National policy on handling, storage and

transportation of food grains:

In order to reduce storage and transit losses of foodgrains at farm and commercial level,
to moderate the system of handling, storage and transportation of the foodgrains
procured by the Food Corporation of India (FCI) and to bring in
additionality of resources through private sector involvement, the Government
has approved a National Policy on Handling, Storage and Transportation of Foodgrains,
details of which are

3. Modernization and upgradation of Bulk Grain Handling Infrastructure

1. In order to reduce storage losses, it is necessary to develop and
modernize the infrastructure for integrated bulk handling, storage
and transportation in India. The thrust of the policy should be:-
3. Construction of a chain of silos at procurement as well as distribution points.
4. Transportation of grain from silos to railhead and thereafter to predetermined
destinations by specially designed trucks/rail wagon (with top filling and bottom
discharge mechanism)/dedicated trains.
5. Declaration of food grains storage as infrastructure.
2. For storage of foodgrains procured by the FCI, integrated bulk handling facilities with
silos of large capacity for wheat along with testing facilities for quality control would be
created at about 20 identified central locations in producing and consuming areas
as well as a few port towns. These facilities, including the infrastructure for bulk
transportation to these centers, will be created and maintained in the private sector
under the overall coordination of the FCI. The design of special top filling and bottom
discharge wagon would be decided in consultation with the Ministry of Railways. The
Ministry of Railways will also be consulted while deciding the location and circuits where
these wagons would play. FCI will guarantee utilization of these facilities to the
extent of 100% for the first ten years and 75% for the next 10 years. From
these points, secondary transportation of foodgrains would be made in bag form to
about 500 godowns in important central location in different states to be owned
and maintained by the FCI.
3. The private sector will be encouraged to build storage capacities in which
they will store and maintain foodgrains procured by the Government agencies,
for which they will be entitled to storage charges.
4. The private sector participation should be sought and encouraged for development of
infrastructure for the integrated build handling, storage and transportation through:-
1. Measure such as Build-Own-Operate-Transfer (BOOT), Built-Own- Lease-Transfer
(BoLT), Built-Own-Operate (BOO), Lease-Develop- Operate (LDO), Joint Ventures, etc.
2. Generation of funds through public issues by private enterprises.
3. Automatic approval for Foreign Direct Investment (FDI) upto 100%.
4. Loans from financial institutions, NABARD, external commercial borrowings.
5. Fiscal incentives as given below:
1. 100% deduction in profit for the purpose of Income Tax for the first five years and
30% deduction in profit for the next five years.
2. Deduction of 40% of the profit derived by financial institutions financing such projects,
as provided to financial corporations engaged, inter-alia, in providing long term finance
for agricultural development.
3. Customs duty exemption for items not manufactured in India, on a case-to-case
basis, subject to a list of such equipment being submitted in advance.
4. Development of Infrastructure Facilities at Ports India has been traditionally the
importer of foodgrains and therefore, the infrastructure facilities available at the ports
are basically meant for unloading operations and not for exports. For unloading
operations, ships gears are normally used. Even the latest
mechanized facilities at Jawaharlal Nehru Port, Navi Mumbai have
been designed for import purposes only. There is also lack of general
cargo berths at the major ports and very limited warehousing
facilities are available for the storage of foodgrains at ports. For
creating the proper port facilities for foodgrains meant for export in
due course, the infrastructure facilities would have to be developed
for which following actions are required.
1. Identification of ports to be development for purposes of export of
foodgrains. The distribution of foodgrains traffic may spread over
to the non-traditional ports which have spare capacity like New
Mangalore and Cochin Ports;
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2. Development of more general cargo berths at the ports through
ports own investment/private participation;
3. Water front/berths can be leased to the users who may be
encouraged to put up their own facilities; and
4. Development of dedicated modern foodgrains handling facilities at
selected ports.
5. Role of Central Government
The Central Government would:-
1. Facilitate speedy clearance of projects concerning development of
infrastructure for bulk handling, transportation and storage of
foodgrains by setting up an Approval Board competent to take
final decision;
2. Enter into bilateral agreements with other countries/international
agencies for providing technical/financial assistance;
3. Take necessary legislative/administrative measures for removing
impediments with regard to stock control order/movement control
order framed by various state governments;
4. Utilize the services of an existing independent regulatory
mechanism for fixing /regulating tariff for various operations, such
as cleaning, drying, storage, transportation, etc;
5. Make available facilities of the Railways for bulk transportation;
6. Promote negotiable Warehousing Receipt System by which farmers
could hold their grains back from market and meet their working
capital/short term requirement by borrowing from Banks against
these receipts; and
7. Promote research for development of alternate storage
technologies like Vacuums Process Storage (VPS) technology
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which would ensure longer shelf life of foodgrains and help expert
of foodgrains in vacuum packs.
6. Role of the State Government
The State Government would help in:-
1. Acquisition of land required for various projects as for public
purpose; and
2. Making available other facilities such as water, power, road, etc.
-sd/-
(B.K. Bal)
Joint Secretary to the Government of India
ORDER
ORDERED that a copy of the resolution be communicated to all the
Ministries/Departments of the Government of India, Planning
Commission, Chief Secretaries of the State Governments and UT
Administrations, Chairmen and Managing Directors of the Food
Corporation of India, Central Warehousing Corporation.
ORDERED also that the resolution be published in the Gazette of India
for general information.