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Informist, Wednesday, Mar. 19, 2025

 

NEW DELHI – Food Corp. of India failed to meet targets for godown construction consecutively from 2021-22 (Apr-Mar) to FY25, according to a report by a parliamentary standing committee on the consumer affairs ministry. FCI has been relying on rented space to store procured foodgrains amid storage crunches. The committee has recommended a study to find the cost-effectiveness of hired facilities against owned storage. 

 

Against the target of godown construction with 50,100 tonnes capacity in 2023-24, FCI achieved only 1,760 tonnes, according to the report placed in Parliament on Thursday. As of Jan. 31, FCI had 1,000 tonnes of godown capacity, against the 58,540 tonnes target in 2024-25. Challenges in land acquisition from state governments, difficult terrain, and delays during an extended monsoon were the major drags on godown construction, the report said.

 

As of Jan. 31, the total covered storage capacity available with FCI and state agencies was 84.7 million tonnes. This includes the storage capacity of cover and plinth structures or outdoor raised platforms covered with waterproof material. FCI continuously assesses and monitors the storage capacity and based on the storage gap assessment, storage capacities are created or hired.

 

The committee also noted FCI has owned storage capacity of only 14.7 million tonnes, against hired storage capacity of 26.1 million tonnes. According to FCI, hiring storage or building storage through private partnerships is more cost-efficient than owning storage. 

 

"The owned capacity once constructed at a particular place/location cannot be shifted if the same is required at a different location due to changed procurement pattern or change in offtake of foodgrains on account of consumer preference etc," FCI said in a written reply to the committee. "Whereas the hired capacity can be de-hired and re-hired as per the requirements. So, creation/hiring of capacity by attracting private investment are preferred," it added

 

However, the parliamentary panel noted that amid lack of systemic analysis, it is difficult to fully assess whether hired storage is indeed more cost-efficient in the long run. 

 

"Despite the substantial disparity between owned and hired storage capacities, there has been no comprehensive assessment or evaluation regarding the total expenditure incurred on rental liabilities compared to the cost of maintaining owned storage capacities across various states and Union territories," the committee said in the report. 

 

The committee has strongly recommended that a detailed survey be conducted to assess the expenditure on rental liabilities associated with hired storage facilities as compared to the costs of maintaining owned storage capacity.  End

 

Reported by Afra Abubacker

Edited by Avishek Dutta

 

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