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India will stock up the world's biggest grain storage.
Dec 05, 2022

India is working on developing the 'world’s largest grain storage' programme by merging various schemes of the Union ministries of agriculture and farmers welfare; consumer affairs, food and public distribution; and food processing, two people aware of the development said.

The proposal, which has been circulated among the Union ministries and departments for consultations, comes amid rising global food prices in the wake of disruptions caused by the war in Europe and the covid-19 pandemic.

Nations are increasingly worried about their food security after Russia’s invasion of Ukraine disrupted the world’s foodgrain supply, sending prices to record levels.

The two nations are among the world’s top grain exporters, especially wheat and barley. While India was less affected by the disruption in grain supplies, prices of edible oil and many other foods shot up sharply because of disruptions in production and shipping.

Though India has the world’s highest arable land, the country suffers from low agricultural productivity. The country can play a larger role in global food markets by raising the productivity of Indian farms.

Adequate grain supplies have, however, allowed India to provide subsidized food to the poor following the pandemic despite the Ukraine war.

India extended the Pradhan Mantri Garib Kalyan Anna Yojana to provide free foodgrain to the poor by an additional three months till 31 December, taking the scheme’s total expenditure to Rs.3.91 trillion.

Queries emailed to a spokesperson of the Union ministry of cooperation on 30 November and spokespeople for the ministries of agriculture and farmers welfare; consumer affairs, food and public distribution; food processing on 29 November remained unanswered till press time.

India’s centrally held cereal stocks, which supply subsidized grains to nearly 800 million people, slipped to a five-year low this year, Food Corporation of India (FCI) data showed.

FCI, a statutory body under the ministry of consumer affairs, food and public distribution, is responsible for the storage of grains to help meet the requirements of the public distribution system and other welfare schemes undertaken by the government of India, such as the PM Garib Kalyan Anna Yojana.

The storage capacity for central pool stocks in the past five years varied from 75 million tonnes (mt) to 85 mt, according to FCI.

'We have been lagging behind in terms of stored grains and storage capacity. So now, the government is trying to ramp up. The most important thing in the storage plan will be to see if it’s going to be modern storage or if the old system will be followed, where each man carries a sack and builds a storage pyramid. A mechanized system is far more transparent and much more modern. We don’t even have 2 million tonnes of storage in silos. The storage plan has been in the works for a long time, and it’s only now the government is trying to implement it,' said Ashok Gulati, agricultural economist and former chairman of the Commission for Agricultural Costs and Prices.

To meet any contingency situation such as drought, a strategic reserve of 2 mt of rice and 3 mt of wheat is maintained at the national level at different FCI godowns, out of the foodgrain procured at the minimum support price, the ministry had said in a written reply to a parliamentary question in September 2020.

While India has made gains over the past decade, it is still ranked 68th in a food security index of 113 nations published by the Economist Impact and Corteva Inc.

On 1 October, India’s wheat stocks stood at 22.7 mt and rice stocks were at 20.47 mt, FCI data showed.

'It is a good idea to merge the schemes under which a grant is provided by the government of India for the creation of storage capacity through traditional warehouses, silos and cold storages. However, it must be noted that the state governments also contribute to most of the centrally sponsored schemes to the extent of 40%. The real benefit of such storage will come only if there is compulsory registration of warehouses with the Warehousing Development and Regulatory Authority,' said Siraj Hussain, a former agriculture secretary.

According to a World Bank report, Russia’s invasion of Ukraine is expected to deepen poverty further and worsen food insecurity in low-income countries. Food consumption in these countries accounts for over 45% of total household expenditure, and diets remain heavily based on staple foods, including wheat, the report said.

'All low-income countries are food-deficit and reliant on imported foods with imports of wheat from Russia and Ukraine. Disruptions to wheat imports from Russia and Ukraine, along with surging global food prices are, therefore, expected to exert a strong drag on low-income countries’ growth and stall progress in poverty reduction, particularly in those economies where large shares of the population are already experiencing food insecurity (such as Democratic Republic of Congo, Ethiopia, Madagascar, Mozambique, South Sudan),' the report added.

At the Group of 20 Summit in Bali, Prime Minister Narendra Modi cautioned that the current shortage of fertilizers could lead to a huge crisis and that today’s fertilizer shortage is tomorrow’s food crisis, for which the world will not have a solution.

'We should build mutual agreement to maintain the supply chain of both manure and foodgrain stable and assured. In India, for sustainable food security, we are promoting natural farming and re-popularizing nutritious and traditional foodgrain like millets,' Modi said.

On the day India assumed G20 Presidency, Modi, in a blog post, also wrote about depoliticizing the global supply of food, fertilizers and medical products.

'For promoting harmony within the human family, we will seek to depoliticize the global supply of food, fertilizers and medical products so that geopolitical tensions do not lead to humanitarian crises. As in our own families, those whose needs are the greatest must always be our first concern,' Modi said in the 1 December post.

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