Union Home and Cooperation Minister Shri Amit Shah informed the Rajya Sabha in a written reply that a 500 metric tonne godown has been constructed under the pilot phase at Bahudeshiya Prathamik Krishi Saakh Sahakari Society Maryadit Parswada in Balaghat. The facility was inaugurated by Prime Minister Narendra Modi on February 24, 2024, and has been hired by the Madhya Pradesh Warehousing and Logistics Corporation.
Convergence of Key Government Schemes
The grain storage plan is being implemented by converging multiple central government schemes. These include the Agriculture Infrastructure Fund (AIF), Agricultural Marketing Infrastructure Scheme (AMI), Sub-Mission on Agricultural Mechanization (SMAM), and the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME).
Under the AIF scheme, PACS receive interest subvention on loans taken for constructing warehouses. Meanwhile, AMI provides capital subsidy support for building foodgrain storage infrastructure. The government has also extended the loan repayment period under AIF for PACS from the earlier 2+5 years to 2+8 years, easing the financial burden on cooperative societies.
Enhanced Subsidies and Reduced Financial Burden
The Department of Agriculture and Farmers Welfare has introduced significant reforms under the AMI scheme to accelerate storage capacity creation. Margin money requirements have been reduced from 20 percent to 10 percent, making it easier for PACS to undertake infrastructure projects.
Construction cost norms have been revised upward to reflect current market realities. For plain areas, eligible project costs have increased to ₹7,000 per metric tonne, while northeastern states can avail up to ₹8,000 per metric tonne. Subsidies for PACS have been enhanced from 25 percent to 33.33 percent.
Additionally, PACS are now eligible for an extra one-third subsidy of the total admissible amount for ancillary infrastructure such as internal roads, weighbridges and boundary walls. This integrated approach ensures comprehensive infrastructure development rather than isolated warehouse construction.
Reducing Losses, Increasing Farmer Income
Decentralized storage at the village level is expected to significantly cut post-harvest losses. By enabling scientific storage closer to farms, the plan minimizes excessive handling and transport damage.
Localized warehousing also reduces long-distance transportation to distant mandis or warehouses. This lowers logistics costs and allows farmers, particularly small and marginal ones, to store produce safely and sell when market prices are favorable.
The plan also facilitates pledge financing, enabling farmers to obtain credit against stored produce. This reduces distress sales and strengthens rural credit access, thereby improving price realization and income stability.
Strengthening Food Security and Supply Chains
Experts believe the World’s Largest Grain Storage Plan will enhance supply chain efficiency and reinforce India’s food security framework. By building storage capacity at the grassroots level, the government aims to create a robust agricultural ecosystem linked directly to cooperative institutions.
The initiative reflects the broader push to modernize India’s agricultural infrastructure while empowering cooperatives as engines of rural growth. Detailed information about the scheme is available on the Press Information Bureau website and the Ministry of Cooperation portal.
