Decentralised Grain Storage Plan in the Cooperative Sector

Why in News?

The Decentralised Grain Storage Plan in the Cooperative Sector has gained attention because of its progress in expanding local-level grain storage capacity and strengthening agricultural infrastructure through cooperatives and Primary Agricultural Credit Societies (PACS) across India.

About the Plan

The Decentralised Grain Storage Plan in the Cooperative Sector was launched as a pilot project on 31 May 2023. Its objective is to expand grain storage capacity at the local level and strengthen the systems of storage, processing, procurement and distribution.

The plan follows an integrated cooperative approach by converging existing government schemes and utilising PACS as decentralised storage and agricultural service centres.

Role of PACS and Benefits for Farmers

The initiative enables PACS to diversify beyond credit activities into storage, processing, marketing and other agricultural services. This can create additional rural economic opportunities.

For farmers, decentralised storage can help prevent distress sales, provide greater flexibility in storing produce and support better price realisation.

Local storage facilities can also reduce dependence on distant warehouses by improving connectivity between procurement centres, storage facilities and Fair Price Shops. This can reduce transportation costs and post-harvest losses.

Progress of the Plan

During the pilot phase, the initiative was implemented through 11 PACS across 11 States, creating approximately 9,750 MT of storage capacity.

During the expansion phase, 1,012 PACS/cooperative societies have been identified, while 313 PACS have completed godown construction, creating more than 1.80 lakh metric tonnes (LMT) of storage capacity as of July 2026.

Integrated Infrastructure and Convergence Framework

PACS as Integrated Rural Service Hubs

The plan seeks to transform PACS into integrated agricultural service centres by developing local infrastructure for storage, processing and marketing.

This approach can bring multiple agricultural services closer to farmers and strengthen the rural agricultural value chain.

Convergence with Government Schemes

The plan uses convergence with several existing government schemes.

Agriculture Infrastructure Fund (AIF) provides financing support and interest subvention for creating and upgrading post-harvest infrastructure.

Agricultural Marketing Infrastructure (AMI) Scheme provides back-ended capital subsidy for the construction of foodgrain storage facilities.

Sub-Mission on Agricultural Mechanization (SMAM) supports the establishment of Custom Hiring Centres and improves farmers' access to agricultural machinery.

Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme promotes the growth and formalisation of micro food-processing enterprises.

Selection of PACS and Institutional Framework

Selection Process

According to the Margdarshika (Standard Operating Procedure), PACS are identified and approved by the District Cooperative Development Committees (DCDCs) based on local storage requirements.

Land Requirements

Participating PACS should preferably have their own land. The land should not be waterlogged or located in forest areas.

The consent of PACS members is required for utilisation of the land. In the case of leased land, the lease period should be more than 20 years.

Implementation Mechanism

Implementing Agency

The National Cooperative Development Corporation (NCDC) is responsible for implementing the Decentralised Grain Storage Plan in the Cooperative Sector.

National-Level Coordination

An Inter-Ministerial Committee (IMC) oversees the overall implementation of the plan, while the National Level Coordination Committee (NLCC) ensures coordination among participating institutions.

State and District-Level Support

At the state and district levels, the State Cooperative Development Committees (SCDCs) and District Cooperative Development Committees (DCDCs) provide implementation support and coordination.

Financial Support and Project Viability

Enhanced Subsidy Support

To improve the viability of storage projects, the government increased the subsidy under the Agricultural Marketing Infrastructure (AMI) Scheme from 25% to 33.33%.

The margin money requirement was also reduced from 20% to 10%.

Credit Support

NABARD acts as the subsidy-channelising agency under AMI, while State Cooperative Banks and District Central Cooperative Banks provide credit support to PACS.

Interest Subvention

Through NABARD's special refinance facility and 3% interest subvention under AIF, the effective loan interest rate for PACS can be reduced to 1%.

Assured Hiring Support

The Food Corporation of India (FCI) provides assured hiring of eligible godowns created under the plan, subject to prescribed conditions. This can improve the financial sustainability of storage projects.

Quality Standards and Transparency

Standardised Branding

The plan provides uniform branding guidelines for storage infrastructure, including approved grain-storage logos and colour schemes. This creates a recognisable identity for the infrastructure.

Quality Construction Standards

Storage structures are required to comply with Warehousing Development and Regulatory Authority (WDRA) norms and should be designed according to local environmental conditions.

The use of durable materials, adequate ventilation and appropriate safety measures is emphasised to minimise grain spoilage.

Monitoring and Accountability

Regular inspections and quality audits are undertaken to ensure compliance with construction and safety standards.

PACS members monitor project progress, while Project Management Consultants (PMCs) provide updates regarding construction activities and expenditure.

Significance

The Decentralised Grain Storage Plan represents a shift from a predominantly centralised storage model towards a decentralised, community-based agricultural infrastructure system.

By transforming PACS into integrated rural service centres, the initiative can help reduce post-harvest losses, improve farmers' price realisation, strengthen agricultural value chains and contribute to India's food-security architecture.