Upto 40% foodgrain stored unprofessionally due to 35 MT warehousing capacity shortage: Study
Owing to extreme dearth of about 35 million tonnes (MT) warehousing capacity together with massive food grain storage shortfall of about eight MT, about 30-40 per cent food grain is stored in an unprofessional manner during the peak marketing season in India, according to a recently concluded Assocham-Yes Bank joint study.
"There is an
urgent need to develop a strong warehousing system equipped with
modern and scientific storage facilities like warehouses, silos, silo
bags and others as the grain storage capacity in India
has not been
keeping pace with the marketable surplus," highlighted the study
titled 'Agri-Infrastructure in India: The Value Chain Perspective,'
jointly conducted by The Associated Chambers of Commerce and Industry
(Assocham) and Yes Bank.
"In India, around 20-30
per cent of total food grain harvest is wasted due to inadequate
storage capacity, regional imbalance in warehouses, lack of adequate
scientific storage and inefficient logistic management," said D.S.
Rawat, secretary general of Assocham while releasing the
"Each grain bag is handled at least six times before
it is finally opened for processing which leads to higher storage and
transportation charges and also adds to wastage of food grain during
transit and handling," said Mr Rawat. "Much needs to be done to
built additional storage capacity, renovate existing warehouses and
implement a robust Negotiable Warehouse Receipt (NWR) system to make
available more funds to farm producers and simultaneously provide
security to the lenders."
Growing at a compounded annual
growth rate (CAGR) of about nine per cent, the market size of
warehouse was over Rs 22,800 crore in FY 11 which is expected to
cross Rs 35,000 crore mark in FY 16 and only 12 per cent in this
accounts for agro while the remaining is industrial
While the warehousing space clocking a CAGR of
about four per cent and which was about 1.52 billion square feet in
FY 11 is expected to grow to 1.84 billion square feet till FY 16 and
only 29 per cent of this accounts for agro while the remaining for
"India needs to recalibrate its
strategy to mitigate the challenges of high food grain wastage due to
lack of scientific storage facilities and high inflation due to lack
of cold chain infrastructure like cold storages and refrigerated
transport as it leads to wastages in fruit and vegetables,"
suggested the Assocham-Yes Bank study.
"Warehousing is the
backbone for developing trade & commerce and agro processing
industry as it plays a very crucial role in strengthening
agricultural supply chain, ensuring food security and price
stabilization," said Mr Rawat. "Besides, it also solves the
problem of glut and scarcity by maintaining uninterrupted supply of
agricultural commodities in off season."
capacity available in India, in public, co-operative and private
sector is over 112 MT and another 35 MT of warehousing capacity is
required during the 12th Five Year Plan for storing all major crops
highlighting the huge demand-supply mismatch. "About 70 per cent of
warehousing space is owned by government agencies."
warehouses in India lack in optimal size, adequate design,
ventilation facility, inventory management and storage system as they
have been built following the traditional norms and without proper
specification and even some of the modern warehouses do not meet
international standards," further noted the study.
is an intense competition amid warehousing industry due to low entry
barriers (lower capital outlay and lesser regulatory environment) and
high fragmentation," the study added. "Besides, unorganised
segments pose a great threat and competition to modern warehouse
because of lesser overheads and competitive warehousing rate in the