Projections of production and marketed surplus of various farm products show that the quantities, which the marketing system will be required to handle in future, are quite large. A marketing system backed by strong, adequate infrastructure is at the core of agricultural marketing.  Market infrastructure is important not only for the performance of various marketing functions and expansion of the size of the market but also for transfer of appropriate price signals leading to improved marketing efficiency. High investment and entrepreneurial skills required for creation and management of modern markets has to come from private sector. The situation of control by the state has to be eased to facilitate greater participation of the private sector, particularly to engender massive investments required for the development of marketing infrastructure and supporting services. Investment requirement for the development of marketing, storage and cold storage infrastructure in the country during 10^th Plan has been estimated by a Task Force to be of the order of Rs. 12,230 crores.  The outlay required for the segments is at  ( Annexure -VI  ). 

           With a view to induce large investment in the development of marketing infrastructure as envisaged above, the Ministry has formulated a scheme for “Development/Strengthening of Agricultural Marketing Infrastructure, Grading and Standardization”.  Under this scheme investment subsidy is provided on the capital cost of general or commodity specific infrastructure for marketing of agricultural commodities and for strengthening and modernization of existing agricultural markets, wholesale, rural and periodic or in tribal areas.  The scheme is reform linked, to be implemented in those States/UTs that amend the APMC Act wherever required to allow setting up of agricultural markets in private and cooperative sectors.  The States of Madhya Pradesh, Tamil Nadu, Kerala, Manipur, Himachal Pradesh, Andhra Pradesh, Punjab, Sikkim, Nagaland and Andaman & Nicobar Ilands (U.T.) have so far been notified for implementation of the Central Sector Scheme, being the reforming States. Under the scheme, back ended subsidy @ 25% of capital cost of the project is provided in all States and @ 33.3% of capital cost in case of NE States, hilly areas and SC/ST entrepreneurs.In respect of infrastructure projects of State Agencies, there is no upper ceiling on subsidy to be provided under the scheme. There is central allocation of Rs. 190.00 crore under the scheme 10^th Plan. An amount of Rs. 25 crore has been released under the scheme during 2004-05.  Efforts are being made to make the people aware about the scheme through newspaper advertisement, distribution of publicity material and by arranging awareness programmes for officials of States and Banks.    

Storage Infrastructure

Storage infrastructure is necessary for carrying over the agricultural produce from production periods to rest of the year. Lack of adequate scientific storage facilities cause heavy losses to farmers in terms of wastage in quantity and quality of produce in general and of fruit and vegetables in particular.  It is well known that small farmers do not have the economic strength to retain produce with themselves till the market prices are favourable. There is a felt need in the country to provide the farming community with facilities for scientific storage so that wastage and produce deterioration are avoided and also to enable it to meet its credit requirement without being compelled to sell the produce at a time when the prices are low. Among the principal agencies engaged in warehousing and storage, FCI constructs godowns for their own needs of procurement and public distribution, the storage of CWC/ SWCs is by and large utilised by FCI, traders and for stocking fertilizers. These principal agencies have, therefore, by and large tended to bypass the requirement of farming community in the rural areas. To consider various aspects of the problems relating to storage of agricultural produce and to improve the country’s storage capacity and also storage technology, the Govt. constituted a High level Expert Committee which inter alia recommended that about 20 lakh tonne storage capacity may be created in rural/semi-urban areas. Creation of storage facilities for agricultural produce, particularly in the rural area has also been emphasized in the National Agriculture Policy.  An Inter-Ministerial Task Force constituted by the Ministry of Agriculture has in its report inter alia recommended in 2002 that in addition to 78.83 million tonne available storage capacity in the country additional storage capacity of 130 lakh tonne may be created during 10^th plan period.  Of this 90 lakh tonne capacity is to be created in private and cooperative sector.   

       Accordingly the capital investment subsidy scheme titled ‘Gramin Bhandaran Yojana’ has been launched w.e.f. 01.04.2001. The main objectives of the scheme include creation of scientific storage capacity with allied facilities in rural areas to meet out various requirements of farmers for storing farm produce, processed farm produce, agricultural inputs, etc., and prevention of distress by creating the facility of pledge loan and marketing credit. 

    Initially scheme was approved for two years i.e. 2001 to 2003.  Since there had been huge response to the scheme, it was extended up to 30.9.2004.  Beyond this date the scheme has been approved for continuation up to 31.3.2007 with some modifications.  Under the pre-revised scheme, back ended subsidy @ 25% of capital cost of the project has been provided. In case of NE States, hilly areas and SC/ ST entrepreneurs, subsidy has been provided @ 33.33% of the capital cost of the project. Under the revised scheme, subsidy @ 25% will be given to all categories of farmers, Agriculture graduates, cooperatives & CWC/ SWCs. All other categories of individuals companies and corporations would be given subsidy @ 15% of the project cost. In case of NE States/hilly areas & SC/ST entrepreneurs and their cooperatives, subsidy shall be 33.33%. 

       Though a total of 90 lakh tonne capacity of Rural Godown was targeted during 10^th Plan period, the same has now been revised upwards to 140 lakh tonne on the target of 90 lakh tonne capacity was already achieved during 2004-05 itself.  Increased requirement of Rural Storage has been necessitated on account of increase in the production of food grain and its continuing increasing trend.  During last three years 9483 storage projects having a capacity of 141.83 lakh tonne have already been sanctioned under the scheme by now.  The statement showing state-wise progress is enclosed at Annexure-VII.  The capacity-wise break-up of godown are given below:- 

Capacity-wise breakup of sanctioned project  

           Out of 9483 godowns sanctioned so far, 335 godowns are in public sector, 2376 are in farmers cooperative, 5050 godowns belong to farmers and 1722 godowns are owned by others like traders, companies, etc.       

The year-wise physical and financial performance under the scheme has been as under:- 

The scheme has now been made farmers’ friendly by allowing subsidy for smaller godowns of 50 MT size in general and of 25 in hilly areas.  Five lakh tones capacity to be created is reserved for small farmers and the target of construction in the Tenth Plan is enhanced from 90  to 140 lakh tonne.