitigate the storage capacity shortage, the government approved the ‘World’s Largest Grain Storage Plan in Cooperative Sector’ as a pilot project in various states/UTs.
• This initiative involves the creation of agri infrastructure at the Primary Agricultural Credit Societies (PACS) level, including decentralized godowns, processing units, and fair price shops, supported by subsidies and interest subvention benefits.

Role of Cold Storage Infrastructure

• Cold storage infrastructure is crucial for preserving perishable food commodities, with the Integrated Cold Chain and Value Addition Infrastructure scheme creating a capacity of 8.38 lakh MT.
• Increasing cold storage capacity is vital for achieving sustainable food systems and addressing post-harvest losses, particularly in sectors like fisheries, eggs, fruits, and vegetables.

Contributions to Sustainable Development Goals

• Improved food grain storage infrastructure directly contributes to achieving the Sustainable Development Goal of zero hunger, aiming to end hunger, malnutrition, and double agricultural productivity.
• Advancements in storage infrastructure also align with target 12 of sustainable consumption and production, supporting India’s commitment to sustainable development.

Way Forward

• Promoting decentralized local storage systems can reduce food grain wastage, strengthen food security, and prevent distress sales by farmers.
• Increased investment in modernization of warehousing, logistics, cold chain, food processing, and integrated value chain development is essential for achieving the goal of becoming a developed nation and meeting Sustainable Development Goals.

2. Warehousing: Changing Gears To Meet Present Challenges

Introduction:

• The article discusses the evolving role of warehouses in supply chains, focusing on challenges faced by farmers post-harvest, particularly liquidity issues.

Warehouse Receipt System (WRS) – Overview:

• Warehouse Receipts (WRs) serve as crucial documents representing stored goods, facilitating trade and finance.
• Key participants in a good WRS include depositors (farmers), warehousemen, financial institutions, regulators, etc.
• The importance of negotiable warehouse receipts (NWRs) is emphasized for enabling finance against stored goods.

Challenges Faced by Farmers:

• Farmers often encounter liquidity problems post-harvest, leading to distress sales and reduced profits.
• Despite increased credit flow in agriculture, post-harvest finance remains low, prompting immediate selling after harvest.

Role of Negotiable Warehouse Receipts (NWRs):

• NWRs enable farmers to obtain loans from banks using stored goods as collateral, addressing liquidity issues.
• However, lack of negotiability and trust in warehouse receipts hinder their usage in finance, necessitating the introduction of NWRs.

Warehouse Receipt System (WRS) Participants:

• Depositors bring goods to warehouses, expecting benefits like reduced losses and access to credit.
• Warehousemen receive, test, and store goods, ensuring their safety and quality.
• Financial institutions provide loans against warehouse receipts, marking lien over NWRs.
• Insurance companies offer coverage for goods stored in warehouses.
• Regulators oversee WRS activities, ensure compliance, and resolve disputes.

Warehousing (Development & Regulation) Act, 2007:

• The act established the Warehousing Development and Regulatory Authority (WDRA) to regulate warehouse operations.
• It mandated the compulsory registration of warehouses issuing NWRs with WDRA and defined liabilities, duties, and mandatory particulars of warehouse receipts.
• The act provided a legal framework for NWRs, making them prime instruments for trade and finance.

Achievements of WDRA:

• Over 5,000 registered warehouses as of December 2023, indicating significant participation in the WRS.
• Increased loaning against electronic NWRs, with notable initiatives by banks like State Bank of India, showcasing growing confidence in the system.
• WDRA’s regulation enhances trust in warehouse receipts and encourages professionalization of the warehouse industry.

Conclusion:

• WDRA’s regulation has established an effective WRS based on NWRs in India, leading to reduced post-harvest losses, improved price realization for farmers, and enhanced efficiency in warehouse operations.
• Challenges remain, including the need for better infrastructure and increased warehouse registration with WDRA.
• Overall, WDRA’s regulatory ecosystem contributes to a healthier agricultural sector and business climate.

3. Institutionalised Management of Food Security

Introduction:

• India’s population stands at approximately 1.40 billion, accounting for 17.5% of the global population.
• The Government of India operates the Pradhan Mantri Garib Kalyan Ann Yojana (PMGKAY), providing free food grains to around 81.35 crore individuals nationwide.
• Historically, India was a food-deficit nation, relying on imports, particularly from the United States under PL-480 agreements.
• The ‘Green Revolution’ was initiated to bolster food production through the adoption of high-yielding seeds and technological advancements in agriculture.

Mandates and Operations of FCI:

• The Food Corporation of India (FCI), established in 1965, is mandated to provide remunerative prices to farmers, supply food grains to vulnerable sections at affordable rates, maintain buffer stock reserves, and intervene in markets for price stabilization.
• Constant enhancement of operations, particularly in transportation and distribution, is crucial to fulfill these mandates.

Storage Operations for Food Grains in Central Pool:

• Proper storage is essential for preserving the quality of agricultural produce for future consumption.
• Non-perishable food grains like wheat and rice can be stored for 1 to 4 years.

Preservation Techniques:

• FCI conducts regular inspections by trained professionals to classify, categorize, disinfect, and ensure the fitness of stored food grains.
• Infestation prevention is achieved through prophylactic treatment with malathion and deltamethrin and curative treatment through fumigation with aluminum phosphide.

Storage Capacity in Central Pool:

• As of 2023, FCI possesses a storage capacity of 761.29 lakh MT across approximately 2000 locations, marking a substantial increase from 6.18 lakh MT at its inception.
• FCI owns 363.69 lakh MT of storage capacity, with state government agencies accounting for the remaining 397.60 lakh MT.

Transportation and Distribution of Food Grains:

• Surplus food grains from producing states are transported to deficit states to ensure equitable distribution.
• FCI employs a multimodal transportation approach utilizing railways, roadways, and waterways.
• Wheat is typically transported from Punjab, Haryana, and Madhya Pradesh, while rice is transported from various states to meet demand across the country.
• Food grains are also stored in local godowns before reaching Fair Price Shops (FPSs) nationwide through state government agencies.

Technology Integration and Reduction in Losses:

• FCI has integrated digital systems like the Depot-on-Line System (DoS) and GPS-enabled Vehicle Tracking System (VLTS) to enhance accuracy and efficiency.
• Linking rice mills with individual depots/warehouses and allocating space for transparency in procurement through WINGS have contributed to improved supply chain management.

Conclusion:

• FCI’s food supply chain ensures food security for all citizens across the country, establishing it as the world’s most extensive food system.
• Ongoing efforts to modernize operations and involve stakeholders are crucial for improving efficiency and effectiveness.

4. Mega Food Storage Plan

Introduction:

• India is the second-largest producer of food grains globally, with an annual production of about 3,100 lakh tonnes.
• However, the country’s food grain storage capacity of 145 MMT falls short of the total production of 311 MMT, leaving a gap of 166 MMT.
• India processes only 7% of its perishables, compared to 65% in the USA and 23% in China, leading to significant postharvest losses.

Need for Mega Plan:

• India’s vast population, accounting for 18% of the global population, and limited cultivable land necessitate a robust network of food grain storage facilities.
• The National Food Security Act, 2013, covers about 81 crore people, highlighting the importance of ensuring food security for the population.
• The Mega Plan aims to enhance food grain storage capacity by 70 MMT in the cooperative sector through integrated grain storage facilities.

Implementing Agencies:

• The National Cooperative Development Corporation, supported by NABARD, NABARD Consultancy Services, Central Warehousing Corporation, and the Food Corporation of India, is executing the pilot project across 24 PACS in different States/UTs.

Benefits of Implementation:

• Augmentation of storage facilities will reduce transportation costs for farmers, enabling them to maximize profits and make informed selling decisions based on market conditions.
• Modern silos with computerized real-time monitoring systems will strengthen food security, reduce import dependence, and create rural employment opportunities.
• Strengthening cooperatives aligns with the vision of ‘Sahakar se Samriddhi’ and empowers PACS, playing a significant role in the agricultural and rural landscape.

Challenges Ahead:

• Conflict with Farmer Producer Organizations (FPOs) may arise due to overlapping roles in post-harvest handling.
• Managing and maintaining infrastructure poses significant challenges despite their creation.
• Poor-quality storage infrastructure with primitive technologies affects food quality management and distribution under the Public Distribution System (PDS).
• Multiplicity of institutions with crosscutting objectives may dilute effectiveness, and policies may inadvertently favor medium and large farmers.

Possible Solutions:

• Implementing the scheme in a Public-Private Partnership mode could enhance efficiency and sustainability.
• Prioritizing modernization of existing storage infrastructure and providing adequate facilities for horticultural crops is essential.
• Finding practical solutions to remove hurdles is necessary, considering the substantial value of food losses amounting to over Rs. 1,40,000 crore annually.

Conclusion:

• The Mega Plan addresses India’s pressing need for enhanced food grain storage capacity to ensure food security for its vast population.
• Implementation challenges such as conflicts with FPOs, infrastructure management, and food quality management need to be addressed through innovative solutions.
• Prioritizing modernization, leveraging public-private partnerships, and aligning policies with the needs of small and marginal farmers are crucial steps toward achieving a more efficient and sustainable food storage infrastructure in India.

5. Entrepreneurial Opportunities in Food Storage Infrastructure

Introduction:

• India’s food processing sector is estimated to reach US$ 535 billion by 2025, offering significant opportunities for entrepreneurs and farmers.
• The Shanta Kumar Committee (2015) recommended modernizing storage to enhance food grain quality, reduce losses, improve operational efficiency, and attract private investment into the sector.

Entrepreneurial Possibilities in Food Storage Infrastructure:

• Agri-food supply chains encompass various stages, including production, processing, aggregation, distribution, retailing, marketing, and capital investment.
• Entrepreneurs can innovate solutions to address challenges such as food supply, food security, and food waste within the food industry.

Schemes and Programmes:

Pradhan Mantri Kisan Sampada Yojana (PMKSY):

• Supports the establishment of mega food parks, cold chain structures, and the development of food processing and preservation capacities.

Mega Food Parks:

• Aims to link agricultural production to markets through cluster-based approaches implemented by Special Purpose Vehicles (SPVs).

Cold Chain, Value Addition, and Preservation:

• Focuses on providing integrated cold chain and preservation infrastructure along the entire food processing supply chain.

Creation of Food Processing and Preservation Capacities:

• Aims to modernize processing and preservation capacities, leading to increased processing levels and value addition, thereby reducing wastage.

Creation of Backward and Forward Linkages:

• Aims to establish effective backward and forward integration in the processed food industry by supporting primary processing centers, collection centers, and modern retail outlets.

Food Safety and Quality Assurance Infrastructure:

• Aims to enhance India’s food and agro-processing sector’s competitive edge in the market by creating infrastructure for safety and quality assurance services.

Agro Processing Cluster:

• Aims for cluster-based development of infrastructure and common facilities to encourage entrepreneurs to establish food processing units.

PM Formalisation of Micro Food Processing Enterprises (PMFME):

• Implemented by the Ministry of Food Processing Industry (MoFPI), it provides financial, technical, and business support for upgrading existing micro food processing enterprises.

Common Facility Centres (CFCs) under MSE-CDP:

• Supports export promotion facilities for Farmer Producer Organizations (FPOs), including processing, storage, testing, and packaging.

Mission for Integrated Development of Horticulture (MIDH):

• Provides financial assistance for setting up pre-cooling units, cold rooms, pack houses, preservation units, reefer transport, and ripening chambers, among other facilities.

Way Forward:

• Adequate food storage facilities at affordable costs are essential to reduce food wastage and help small and marginal farmers avoid distress sales.
• Continued support through government schemes and programs, along with private sector involvement, will be crucial for further development and modernization of food storage infrastructure in India.

6. Making India the Food Basket of the World

Global Food Insecurity:

• Out of 8 billion people worldwide, 828 million suffer from hunger daily, highlighting the urgency to address food insecurity on a global scale.

India’s Strengths in Food Production:

• India ranks as the second-largest producer of wheat and rice globally, with abundant cultivable land and favorable growing conditions for a wide variety of fruits and vegetables.
• The country exports wheat to approximately 70 nations and rice to about 150 countries, showcasing its capability to contribute significantly to the global food supply.

Millets as a Solution:

• India is the largest producer of millets globally, with varieties like pearl millet and sorghum contributing approximately 19 percent to world production.
• Millets have been promoted as part of India’s ‘Super Food Bucket’, recognized for their health benefits and nutritional value, leading to initiatives like the International Year of Millets in 2023.

Food Processing Industry Potential:

• The food processing sector plays a crucial role in linking farmers to consumers both domestically and internationally.
• With an estimated size of US$ 322 billion, the sector is poised to grow to US$ 543 billion by 2025, presenting opportunities for India to become a leading global food supplier.

Complexity of Food Supply Chain:

• India’s food supply chain is intricate, involving perishable goods and numerous stakeholders.
• Practices such as data integration, financial flow management, and efficient transport scheduling are essential for optimizing the supply chain and ensuring timely delivery of goods.

Importance of Food Packaging:

• Packaging is increasingly vital in reaching consumers and differentiating products in a competitive market.
• Effective packaging ensures product quality and freshness while enhancing the brand’s image and consumer appeal.

Standards in the Food Supply Chain:

• Standards play a crucial role in improving supply chain efficiency and ensuring food safety.
• Both food and logistics standards, including packaging and IT systems, are essential for seamless transfer of goods and information, aligning with global food safety measures.

India’s Potential as a Leading Food Supplier:

• With its abundant resources and agribusiness system, India has the potential to become the largest food supplier globally.
• Investments in cold chain infrastructure, research in post-harvest technologies, food processing plants, and retailing sectors are necessary to harness the full potential of the food industry.

Conclusion:

• India possesses the necessary resources and infrastructure to become a significant player in the global food supply chain.
• Investments and advancements in various sectors, including food processing, packaging, and supply chain management, are vital for India to realize its potential as the world’s largest food supplier.

7. ODOP – Providing the Framework for Value Chain Development

Introduction:

• The One District One Product (ODOP) intervention facilitates the aggregation of sellers on e-commerce platforms, boosting visibility for small businesses and farmers.
• Aligned with the Atma Nirbhar Bharat initiative, the scheme aims to foster inclusive development and harness export potential.

PMFME Initiative:

• Launched under Aatmanirbhar Bharat, the PMFME Scheme supports micro-food processing enterprises with technical, financial, and business assistance.
• The ODOP concept under PMFME fosters the integrated development of local economies, benefiting over 2 lakh enterprises.

Progress of ODOP Scheme:

• The government has approved 137 unique products in 713 districts across 35 States and UTs, laying the foundation for value chain development.
• Farmer Producer Organizations (FPOs), Self-Help Groups (SHGs), and Cooperatives receive support for market study, product standardization, packaging, warehousing, and marketing under ODOP.

Loan Disbursement and Top Performing States:

• 70,286 loans have been sanctioned under credit-linked support, with Maharashtra, Bihar, Tamil Nadu, Uttar Pradesh, and Telangana leading in performance.
• Individual micro-enterprises receive capital subsidies and credit linkage, while clusters and groups get support for common infrastructure.

Value Chain Development and Marketing Support:

• The ODOP scheme promotes common infrastructure facilities, cluster development, value addition, and branding/marketing initiatives.
• Institutional architecture ensures effective planning, execution, and monitoring at district, state, and national levels.

Prospects and Benefits of ODOP:

• Local and community development, preservation of local enterprises, skilling/training, and promotion of exports contribute to inclusive growth.
• The digital ODOP GIS map facilitates resource identification and visualization, indicating growth potential and expansion opportunities.

Challenges and Way Forward:

• Challenges include uneven infrastructure distribution, access to financial and market linkages, and underutilization of cold chain infrastructure.
• ODOP’s bottom-up approach and focus on integrated development garner accolades, aiming for transformation and economic growth.

Conclusion:

• ODOP, as a flagship initiative, empowers districts, generates local employment, fosters entrepreneurship, and contributes to India’s self-reliance.
• Effective implementation of ODOP with systematic marketing, value addition, and infrastructure development aligns with the vision of Aatmanirbhar Bharat, strengthening India’s economy.

8. An Overview: Traditional Storage Infrastructure And Practises In India

Overview of Food Grain Production in India:

• India achieved a significant milestone in food grain production, reaching 3296.87 lakh tonnes in 2022-23, marking an increase of 140.71 lakh tonnes from the previous year.
• This production surpasses the five-year average by 308.69 lakh tonnes, consolidating India’s self-sufficiency and leading position in food grain exports.

Importance of Food Grain Storage Infrastructure:

• Adequate infrastructure for food grain storage is essential for maintaining food security at the national level and sustaining India’s position as a leading food grain exporter.
• Effective storage facilities mitigate risks such as damage from calamities, theft, and fire accidents, ensuring the preservation of food grains.

Traditional Storage Structures in India:

• Andhra Pradesh Traditional Storage Pits: Farmers utilize century-old rectangular pits filled with hay and clay to store grains for up to a decade, providing protection from various risks.
• Bukhari: Square-shaped structures, plastered with mud and straw, equipped with polythene coverings to guard against moisture.
• Morai: Conical structures with improved designs using circular wooden planks and bamboo splits for storing grains like paddy, maize, and jawar.
• Kothar: Wooden box-type structures elevated from the ground, commonly used in northern India for storing various grains.
• Rectangular Grain Bin: Storage structures with multiple bins under the same shed, facilitating storage of different types of grains.
• Bharola: Egg-shaped portable storage bins made of earth, with a capacity of 40-80 kgs of food grains.
• Kupp: Circular structures made by stacking chaff and wheat straw tightly, serving as cattle fodder storage.
• Crib: Bamboo and wood structures with thatch straw roofing, allowing for natural ventilation and effective drying of grains.
• Kanaja: Underground bamboo containers with wide openings, plastered with mud and cow dung mixture to prevent spillage and pilferage.

Traditional Storage Practices in India:

• Northern India Wheat Storage: Indigenous methods involve sun-drying and sifting wheat to reduce the risk of storage pests.
• Red Gram Storage: Mixing with table salt before packing in jute gunny bags prevents insect movement due to salt’s corrosive action.
• Ash for Sorghum Seeds: Sorghum seeds stored with ash in airtight jute bags utilize silica content to repel insects.
• Tamil Nadu Ragi Storage: Neem and thumbai leaves are used to deter pests in ragi storage, along with neem seed kernel extract to treat jute bags.
• Camphor for Pest Repellent: Farmers use camphor to repel pests during the storage of pulses and grains for up to 3 months.
• Gingelly Seeds with Paddy: Mixing gingelly seeds with paddy prevents larvae infestation in oil seeds for at least 3 months.
• Preserving Gingelly Oil: Storing gingelly oil with palm jaggery in tin containers prevents rancidity for up to 18 months, with the additional practice of using heated iron rods to preserve oil quality.
• Tamarind Storage: Tamarind stored in earthen pots with salt prevents infestation and loosens tamarind flesh.
• Sweet Flags for Grain Storage: Grains mixed with powdered sweet flag emit a strong odour, deterring infestation for over 40 years.

Conclusion:

• India’s indigenous food storage practices offer cost-effective and sustainable solutions, preserving grains without chemical preservatives.
• Embracing these practices can enhance India’s reputation as a global exporter of clean and organic food grains, contributing to food security worldwide.