M/S. Marutinandan Kishan Bhandar: Village-Dalpatpura, Tehsil-Ashta, District-Sehore (M.P.)

M/s.
MARUTINANDAN KISHAN BHANDAR
M/s. MARUTINANDAN KISHAN BHANDAR

VILLAGE-DALPATPURA,
TEHSIL-ASHTA,
DISTRICT-SEHORE (M.P.)
PROJECT REPORT
ON
WARE HOUSE & OTHER ALLIED
FACILITIES TO FARMERS
JKM & ASSOCIATES

(Chartered Accountant)
58, Shree Mukati Avenue Colony,
Semnari Road, Ashta
Sehore, (M.P.)
: 9584314454
Email: [email protected]
1
PROJECT AT A GLANCE
1 PROJECT REPORT ON : AGRICUTURE MARKETING INFRASTRUCTURE UNIT
2 NAME OF THE CONCERN : M/s. MARUTINANDAN KISHAN BHANDAR

3 LOCATION OF THE UNIT : DALPATPURA,
TEHSIL-ASHTA,
DISTRICT – SEHORE (M.P.)
4 NAME OF PROMOTER : MR. SHAILENDRA THAKUR,
MR. RAJESH THAKUR,
5 ADDRESS : KANNOD ROAD ASHTA,
DIST.-SEHORE (M.P.)
6 MAN POWER REQUIREMENT : Nos. SALARY/
3 2.40
TOTAL 3 2.40
7 CONNECTED LOAD (H.P.) : 4 HP
8 LAND SURVEY NUMBER : 62/5
9 COST OF PROJECT (Rs. In lacs.)
9.1 LAND : OWNED
9.2 PURCHASE OF WAREHOUSE : 65.00
9.3 MISC. FIXED ASSETS : 0.00
9.4 CONTINGENCIES : 0.00
9.5 PRELIMINARY & PRE-OPERATIVE : 0.00
EXP.
TOTAL 65.00
10 MEANS OF FINACE (Rs. In lacs.)
10.1 PROMOTER CONTRIBUTION: : 13.00
10.2 TERM LOAN : 52.00

TOTAL 65.00
11 INSTALLED CAPACITY : STORAGE OF DIFF. FOOD GRAINS 3918
(MT/ANNUM) MT
12 MAX CAPACITY UTILISATION : 80%
13 SALES ESTIMATION AT THE

FOLLOWING CAPACITY
UTILISATION (Rs in lacs.)
AT FIRST YEAR 80% : 25.07
AT SECOND YEAR 80% : 27.58
AT THIRD YEAR 80% : 30.34
2
14 CONSUMABLES AT 100 % : 0.31

CAPACITY UTILISATION (Rs. In
lacs.)
15 DEBT SERVICE COVERAGE : 2.27 : 1
RATIO
16 DEBT EQUITY RATIO : 4:1
17 BREAK EVEN POINT : 67%
18 IMPLEMENTATION PERIOD : NIL
3
Our country is endowed with a good degree of ethnic and regional diversity. About
three-fourth of the total population resides in the rural areas and majority of them are
dependent upon agriculture for their subsistence. Agriculture contributes about 24.7%
to the Gross Domestic Product (GDP) of the country. It also contributes about 13.1%
to the total Indian exports. This sector provides employment to 58.4% of the country's
workforce and livelihood to more than 650 million people. Despite this fact, the
condition of these people has not shown any significant improvement. The
development of the nation largely depends upon the development of the rural
population. Mahatma Gandhi had once said: "India's way is not Europe's. India is
not Calcutta and Bombay. India lives in her several hundreds of villages".
So the main aim of this paper is to present, what are the challenges that the Rural and
Agriculture Market facing now a days?
India is basically an agrarian society where sole dependence has been on
agriculture since time immemorial. In the olden days, the agricultural produce was
fundamentally bartered by nature where farmers exchanged goods for goods and
also against services. Gradually the scenario changed with the changing times and
agriculture produce began being sold with an element of commercial value. Trading
of agriculture produce began for exchange of money. And from trading to
marketing of agricultural produce began although mostly it is a way of traditional
selling. The marketing as a term is broader than traditional trading. And agricultural
marketing as a concept is still evolving in Indian society. In India, there are
networks of cooperatives at the local, regional, state and national levels that assist in
agricultural marketing. The commodities that are mostly handled are food grains, jute,
cotton, sugar, milk and areca nuts. Currently large enterprises, such as cooperative
Indian sugar factories, spinning mills, and solvent-extraction plants mostly handle
their own marketing operations independently. Medium and small-sized enterprises,
such as rice mills, oil mills, cotton ginning and pressing units, and jute baling
units, mostly are affiliated with cooperative marketing societies.
Agriculture is different from industry and plays a significant role in the economic
development of a nation. India’s prosperity depends upon the agricultural
prosperity. There are many kinds of agricultural products produced in India and the
marketing of all these farm products generally tends to be a complex process.
Agricultural marketing involves many operations and processes through which the
food and raw materials move from the cultivated farm to the final consumers.
Agriculture provides goods for consumption and exports and manufacturing sectors.
The suitable marketing system should be designed so as to give proper reward or
return to the efforts of the tiller of the soil. Market information is a means of
increasing the efficiency of marketing system and promoting improved price
formation. It is crucial to the farmers to make informed decisions about what to
grow, when to harvest, to which market produce should be sent and whether or not
4
to store it. Awareness of farmers on different components of market information and

its utility was very poor (11 to 37 %) as compared to that of traders (75%). Out of the
expectations of farmers on grades, quality, prices in potential markets, price
projections; only real time arrivals and prices were documented and disseminated
with traditional approach. Hence there is a need to create awareness among the
farmers through the agricultural extension agencies like the State Department of
Agriculture, Krishi Vigyan Kendras so that the marketing information on agriculture
commodities are incorporated in the extension services along with production aspects
to the farmers.
CONCEPT OF AGRICULTURAL MARKETING
Marketing is as critical to better performance in agriculture as farming itself.
Therefore, market reform ought to be an integral part of any policy for
agricultural development. The term agricultural marketing is composed of two words-
agriculture and marketing. Agriculture, in the broadest sense, means activities aimed at
the use of natural resources for human welfare, i.e., it includes all the primary
activities of production. Marketing connotes a series of activities involved in moving
the goods from the point of production to the point of consumption. Agricultural
marketing involves essentially the buying and selling of agricultural produces. This
definition of agricultural marketing may be accepted in olden days, when the village
economy was more or less self-sufficient, when the marketing of agricultural produce
presented no difficulty, as the farmer sold his produce directly to the consumer on a
cash or barter basis. But, in modem times, marketing of agricultural produce has to
undergo a series of transfers or exchanges from one hand to another before finally
reaches the consumer. Agricultural marketing system is defined in broadest terms, as
physical and institutional set up to perform all activities involved in the flow of
products and services from the point of initial agricultural production until they
are in the hands of ultimate consumers. This includes assembling, handling, storage,
transport, processing, wholesaling, retailing and export of agricultural commodities
as well as accompanying supporting services such as market information,
establishment of grades and standards, commodity trade, financing and price
risk management and the institutions involved in performing the above functions.
According to Khols”, marketing is the performance of all business activities involved
in the flow of goods and services from the point of initial agricultural production until
they are in the hands of the ultimate consumer”. The National Commission on
Agriculture defined agricultural marketing as a process which starts with a
decision to produce a saleable farm commodity and it involves all aspects of market
structure of system, both functional and institutional, based on technical and
economic considerations and includes pre and post-harvest operations, assembling,
grading, storage, transportation and distribution.
The Indian council of Agricultural Research defined involvement of three
important functions, namely (a) assembling (concentration) (b) preparation for
consumption (processing) and (c) distribution. Agricultural markets are special
5
types of markets that have special characteristics that differ from other markets.
These are mainly due to factors affecting supply of agricultural products, and the
situation of producers in this business. First of all the agricultural market is very
competitive because the producers are all very small and large in number. Therefore,
they don't have a great influence on the price of their products. Agricultural producers
are what are known as price takers, producers that have little or no influence
on the price of their output.
Agricultural marketing can be defined as the commercial function involved in
transferring agricultural products consisting of farm, horticultural and other
allied products from producer to consumer. Agricultural marketing also reflect
another dimension from supply of produce from rural to rural and rural to urban and
from rural to industrial consumers. In the olden days selling of agricultural produce
was easy as it was direct between the producer to the consumer either for money or
for barter. In brief, it was selling not marketing. In the modern world it became
challenging with the latest technologies and involvement of middlemen,
commission agents who keep their margins and move the produce further. As it is
well known more the number of mediatory more will be the costs as each transaction
incurs expenses and invites profits. Ultimately when it comes to the producer the cost
of the produce goes up steep. In the entire process of marketing the producer gets the
lowest price and the ultimate consumer pays the highest as the involvement of
more middlemen in the entire distribution process. Thus agricultural marketing
is a system which has time and space dimension, there forms a part of geographical
study. There are several complexities involved in agricultural marketing as
agricultural produce involves element of risk like perish ability and it again
depends on the type of produce. If the agriculture produce happens to be a seasonal
one it involves another kind of risk. Likewise, there is several risk elements involved in
agricultural marketing. The pricing of the produce depends on factors like seasonality
and perish ability and it depends on the demand and supply also. And all these are
interwoven and ultimately make a deep impact on agricultural marketing.
In the case of agricultural marketing in India it is not exactly the marketing in the
literal sense and we can call it as ‘distributive handling’ of agricultural produce as
there are number of intermediaries who are involved in marketing the agricultural
produce. However with the liberalization, privatization and globalization the economic
scenario in India has changed drastically and tremendously. As a result we have
noticed the changes in the ‘distributive handling’ and again it reinvented and
evolved as agricultural marketing. It is basically because of the rise of retail giants
who are the major buyers in bulk quantity and who constantly look for differentiated,
graded, standardized, processed and packaged products rather than differentiated ones.
They also look for qualitative and quantitative supply of agricultural stocks
continuously to beat the competition in the retail sector.
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INTRODUCTION
Agriculture Market
The term agricultural marketing is composed of two words-agriculture and
marketing. Agriculture, in the broadest sense means activities aimed at the use of
natural resources for human welfare, and marketing connotes a series of activities
involved in moving the goods from the point of production to the point of
consumption. Specification, the subject of agricultural marketing includes marketing
functions, agencies, channels, efficiency and cost, price spread and market integration,
producer’s surplus etc. The agricultural marketing system is a link between the farm
and the non-farm sectors. Agricultural marketing involves in its simplest form the
buying and selling of agricultural produce. This definition of agricultural marketing
may be accepted in olden days, when the village economy was more or less self-
sufficient, when the marketing of agricultural produce presented no difficulty, as
the farmer sold his produce directly to the consumer on a cash or barter basis. But,
in modem times, marketing of agricultural produce is different from that of olden
days. In modem marketing, agricultural produce has to undergo a series of transfers or
exchanges from one hand to another before it finally reaches the consumer.
There are several challenges involved in marketing of agricultural produce. There is
limited access to the market information, literacy level among the farmers is low,
multiple channels of distribution that eats away the pockets of both farmers and
consumers. The government funding of farmers is still at nascent stage and most
of the small farmers still depend on the local moneylenders who are
leeches and charge high rate of interest. There are too many vultures that eat away
the benefits that the farmers are supposed to get. Although we say that
technology have improved but it has not gone to the rural levels as it is
confined to urban areas alone. There are several loopholes in the present legislation
and there is no organized and regulated marketing system for marketing the
agricultural produce. The farmers have to face so many hardships and
have to overcome several hurdles to get fair and just price for their sweat.
Challenges faced by Agriculture Market

Indian system of agricultural marketing suffers from a number of defects. As a
consequence, the Indian farmer is deprived 'of a fair price for his produce. The main
defects of the agricultural marketing system are discussed here.
1. Improper Warehouses: There is an absence of proper ware housing facilities in

the villages. Therefore, the farmer is compelled to store his products in pits, mud-
vessels, "Kutcha" storehouses, etc. These unscientific methods of storing lead to
considerable wastage. Approximately 1.5% of the produce gets rotten and becomes
unfit for human consumption. Due to this reason supply in the village market
7
increases substantially and the farmers are not able to get a fair price for their
produce. The setting up of Central Warehousing Corporation and State Warehousing
Corporation has improved the situation to some extent.
2. Lack of Grading and Standardization: Different varieties of agricultural produce
are not graded properly. The practice usually prevalent is the one known as "dara"
sales wherein heap of all qualities of produce are sold in one common lot Thus the
farmer producing better qualities is not assured of a better price. Hence there is no
incentive to use better seeds and produce better varieties.
3. Inadequate Transport Facilities: Transport facilities are highly inadequate in

India. Only a small number of villages are joined by railways and pucca roads to
mandies. Produce has to be carried on slow moving transport vehicles like bullock
carts. Obviously such means of transport cannot be used to carry produce to far-off
places and the farmer has to dump his produce in nearby markets even if the price
obtained in these markets is considerably low. This is even truer with perishable
commodities.
4. Presence of a Large Number of Middlemen: The chain of middlemen in the

agricultural marketing is so large that the share of farmers is reduced substantially.
For instance, a study of D.D. Sidhan revealed, that farmers obtain only about 53%
of the price of rice, 31% being the share of middle men (the remaining 16% being
the marketing cost). In the case of vegetables and fruits the share was even less, 39%
in the former case and 34% in the latter. The share of middlemen in the case of
vegetables was 29.5% and in the case of fruits was 46.5%. Some of the
intermediaries in the agricultural marketing system are -village traders, Kutcha
arhatiyas, pucca arhatiyas, brokers, wholesalers, retailers, money lenders, etc.
5. Malpractices in Unregulated Markets: Even now the number of unregulated

markets in the country is substantially large. Arhatiyas and brokers, taking
advantage of the ignorance, and illiteracy of the farmers, use unfair means to cheat
them. The farmers are required to pay arhat (pledging charge) to the arhatiyas,
"tulaii" (weight charge) for weighing the produce, "palledari" to unload the
bullock-carts and for doing other miscellaneous types of allied works, "garda" for
impurities in the produce, and a number of other undefined and unspecified charges.
Another malpractice in the mandies relates to the use of wrong weights and measures
in the regulated markets. Wrong weights continue to be used in some unregulated
markets with the object of cheating the farmers.
6. Inadequate Market Information: It is often not possible for the farmers to

obtain information on exact market prices in different markets. So, they accept
whatever price the traders offer to them. With a view to tackle this problem the
government is using the radio and television media to broadcast market prices
regularly. The news papers also keep the farmers posted with the latest changes in
8
prices. However the price quotations are sometimes not reliable and sometimes
have a great time-lag. The trader generally offers less than the price quoted by the
government news media.
7. Inadequate Credit Facilities: Indian farmer, being poor, tries to sell off the
produce immediately after the crop is harvested though prices at that time are very
low. The safeguard of the farmer from such "forced sales" is to provide him credit so
that he can wait for better times and better prices. Since such credit facilities are not
available, the farmers are forced to take loans from money lenders, while agreeing to
pledge their produce to them at less than market prices. The co-operative marketing
societies have generally catered to the needs of the large farmers and the small farmers
are left at the mercy of the money lenders.
In order to have best advantage in marketing of his agricultural produce the farmer
should enjoy certain basic facilities.
HOW WE CAN OVERCOME FROM THESE CHALLENGES

1. He should have proper facilities for storing his goods.
2. He should have holding capacity, in the sense, that he should be able to wait for
times when he could get better prices for his produce and not dispose of his stocks
immediately after the harvest when the prices are very low.
3. He should have adequate and cheap transport facilities which could enable him to
take his surplus produce to the mandi rather than dispose it of in the village itself to the
village money-lender-cum-merchant at low prices.
4. He should have clear information regarding the market conditions as well as about
the ruling prices, otherwise may be cheated. There should be organized and regulated
markets where the farmer will not be cheated by the "dalals" and "arhatiyas".
5. The number of intermediaries should be as small as possible, so that the

middleman's profits are reduced. This increases! The returns to the farmers.
India is an agro-based economy and the growth of most of the other sectors of
economy is driven by rural demand. Urban market is reaching towards the
saturation point, thus bringing in and urgent need to focus on rural development.
Moreover, more than 70% of India's population lives in villages and constitutions
a big market for industry because of increasing disposal incomes and awareness
level. In comparison to just 5,161 towns in India there are 6, 38,365 villages in
India. This in itself is an indicator where the real India resides. Companies are
realizing slowly but surely that the key to gain true market leadership lies in tapping
the rural potential. However, the rural sector in India suffers from different kinds of
problems. Some areas are having enough money but their level of awareness and
hence consumerism is very low. But there are many areas where economic
empowerment, education, health etc., are major problems.
9
There is no doubt that in any marketing there is a motive towards profit involved
and at the same time the marketing is to be based on certain values, principles and
philosophies such as offering just and fair prices to the farmers who toil hard to till.
Bringing necessary reforms coupled with proper price discovery mechanism
through regulated market system will help streamline and strengthen
agricultural marketing.
In order to avoid isolation of small-scale farmers from the benefits of agricultural

produce they need to be integrated and informed with the market knowledge like
fluctuations, demand and supply concepts which are the core of economy.
Marketing of agriculture can be made effective if it is looked from the collective and
integrative efforts from various quarters by addressing to farmers, middlemen,
researchers and administrators. It is high time we brought out significant strategies
in agricultural marketing with innovative and creative approaches to bring fruits of
labor to the farmers.
Agricultural marketing covers the services involved in moving an agricultural

product from the farm to the consumer. Numerous interconnected activities are
involved in doing this, such as planning production, growing
and harvesting, grading, packing, transport, storage, agro-and food processing,
distribution advertising and sale. Some definitions would even include “the acts
of buying supplies, renting equipment, (and) paying labor", arguing that
marketing is everything a business does. Such activities cannot take place
without the exchange of information and are often heavily dependent on
the availability of suitable finance. Marketing systems are dynamic; they are
competitive and involve continuous change and improvement. Businesses that
have lower costs, are more efficient, and can deliver quality products, are those
that prosper. Those that have high costs, fail to adapt to changes in market
demand and provide poorer quality is often forced out of business.
Agricultural marketing can be defined as the commercial functions involved in

transferring agricultural products consisting of farm, horticultural and other allied
products from producer to consumer. Agricultural marketing also reflect another
dimension from supply of produce from rural to rural and rural to urban and from
rural to industrial consumers. In the olden days selling of agricultural produce
was easy as it was direct between the producer to the consumer either for
money or for barter. It brief, it was selling not marketing. In the modern world it
became challenging with the latest technologies and involvement of middlemen,
commission agents who keep their margins and move the produce further. As it is
well known more the number of mediatory more will be the costs as each
transaction incurs expenses and invites profits. Ultimately when it comes to the
10
producer the cost of the produce goes up steep. In the entire process of marketing
the producer gets the lowest price and the ultimate consumer pays the
highest as the involvement of more middlemen in the entire
distribution process.
Agricultural marketing is a form of marketing that encompasses all goods and

services related to the field of agriculture. All these products directly or indirectly
support the effort to produce and deliver agricultural products from the farm to the
consumer. The range of this type of marketing includes such varied products as real
estate support, equipment used in cultivation and harvesting, storage facilities for
harvested crops, and delivery services that transport the harvest to consumers. In
addition, financial services that make it possible to secure products necessary for
agriculture to function are also normally included as part of agricultural marketing.
Within this broad marketing type, just about every aspect of the agricultural process
is addressed. Financial services make it possible for farmers to secure and develop
property where crops can be planted, nurtured, and harvested. Equipment financing
that makes it possible to obtain the tools to work the land is also part of this aspect.
From there, resources that make it possible to connect with buyers are also part of
the overall agricultural marketing process, and often involve the use of marketing
professionals to identify and make the most efficient use of these types of business
relationships.
Storage of harvested crops is also part of the agricultural marketing process. This is
especially true when the crops involved are connected with futures contracts in the
commodities market. Once harvested, the crops can be transported to storage
facilities, where the holder of the contract can then arrange for their sale, making it
possible to earn a return on the investment. The agri-marketing effort continues,
allowing those investors to connect with buyers and complete transactions that are
ultimately beneficial to all parties concerned.
As with most forms of marketing, agricultural marketing is focused on creating a

viable product, identifying one or more groups of consumers who are likely to
purchase that product, and then arranging the means to deliver that product to those
consumers. Along the way, this involves careful consideration of which type of
crops to plant, where to plant them, how to cultivate them to best advantage, and
determining what type of price those crops can command once they are ready for
sale. Shifts in customer preferences, changes in political climate, natural disasters,
and even innovations in agricultural practices can all have an impact on exactly how
the task of agricultural marketing is carried out. For this reason, the strategies and
approaches used in one sector of the marketplace may be inappropriate for a
different sector or targeted group of consumers, a fact that requires marketers pay
close attention to market trends and respond to them in the most productive manner
possible.
11
Warehousing storage infrastructure plays a very vital role in promoting agriculture

marketing, rural banking and financing and ensuring Food Security in the county. It
enables the markets to ease the pressure during harvest season and to maintain
uninterrupted supply of agricultural commodities during off season. Hence, it solves
the problems of glut and scarcity, which are the usual problems in agricultural
marketing. Though warehousing is an independent economic activity, yet is closely
linked with production, consumption and trade. Development of agro processing
agricultural marketing needs a strong warehousing system. Warehousing storage is
the most important auxiliary service for development of trade and commerce.
There had been lack of sustained investment in the storage warehousing sector. The
private sector initiatives were small and sporadic in this sector. Besides, most of the
private sector storage warehousing capacities available in the country were of poor
quality, small, fragmented and do not meet the requisite infrastructure standards.
Warehousing storage is a capital intensive sector and without availing finance from
banks and financial institutions at cheaper interest rate, storage warehousing
facilities cannot be created by the entrepreneur. Land requirements for constructing
the warehouse are difficult to meet due to high rising cost of land in urban, semi
urban and rural areas. Warehousing has not been accorded the status of full-fledged
infrastructure and all financial and other benefits available to infrastructure sector
are not available for storage warehousing sector. Further the storage charges and
other handling charges offered by the Government agencies to private warehouse
operators are not attractive. It was also stated that modern technology has not been
introduced in the storage warehousing sector. Besides, land requirements for
construction of the warehouses are difficult to meet now-a-days due to high cost of
land. Although 100% FDI and some benefits are allowed for the storage
warehousing sector, there has been moderate growth in the private warehousing
sector.
About 80% handling and warehousing facilities are not mechanized and traditional
manual methods for loading, unloading and handling of food grains and other
commodities are used. However, the warehouses which are mechanized have just
forklifts or hydraulic hand pallet trucks. These numbers clearly indicate that there is
an acute shortage of organized and good quality warehousing and storage
infrastructure in the country, for both, agricultural and non agricultural
commodities.
For commodity derivatives market to work efficiently, it is necessary to have a

sophisticated, cost-effective, reliable and convenient warehousing system in the
country. The Habibullah (2003) task force admitted, “A sophisticated warehousing
industry has yet to come about”. Further, independent labs or quality testing centres
should be set up in each region to certify the quality, grade and quantity of
12
commodities so that they are appropriately standardized and there are no shocks
waiting for the ultimate buyer who takes the physical delivery. Warehouses also
need to be conveniently located. Central Warehousing Corporation of India (CWC:
www.fieo.com) is operating 500 Warehouses across the country with a storage
capacity of 10.4 million tonnes. This is obviously not adequate for a vast country.
To resolve the problem, a Gramin Bhandaran Yojana (Rural Warehousing Plan) has
been introduced to construct new and expand the existing rural godowns. Large
scale privatization of state warehouses is also being examined.
Storage is one of the essential requirements of each agriculture produces like

cereals, grains and spices. This storage will provide facility to use the produce in the
off-season. This will also help in keeping the seed in good condition for the next
crop. Thus, each and every area has the need of this storage.
M/s. MARUTINANDAN KISHAN BHANDAR at Village-DALPATPURA,

Tehsil- Ashta and District-SEHORE is the proposed concern envisaging
undertaking warehousing activity in the area. The promoter is also farmer and
network of farmer’s relationship in area (relatives and same caste farmers).
The Consultant has prepared this report based upon the information provided by the
promoter and the same collected from various other reliable sources. Promoter of
the proposed concern is well conversant with the technological and storage aspects
of the proposed venture.
The total investment in the proposed venture is estimated at Rs. 65.00 lakhs. This
includes Land and Building already constructed Rs. 90.00 lakhs. The proposed
warehouse is envisaged to operate at its optimum capacity during third year of
operation i.e. 80% of its installed capacity. Warehouse is considered to operate on
80%, 80% and 80% during its second, third and fourth year of operation. The
warehouse will provide direct employment to three persons. The break-even point is
estimated at 67% of the installed capacity.
II STORAGE DEMAND:
Storage infrastructure is necessary for carrying over the agricultural produce from
production period to the rest of the year. With most of the small farmers not
financially sound to retain produce with them till the market prices are favorable,
they need proper storage facilities to avoid wastage and reduce deterioration.
Storage facilities also enable them to meet their credit requirement without being
compelled to make distress sale of their produce.
The warehousing capacity available in India, in public, cooperative and private

sector is about 108.75 million MTs and as estimated by the Sub Group on
Warehousing and Bulk Handling set up by the Working Group on Agricultural
13
Marketing, Secondary Agriculture and Policy required for internal and external
trade, additional 35 million MTs warehousing capacity is required during the 12th
Five Year Plan period for the storage of all major crops.
To strengthen the functional areas, like Quality Control, Storage etc., the
Government carried out the organizational restructuring of FCI in the year 2010.
Further to reduce the storage under Cover and Plinth (CAP), the Government
formulated a Scheme for construction of storage godowns through private
entrepreneurs, Central Warehousing Corporation (CWC) and State Warehousing
Corporations (SWCs).
Under the scheme, the Food Corporation of India would now give a guarantee of ten
years for assured hiring to the private entrepreneurs. A capacity of about 151 lakh
tonnes is to be created in 19 states under the scheme through private entrepreneurs
and Central and State Warehousing Corporations. Out of this tenders have been
finalized for creation of storage capacity of about 89 lakh tonnes as on 15.02.2012
by the private entrepreneurs. CWC and SWCs are constructing 5.4 and 14.75 lakh
tonnes respectively under the Scheme, out of which a capacity of about 5 lakh
tonnes has already been completed by CWC/SWCs.
Various steps are taken by FCI to prevent damage to foodgrains. Prophylactic and
curative measures are carried out regularly for the control of insects/pests. Effective
rodent control measures are also undertaken. Regular quality checks are conducted
to ensure proper preservation of foodgrains in storage. Adequate dunnage is
provided for the foodgrain stocks stored in CAP. The dunnage material is cleaned
and disinfected. To protect the CAP stocks from rain, sun, etc. each stack is covered
with a polythene cover. The polythene covers are tied with nylon ropes. Wheat
stocks stored in CAP by the State Govts/Agencies are subjected to joint inspection
on a regular basis by officers of FCI and the concerned State Govts./Agencies.
Stocks are generally issued on the principle of “First in First Out” (FIFO).
Among the major agencies engaged in warehousing and storage, Food Corporation
of India (FCI) constructs godowns for its own need of procurement and public
distribution. The storage facilities of CWC and SWCs are by and large used by FCI,
traders and for stocking fertilizers.
In 2000, a High Level Expert Committee set up by the government to consider

various aspects of the problems related to storage of agricultural produce and to
improve country’s storage space and also storage technology recommended creation
of about 20 lakh tonne storage capacity in rural and semi-urban areas.
The National Agriculture Policy has also emphasised creation of storage facilities
for agri produce, particularly in rural areas. An Inter Ministerial Task Force set up
by the Ministry of Agriculture has in its report recommended in 2002 that in
14
addition to 78.83 MT available storage space in the country, 13 MT more space may
be added during the 10th Plan period. Of this, 9 MT was to be created in private
and cooperative sectors. Similarly, the 11th Plan Working Group suggested for
creation of 35 MT storage capacity with an investment of Rs. 7687 crore.
Accordingly, in 2001 the government launched Gramin Bhandaran Yojana for

construction/renovation of rural godowns in the country. The main objectives of the
scheme include creation of scientific storage capacity with allied facilities in rural
areas to meet requirements of farmers for storing farm produce, processed farm
produce, agricultural inputs, etc. and prevention of distress sale by creating the
facility of pledge loan and marketing credit. The scheme is demand-driven and not
location specific. Banks sanction the projects depending on the viability of the
project.
Necessity of Godowns:
To store food grains in scientific manner, minimise losses and maintain quality.
To avoid damages by rats, birds, small insects etc. and deterioration in quality of the
grains.
Non-availability of storage facilities at the farmers, forces them to sell their produce
during the peak harvest season, when prices are the lowest depriving of
remunerative prices.
Benefits of Godowns:
Scientific storage leads to maintain quality of food grains.
In godowns, frequent spraying of insecticides and fumigation of food grains make

them safe from rats, and small insects.
Remunerative price is realised for food grain, stored in Godowns leading to

improved income to the farmers.
The farmers can expect pledge loan of 70 % against stored produced.
If godown is run on commercial and professional lines by farmers Cooperative sales

and purchase societies, it will lead to an increase in their incomes and help in
employment generation.
The time limit of this scheme is upto 30th Jun 2021. (For the year 2020-21)
The Government of India has introduced a negotiable warehouse receipt system in

the country. The Warehousing (Development and Regulation) Act, 2007 had been
15
made effective from 25th October, 2010. As provided in the Act, the Warehousing
Development and Regulatory Authority have been set up by the Government from
26th October, 2010.
With a view to reduce storage and transit losses of foodgrains at farm and
commercial level, the Government of India had approved a National Policy on
Handling, Storage and Transportation in June, 2000. Under the policy, integrated
bulk grain handling, storage and transportation facilities to the tune of 5.5 lakh MTs
had been created through private sector participation on Build-Own-Operate (BOO)
basis.
About 65-70% of total foodgrains produced in the country are stored at farm level.
There are estimates that substantial quantities of foodgrains (about 6.0% to 10% of
total production) are damaged due to moisture, insects, rodents and fungi. The
Working Group observed that Government of India should formulate a
comprehensive Post Harvest Scheme for the farmers at the national level.
The Working Group held three meetings on 24.8.2011, 8.9.2011 and 30.9.2011
wherein detailed discussions were held among the members on the issues mentioned
above. Presentation on integration of godowns of PACS with NWR system,
Indemnity Fund and logistics parks were made by the experts from WDRA and
CWC. The Chairman and Member Secretary of the Working Group discussed the
various issues like extension of crop loan facilities to post harvest loan against
NWRs, integration of PACS godowns with NWR system, RIDF loan for
warehousing sector, liberalization of Gramin Bhandaran Yojana with senior officers
of RBI, NABARD and private banks on 21st and 22nd September, 2011 at Mumbai.
After detailed deliberations, the Working Group made the following

recommendations in its 3rd meeting held on 30.9.2011:
(i) A comprehensive “Post-Harvest Management Scheme at farm level” should be

initiated by Government of India for minimizing post-harvest losses in foodgrains
and other agricultural commodities covering incentives on purchase of scientific
storage structures, purchase of pesticides for scientific storage, publicity
programmes and stipendiary programme for farmers.
(ii) Rebate on storage charges for small and marginal farmers by Government and
Private Warehouses should be allowed to attract farmers for storage of agricultural
produce in warehouses.
(iii) Government of India may consider for some incentives to farmers over and
above the MSP on staggered procurement of foodgrains to avoid glut in the
markets/mandis during the peak marketing season.
16
(iv) Post-harvest loans against NWRs may be provided with interest subvention on
timely repayment of loan on the pattern of crop loans to farmers.
(v) Targets should be fixed for banks and financial institutions for lending against
NWRs to increase agriculture financing.
(vi) Incentives for aggregators at village level viz. cooperatives, self help groups,
farmers/producers companies may be considered so that they may collect agriculture
produce from small farmers and deposit the same in registered warehouses.
(vii) The Rural Godown Scheme may be liberalized by revising the capital cost and
increasing the maximum capacity of the warehouses upto 5,000 MTs. The subsidy
component @ 33.33% of Project cost may be fixed upto 5,000 MTs capacity and it
may be reduced by proportionate beyond 5,000 MTs
(viii) Warehousing sector should be given the status of full-fledged infrastructure so

that tax benefits and other concessions allowed to infrastructure sector may also be
availed by the warehousing sector.
(ix) The Central and State Agencies like CWC and SWCs may take the lead in
inviting private entrepreneurs for the construction of warehouses under Viability
Gap Funding (VGF) scheme.
(x) Setting up of Agricultural Economic Zones (AEZs) on the lines of Special

Economic Zones (SEZs) may be allowed by the Government.
(xi) Warehouses may be declared as mandis by the State Governments.
(xii) The Government may encourage development of modern integrated storage

facilities for the storage of foodgrains and other agricultural commodities.
(xiii) The procedures for conversion of land use need to be simplified.
(xiv) Procurement of foodgrains through NWR may be taken up in a few districts in

some DCP States on a pilot basis.
(xv) There is a need for setting up of Market Information Network for the benefit of
farmers/traders.
(xvi) Capacity building programmes for warehousing sector may be initiated by the
WDRA.
(xvii) There is a need to integrate godowns of PACS with NWR system so that the
benefits of NWR may also be availed by the small and marginal farmers.
17
(xviii) Linkage of Rural Godown Scheme with NWR system will help farmers in
seeking loan from banks against NWR.
(xix) A study through some professional organization for creation of Indemnity

Fund for warehousing sector may be conducted.
(xx) Planning Commission may identify the Ministry/Department for formulating

the schemes for the regulation and development of Agri-Logistic Parks in the
country.
(xxi) WDRA may proactively encourage the registration of all warehouses receiving
deposit of goods of others.
(xxii) Study for the assessment of post-harvest losses in important agricultural

commodities may be got conducted through some professional institution.
(xxiii) WDRA may formulate regulations for the inclusion of cold storages/
temperature controlled warehouses in the negotiable warehouse receipt system.
In future we also registered with WDRA-
THE WAREHOUSING (DEVELOPMENT AND REGULATION) ACT, 2007
An Act to make provisions for the development and regulation of warehouses,

negotiability of warehouse receipts, establishment of a Warehousing Development
and Regulatory Authority and for matters connected therewith or incidental thereto.
In exercise of the powers conferred by sub-clause (n) of clause (2) of section 35 of

the Warehousing (Development and Regulation) Act, 2007 read with sub rule (3)
and (4) of rule 3 of Warehousing (Development and Regulation) Registration of
Warehouses Rules, 2010 the Warehousing Development and Regulatory Authority
hereby notifies the list of commodities for storing in the warehouses for
implementation of the provisions of the Act:-
1. Wheat
2. Rice
3. Paddy
4. Jowar
5. Bajra
6. Barley
7. Maize
8. Ragi
9. Soyabean*
10. Mustard seed
11. Rapeseed
18
12. Groundnut
13. Groundnut (pods) bag
14. Whole pulses and split pulses
15. Sunflower oilseed
16. milled pulses
17. Cotton bales*
18. Cotton seed
19. Jute bales*
20. Chillies*
21. Tamarind seed
22. Cumin seed*
23. Castor seeds
24. Cashew kernel
25. Arecnut
26. Black pepper*
27. Coriander*
28. Fennel seeds*
29. Fenugreek seeds*
30. Guar gum*
31. Sesame seed
32. Horse gram
33. Isabgol*
34. Black gram (Flour)
35. Coffee beans
36. Sago*
37. Turmeric*
38. Ball Copra
39. Cup Copra*
40. Cardamom*
*Commodities subject to need based laboratory testing.
2. Qualitative specifications/standards for above commodities will be of Agmark.

However, in case, Agmark standards do not exist, for those commodities quality
standards laid down by the Central/State Government shall be applicable.
3. For commodities requiring chemical or allied laboratory analysis, all Agmark

laboratories and all accredited laboratories, notified by National Accreditation
Board for testing and calibration laboratories including recognized laboratories
accepting Bureau of Indian Standards schedule of charges are authorized for
laboratory testing.
4. In addition, all Central/State Government laboratories and other laboratories

recognized by them for testing of commodities are authorized for laboratory testing.
19
We confirm that we have constructed the warehouse godown to the as per

specification relating to the implementation of Negotiable Warehouse Receipt
system as per specification, norms and guidelines of “NABARD”.
The storage plan of the government of aims at providing the capacity required for
(1) Buffer and operational stock of food grains to maintain the public
distribution system.
(2) General warehousing.
The broad approach is to provide scientific storage capacity and reduce dependence
on the capacity under and plinth.
As already discussed in the report that there are three agencies in the public sector,
which are engaged in building large-scale storage/warehousing capacity namely.
Food Corporation of India (FCI), Central Warehousing Corporation of India (CWC)
and 16 State Warehousing Corporations (SWCs). Over a period of time, sizeable
scientific storage/warehousing capacity has been developed by these public agencies
and they are implementing plans to mainly for storage of food grains that with CWC
in SWCs is used for storage of food grains as also certain other items.
Current Status of Warehousing Capacity in India-
The warehousing capacity available in India, in public, cooperative and private

sector is about 108.75 million MTs. The warehousing capacity available in India,
with various agencies/sectors is as follows:
S.No. Name of the Organization /Sector Storage Capacity in

Million MTs
1. Food Corporation of India (FCI) 32.05
2. Central Warehousing Corporation (CWC) 10.07
3. State Warehousing Corporations (SWCs) 21.29
4. State Civil Supplies 11.30
5. Cooperative Sector 15.07
6. Private Sector 18.97
TOTAL 108.75
Central and State Governments are still facing severe storage crises at the time of
crop harvesting season. During this period, the farmers and the agencies engaged in
purchasing of different crops in the country are finding themselves unable to
purchase and store the full crop available in the market. One of the major reasons of
lesser purchase is the non-availability of scientific storage facilities.
20
It is also a well known that the small farmers do not have the economic strength to
retain the produce with them until the market prices are favorable. There is a felt
need in the country to provide to the farming community with facilities for scientific
storage so that wastage and produce deterioration are avoided and to enable it to
meet its credit requirement without being compelled to sell the produce at a time
when the prices are low. Thus, the network of rural god owns will enable small
farmers to enhance their holding capacity in order to sell their produce at
remunerative prices and avoid distress sales.
The production of cereals, pulses and grains are increasing day by day, as the yield
per acre of land is increasing due to hybrid varieties of seed and improved ways and
means of agriculture.
This high production has resulted in seasonal gluts and consequent low prices are
common phenomenon in the post harvest seasons all over the country.
The All India Rural Credit Survey appointed by the RBI in 1951 and the Expert
Committee on Agriculture Marketing appointed by the Ministry of Agriculture in
2000 recommended creation of scientific storage facilities for the farmers and
developing a negotiable warehouse receipt system to facilitate credit to the farmers.
The Inter-Ministerial Task Force on Marketing Reforms constituted by the Ministry
of Agriculture and Working Group on Warehouse Receipts & Commodity Futures
constituted in April, 2005 also recommended for introducing negotiable warehouse
receipt system with legal backup in the country.
During the gluts season, not only do the prices decline to lowest levels, but certain
amount of grains and pulses are spoilt as well. By keeping the excess supply in
warehouse, the gluts and low prices can be avoided to the advantage of growers. At
present Village-DALPATPURA, Tehsil- Ashta and District-SEHORE and nearby
farmers are producing all cereals and grains in huge quantity and of good quality.
Thus for better return every big farmer as well as businessperson wishes to store
some of its collection/produce in the nearby warehouses. If at this junction, he
founds that either the warehouses are booked or he has to store its produce in a
distance warehouses.
Agricultural production
Agricultural production continues to be significantly influenced by southwest
monsoon rainfall and with near normal rainfall following a year of deficient rainfall
in the previous year, production of food grains rebounded in 2010-11. Growth in
agriculture and allied sectors as per national account data is placed at 7.0 per cent in
2010-11 and is estimated at 2.5 per cent in 2011-12. Driven by increase in rice and
wheat production, food production is estimated at an all-time record level of 250.42
million tonnes in 2011-12 as against a high level of 244.78 million tons in 2010-11.
Thus, while growth in the current year might be lower than the previous year; this
21
has been achieved against a high base level. As per the Second Advance Estimates
released by Ministry of Agriculture, in 2011-12 the production of rice is placed at
102.75 million tonnes; wheat at 88.31 million tonnes and cotton at 34.09 million
bales of 170 Kg each. However, production of pulses is estimated to decline to
17.28 million tonnes in the current year from a level of 18.24 million tonnes in
2010-11. The estimated production of sugarcane in 2010-11 at about 342.4 million
tonnes, is expected to rise to 347.9 million tonnes in 2011-12. The production of
oilseeds is estimated at 305.29 lakh tonnes in 2011-12 as against 324.79 lakh tonnes
in 2010-11. While the above indicates some improvement in the levels of
production in recent years, growth in agriculture and allied sectors have fallen short
of the Plan targets. Even in the Eleventh Plan period, average annual growth in
agriculture and allied sector is placed at 3.3 per cent as against a target of 4.0 per
cent. Given the obvious limitation in coverage of area, long-term growth primarily
depends on yields in crops. This has been sought to be achieved through 6.5 per cent
in December, 2011. Food inflation for all CPIs and the WPI moderated about 2 per
cent in December, 2011.
GDP growth
As per the Advance Estimates released by the Central Statistics Office (CSO), the
Indian economy is estimated to register a growth rate of 6.9 per cent in 2011-12 in
terms of GDP at factor cost as against 8.4 per cent each in 2009-10 and 2010-11.
The growth is on the lower side not only as compared to the recent past but also
when seen in the context of growth trends since 2003-04. The slowdown in the
growth of the economy in 2011-12 is mainly on account of the respect of these
indicators was 8.1 per cent, 7.5 per cent and 22.7 per cent respectively in 2010-11.
The growth of investment in the economy is estimated to have registered a
significant decline during the current year. This has been on account of a sharp
increase in the policy rates that resulted in higher costs of borrowings. As per the
Quick Estimates released by the CSO, gross domestic savings as a ratio of GDP at
current market prices (savings rate) declined from 33.8 per cent in 2009-10 to 32.3
per cent in 2010-11. This decline is accounted for by a reduction in private savings,
primarily the household savings in financial assets and somewhat by a reduction in
corporate savings. Public savings on the other hand registered an increase during
2010-11.
Overview of the Economy

The Indian economy is estimated to grow by 6.9 per cent in 2011-12 in terms of
gross domestic product at factor cost at constant 2004-05 prices. This follows a
growth of 8.4 per cent in 2010-11. Relative to high growth in the period 2003-04 to
2010-11 (with the exception of 2008-09), growth in 2011-12 is on the lower side.
This is attributable mainly to weakening industrial growth in a milieu of persistent
inflationary pressures and deterioration in the global economic situation. Monetary
policy tightening to control inflation and inflationary expectations typically operates
through a compression in aggregate demand and this was in evidence in 2011-12.
22
The Reserve Bank of India (RBI) raised policy rates by 375 basis points since
March 2010. The impact of tight monetary policy, particularly gets reflected in the
quarterly growth rates of GDP. Growth in the first three quarters of the current fiscal
came down successively. However, relative to many other economies in the world,
growth of 6.9 percent in India is among the highest. The slowdown in the economy,
coupled with rising costs and narrowing profit margins of the corporate sector led to
a lower than budgeted growth in government revenues. On the other hand, higher
than targeted public expenditure, mainly due to higher subsidy requirement, had
implication for the level of fiscal deficit. The financial markets broadly reflected the
impact of the global events and the impact of tightening monetary policy stance.
The deterioration in global economy in the latter half of 2011-12 led to sharp capital
outflows and put pressure on the exchange rate. This trend has reversed in January
2012. Inflation in terms of most indices has exhibited downward trends in the recent
months as a result of the measures taken by the Government and the Reserve Bank
of India (RBI). There are some signs that the slowdown in economic activity has
bottomed out and a gradual upswing is expected in 2012-13.
Credit Analysis & Research Ltd. (CARE Ratings) recently released a report
analyzing the problems and opportunities existing in Agri-Warehousing in
India. The full report follows below:
Background
Indian economy is an agrarian economy with over 70% of the population engaged in
activities related to agriculture. Indian food grain production has grown at an
average rate of 1.20% over a period from 1994-95 with production of 192 million
metric tonne (MMT) to an all time record output of 232 MMT in 2010-11 (15 years)
and with the expectation of good monsoon in FY12 the uptrend is likely to continue.
A major part of the food grain production consists of rice at about 94 MMT (41%)
and wheat at about 82 MMT (35%). Further, production of Rabi and Kharif crops is
now almost equal on account of growth in Rabi crop due to increased production of
wheat, rice, cereals and pulses. All these taken together have drastically increased
the need for storage capacity in India.
Food-grain storage capacity in India
India has total agri warehousing capacity of around 91 MMT at present to store and
conserve such large quantities with state agencies owning 41% of the capacity and
the balance distributed among private entrepreneurs, cooperative societies, farmers,
etc.
However, these government agencies use 66% (60 MMT) of India’s total agri
storage capacity which also includes hired capacity of 23 MMT. The total state
owned storage capacity of 37 MMT is held through three public sector agencies viz.
Food Corporation of India (FCI), Central Warehousing Corporation (CWC) and
State Warehousing Corporation (SWC).
With the average buffer stock norms for food grains of around 25 MMT and peak of
32 MMT in July every year, the storage capacity available with Government
23
agencies is primarily used for keeping central stock of food grains for the buffer
stock, public distribution systems and other Government schemes.
The graph below presents, the stock levels maintained by the state agencies and the
buffer stock norms for the past 10 year period.
Due to insufficiency of covered storage capacity of food grains, which was around
47.55 MMT as on March 31, 2000 and due to progressively increasing government
stocks, considerable amount of food grains had to be stored under open Cover and
Plinth (CAP) storage and to an extent in hired capacities, mainly during the year
2000 to 2003. But with the falling procurement levels between 2002-03 and 2006-
07, the additional capacities hired by FCI during higher procurement levels in 2000-
01 and 2001-02 had to be released due to idle capacities.
The years from 2007-08 to 2009-10, saw highest ever levels of procurement of food
grains by Government agencies, resulting in severe strain on the available storage
capacities. Higher minimum support price (MSP), better reach and consequent
higher procurement helped ensure better and remunerative prices to farmers.
However, it caused strain on available storage capacities with the State agencies
involved in procurement.
Before 2000, private sector interest in warehousing industry was low due to its
capital intensive nature and high uncertainty over revenue generation.
The chart below indicates the total storage capacity in the country and the
ownership distribution as on two different dates with a period of 10 years:
As evident from the chart above, private sector interest in warehousing industry
picked up after the “Rural Godown Scheme” was introduced in year 2001-02 under
National Bank for Agriculture and Rural Development (NABARD) and National
Cooperative Development Corporation (NCDC).
The warehousing capacity built over past 10 years, especially those sanctioned by
NABARD have an average storage capacity per warehouse of 1,261 metric tonne
(MT) and around 75% of numbers of godowns have capacity of less than 1,000 MT.
The development of small and medium godowns indicates that most of them have
been built by farmers or a community of farmers thus ensuring that distress sale is
reduced and better prices are paid to farmer for their produce.
Apart from this there are few large national level players which have emerged over
the last decade owing to the available capital subsidy. These include National Bulk
Handling Corporation Ltd., National Collateral Management Services Ltd., Adani
Agri Logistics, Star Agriwarehousing & Collateral Mangement Ltd., Shree
Shubham Logistics Ltd., Ruchi Infrastructure Ltd., Guru Warehousing Corporation,
Paras Warehousing and LTC Commercial.
Regional Imbalance
The storage capacity in India is mainly concentrated towards production centres as
indicated by the graph below:
Only 22% of total storage capacity is available in the major consumption states.
Even some of the states have got storage capacities of less than one month of their
requirement. While obvious factors like proximity to the major mandis in the state,
24
differences in the quantities of food grain and pulses produced within the state, etc.
are the major causes behind the regional imbalances, other key factors like the
extent of interest and initiative shown by bank officials in promoting the concept of
rural godowns to local entrepreneurs, publicity and awareness created about the
scheme at the local level, etc. also played a major role behind these regional
imbalances. In short, dominant producers of food grain and related agricultural
products comprise the majority of godowns and storage capacity.
Regulator for warehousing
With a view to increase the participation of private sector and development &
regulation of warehousing industry, Government of India introduced ‘The
Warehousing (Development and Regulation) Act’ in September 2007. The main
focus of this Act is to establish a regulated environment for issuance of Negotiable
Warehouse Receipt (NWR) under Warehousing Development and Regulatory
Authority (WDRA) which was constituted in October 2010 under the said Act. The
functions of WDRA include registration and accreditation of warehouses intending
to issue NWR. WDRA, since inception had granted accreditation to 51 applications
out of 300 applications submitted as on March 31, 2011.
Bottlenecks
Even with significant development of storage capacity sanctioned under NABARD
and NCDC schemes, it is estimated that around 20-30% of the total food grain
harvest is wasted due to inadequate storage capacity, regional imbalance in
warehouses, lack of adequate scientific storage and inefficient logistic management
in the country. It is said that each grain bag is handled at least six times before it is
finally opened for processing which leads to higher storage & transportation charges
and also increases to wastage of food grain during transit & handling.
Further, the storage capacity available with State agencies are primarily used for
keeping central stock of food grains for the buffer stock, public distribution systems
and other Government schemes which consequently leaves only a marginal capacity
for other players to store their produce.
Food grain (mainly wheat & rice) is the main commodity stored, while the other
major crops storable in the godowns include oilseed, spices and cotton. Though the
government has started focusing on building storage capacity through various
schemes, the focus is still largely on the storage of wheat and rice which are
considered as staple food in the country.
Also due to the existing regional imbalance the government’s capacity to procure
produce is limited outside
Northwest India, which has recently led to fall in wheat prices and compelled the
farmers to sell their produce below its MSP.
With all these issues, much needs to be done to built additional storage capacity,
renovate existing warehouses and implement a robust system of NWR to make
available more funds to farm producers and simultaneously provide security to the
lenders.
25
Way ahead
1. Capacity of warehouses to be built:

Though the storage capacity has increased at a CAGR of 6.7% during the last
decade till March 2010, the irony remains that around 20-30% of the total food
grain harvest is wasted due to lack of availability of storage capacity, regional
imbalance in warehouses, lack of adequate scientific storage and inefficient logistic
management in the country. Albeit, with adequate storage capacity in place, a
normal handling loss of around 5-7% is expected to continue.
Two things needs to be addressed at this stage, 1) to build additional storage

capacity and 2) upgrade the existing state owned warehouses. Most of the
warehouses owned by state agencies are over 15-20 years old and hence the same
needs up gradation to contain wastage levels. With present state owned capacity of
37 MMT and renovation cost of around Rs.1, 000 per metric tonne, the total
required capex is expected to be around Rs.37-40 bn.
In order to balance food grain production to consumption (for both Kharif and Rabi
crops), a total peak storage capacity required works out to be around 70% of annual
production. With annual food grain production of 232 MMT the required storage
capacity is around 162 MMT which indicates a deficit storage capacity of 70 MMT
at present levels. The same could be verified by taking base of wastage level. So
with the wastage level of around 30% (with production level of 232 MMT), the
deficit storage capacity works out to be around 70 MMT.
As per the recently sanctioned projects under NABARD for some private players
rated by CARE, the construction cost for the modern warehouses was in the range
of Rs.4,000-6,000 per metric tonne of capacity created and hence the total
construction cost for building of 70 MMT storage capacity would be around Rs.350.
Assuming that all the godowns are supported by capital subsidy the total capital
subsidy outlay would be around Rs.84 bn. Further, considering wastage of around
70 MMT, the foodgrain loss is also to the tune of Rs.70-100 bn.
This indicates that the capital subsidy burden for new warehouses and for
renovating the existing state owned warehouses would largely be compensated by
the savings in food grain in two-three years. Hence, it makes sense to extend the
Rural Godown Scheme beyond 2012 with more focus on building capacity in
consumption centres as only 22% of the total storage capacity is available in the
consumption states.
2. Need to focus on other commodities also

The major storage capacity of government agencies are occupied by wheat and rice
which leads to acute shortage for storage capacity for other food grains and agri
commodities. With production of 40 MMT of coarse cereals (bajri, jowar, corn,
etc.), 16.51 MMT of pulses, 27.85 MMT of oilseeds, 336.7 MMT of sugarcane and
33.93 million bales (1 bale = 170 kg) of cotton more focus should also be given for
efficient warehousing of such commodities to minimise wastage.
26
Over the years warehousing business has been transformed to a great extent from
merely a storage infrastructure to a one stop shop for supply chain management
through the entry of private sector. Nowadays the goods are stored as per the
scientific methodology to protect them against the quantitative as well as qualitative
losses occurring due to unavoidable circumstances such as floods, pest attacks, etc.
Hence, ‘warehouse performance indicators’ should be introduced to check the
efficiency of the warehouses which now should include quality parameters like
ability to control wastage, pest control measures, provide wide range of testing,
grading and certification services which can help in ascertaining the value of the
commodity deposited and bring transparency among all interested entities.
3. More warehouses to issue NWR

Generally, at the time of harvesting, the price of agricultural commodities tends to
be lower because of positive supply situation and farmers often do not get adequate
price for their produce. By depositing their produce in a registered warehouse and
obtaining NWR, farmers can use it as collateral for obtaining short-term borrowing
for their working capital requirement for the current sowing season from banks.
Further, when the prices become favourable, the farmer can sell the same, repay the
loan and get a surplus income.
The introduction of NWR system in the country would not only help farmers to
avail better credit facilities and avoid distress sale but would also safeguard
financial institutions by mitigating risks inherent in credit extension to farmers. The
pledging /collateralization of agricultural produce with a legal backing in the form
of NWR would lead to increase in flow of credit to the rural areas, reduce the cost of
credit (due to certainty of recovering credit by the bank) and would spur other
related activities, like standardization, grading, packaging and insurance services in
the agricultural sector. With the increased requirement of quality storage,
warehousing industry would also get a boost in rural areas. This would also fill gaps
in the logistic chain of agri-business in the rural sector.
Apart from individual farmers, cooperative societies and Self-Help Groups (SHGs)
would also be able to assist their members’ particularly small and marginal farmers
by aggregating their surplus produce and keeping the same in registered
warehouses. An established NWR system would also act as an incentive for farmers
to produce goods of quality and specification amenable to standardization and
storage in registered warehouses.
III STORAGE CAPACITY:
Proposed concern has decided to construct a warehouse suitable for the storage of
39180 bags (i.e.3918 MT) of 100 Kg. Here, the promoter will provide the facility to
farmer to store their goods and in turn, the proposed warehouse would get the hiring
charges.
27
The hiring charges would be depends upon the number of bags stored and the period
for which it would be kept in the warehouse. In general, the storage period
considered in terms of months only and accordingly hiring charges were billed and
collected.
Proposed warehouse is considered to operate on 80%, 90% and 90% capacity

utilization during its second, third and fourth year of operation, accordingly the
hiring receipts is estimated at Rs. 27.76 lakhs, Rs. 30.73 lakhs and Rs. 30.73 lakhs
respectively. The details of profitability and receipts are given in Annexure E.
IV STORAGE MANAGEMENT:
Handling and storage of agricultural produces requires special attention to avoid

losses due to spoilage and wastage. In India, there is huge loss of agricultural
produce and inputs during handling and storage, which is mainly due to storage of
grain in structures not equipped with provision for minimizing risk of insect
infestation, seepage of ground and rainwater etc. The object of an ideal grain storage
structure is to control and reduce the storage losses, from rodents, insects and
microorganisms, birds, moisture and heat, to a minimum,
Post Harvest Schemes for Minimizing Foodgrain Losses
About 65-70% of the total foodgrains produced in India are retained by farmers for
their self-consumption or meeting their other financial requirements. The foodgrains
at farm level are stored in traditional as well as in modern storage structures. A large
number of traditional rural grain storage structures are found in India. These
structures are made of locally available cheaper materials like mud, bamboo, wood,
paddy and wheat straw and stones.
Foodgrains are stored in bulk in these storage structures, which are neither rodent
proof nor moisture proof. These structures cannot protect the foodgrains from
insects, pests, fungi and rodents. There are estimates that substantial quantities of
foodgrains (about 6.0% to 10% of total production) are damaged in these storage
receptacles due to moisture, insects, rodents and fungi.
For detail specifications of storage, the promoting concern shall consider the Indian
standard viz. IS 607-1971. Storage process has following steps.
1. Inspection at the time of receipt of food grains.
2. Preparation for Bag Storage.
3. Storage
4. Dunnage
28
5. Stacking of Bags
6. Periodical Inspection and Treatment of Stocks
7. Delivery
Briefs of these steps are given below:
1. INSPECTION AT THE TIME OF RECEIPT OF FOOD GRAINS
At the time of receipt, food grain carriers like trucks or carts are carefully inspected
for damp and infested food grains. If dampness is above the prescribed limits, either
the material would be rejected or it would be asked to dry it. The prescribed limits
of dampness for various food grains are given in the table below:
Sl.No. Commodity Permissible moisture

content %
1. Paddy 14
2. Wheat, Jawar, Maize, Barley, Ragi and Bajara 12
3. Pulses (whole & broken) 12
4. Gram Kabuli and Desi 12
5. Wheat Atta, Maida, Besan and Suji 12.5
6. Oil seeds and cakes like groundnut and 6 tp. 10
soybeans etc.
7. Root Crops and Starch like Arrowroot, Edible 12 to 13
tapioca and sago etc.
Evaluating the conditions and storability of given lots of grains and seeds is of great
benefit to all those concerned with marketing storage and processing of grains,
seeds and their products.
A combination of tests involving moisture content, fact acidity, alcoholic acidity,

temperature measurement, number and kinds of moulds present, and viability should
serve to predict storage behavior and extent of actual damage.
Determination of Moisture is through the test described in IS 4333 (Part II) - 1967.
The moisture content and temperature measurement, indicates whether there is
present of future danger, fact acidity and alcoholic acidity gives an indication of the
actual damage which has already occurred, and viability, whether incipient
deterioration has developed.
29
2. PREPARATION FOR BAG STORAGE
Bags used for storage are either new or sound second hand bags. These bags should
be of good quality and according to the specific food, grain need like sugar and
wheat require different types of bags.
All bags, prior to storage, shall be examined and damaged bags (cut, torn, slack) or
those containing damaged food grains, shall be segregated.
3. STORAGE
Depending upon the capacity of the Bags Storage Capacity (BGSS) and the size of
fumigation covers available; the floor area is marked into a number of rectangular or
square stack spaces. Care is taken to leave alleyways of 75 cm minimum width
between the stacks and walls and also in between the stacks.
The width of the alleyways in form of door opening should be 1560cm. The length
and breadth of a stack shall not more than 9 m and 6 m respectively.
4. DUNNAGE
Dunnage comprising timber pallets, timber squares, matting or a layer of

polyethylene sheet sandwiched between two layers of bamboo matting shall be laid
on each stack space. The pallets or square shall be made preferably of hard and
well-seasoned timber and shall be free to each fungus/insects and distance between
two parts shall not be more than 15cm apart. Before laying the Dunnage, the floor
shall be brushed and clean. Squares shall be exactly equal to either the length or the
breadth of the stack space. After the Dunnage, the floor space between them as well
as the Dunnage itself shall be sprayed with 0.5 per cent melathion emulsion.
5. STACKING OF BAGS
To store maximum number of bags following points should be consider at the time
of stacking:
1. All bags in a given stack are of uniform size and weight.
2. The stack is built over the Dunnage as laid on the stack space.
3. Each stake shall contain produce of one type only.
4. The stack is so built that when completed, it is stable and perfectly cuboids in
shaped and also that all peripheral bas on faces of the stack are in place
without face of the stock bulging outward or inward at any point.
30
5. Each stack bears a tally card giving details of date or receipts organization,
kind of food grains, number of bags and average weight of each bag, nature
of Dunnage provided, date of dispatch, date of inspection and other relevant
data about stack and signature and remarks of the inspector.
6. While estimating the height of the stacks, care shall be taken to see that a
minimum of 2 m clear space is left between the top surface of the stack and
the inside surface of the roof (or ceiling.)
7. The maximum height to which the bags of food grains may be placed in a
stack depends upon the load bearing capacity of floor, nature of commodity,
strength of container etc. However, for practical purpose, the maximum
general height of stacks of different food grains shall not exceed the limits
given below:
Name of Different Food grains Max. General Approx

stack height height in
bags metes.
Sugar (packed in A-twill bags) 24 6
Turmeric 18 4.5
Wheat, Maize, barely, paddy oats, grain and 16 4

other milled whole pulses, sorghum, other
millets, oilseeds, oilcakes, and coffee seeds
Wheat flour, gram flour, semolina, broken 12 3
pulses, other milled products, cashew not
kernels, fertilizers and pesticides
Tamarind and jugglery chips in bags 3 1.5
Jugglery lumps 1 to 1.5
8. The stack size considered in the project is 9.15m *6.15m *4.57 m. The
capacity of storage of each stack is approximately 300 bags of 50 Kg or 1728
bags of 95 Kg or bags of 100 Kg. With this, if we assume that the proposed
warehouse would store bags of 100 Kg only than around 24 stacks would be
arranged in the proposed warehouse.
6. PERIODICAL INSPECTION AND TREATMENT OF STOCKS
Each stack shall be inspected at least once in two weeks to check the condition of
food grains. Agricultural produce may be inspected for any increase in moisture
content, temperature and damages.
31
The insect infestation shall be classified as negligible, moderate or heavy depending

upon number of major and minor pests found in the sample of grams. The stack
having moderate infestation shall be fumigation.
If rats are observed, doing damage their points of entry in the BGSS shall be
checked up and necessary measures to protect their ingress, adopted. In addition,
position baiting by suitable method shall be taken recourse to inside the BGSS. If it
is observed that damage is being caused by dampness due either to seepage of water
from the floor or from the walls of the BGSS or due to leakage or rainwater, the
source of dampness or rain shall be removed by adopting necessary measured for
protection against ingress of dampness or rain. In addition, the stack shall be broken,
the damaged food grains segregated, and undamaged food grains salvaged. Each
and every stack shall be periodically treated by the prescribed method. All cut bags
in the stacks are either suitably repaired or replace.
As discussed above that for proper management of fumigation and other rat/insects
preventing would be applied in the proposed warehouse on periodical basis.
7. DELIVERY
On demand of the owner of the stock, material would be handed over to him after
receipt of full hiring charges.
The cost of fumigation Dunnage like bamboo etc. are estimated based upon the
storage capacity. The costs of these are estimated at Rs. 0.12 lakhs. The details of
these are given in Annexure-F.
V UTILITIES & SERVICES:
The total power required shall be 4.00 H.P. and the annual bill is estimated at Rs.
1.30 lacs. The concern will take required quantity of water from the nearby local
supply. Details are given in Annexure-H.
VI LOCATION, LAND, BUILDING AND LAYOUT:
The proposed warehouse will be located M/s. MARUTINANDAN KISHAN

BHANDAR at Village-DALPATPURA, Tehsil- Ashta and District-SEHORE. The
concern has sufficient land in selected village. Warehouse proposes to construct
sufficient land, which will cost Rs. 100.50 lacs. These construction costs exclude the
cost of Site Development & Land Cost, as the land selected by the promoter is own
land.
32
Building considered in the project is storage shed, office and labour quarter. The
size and cost considered of each shed considered in the project is based upon the
prevailing market prices and as per the need of the project. Specification of building
should be as per the requirement of the project.
The details of Building and Site Development are given in Annexure B. Layout and
estimates of the building and other civil works be submitted by the promoting
concern separately.
VII ORGANISATION, MANPOWER AND WAGE BILL:
The proposed warehouse is to be setup by as a proprietary concern M/s.

MARUTINANDAN KISHAN BHANDAR at Village-DALPATPURA, Tehsil-
Ashta and District-SEHORE. In order to assist the concern in day-to-day activities
of the proposed warehouse a team of qualified and suitable people shall be
employed as per details given in Annexure-G. In total, the warehouse will provide
employment to three persons. The annual wage bill of the warehouse is estimated at
Rs. 5.52 lacs. It has been considered that people of adequate skills for operating
different activities shall be easily available at the proposed location.
VIII SCHEDULE OF IMPLEMENTATION:
The schedule of implementation has been drawn based upon identification of different
activities to be undertaken and the time taken in completion of each one of them.
S.No. Activity Duration in Weeks

Commencement Completion
1. Possession of Land Already over
2. Construction of Building 30 35
3. Electricity/Power Connection 35 36
4. Commercial Working 37 38
It is envisaged that the warehouse will start working within nine months of sanction
of term finance, which has been considered as the reference time.
The promoter of the proposed concern is well conversant with the roles of various
agencies in putting up the enterprise; hence no difficulty can be foreseen in bringing
the warehouse as per above drawn schedule.
33
IX COST OF PROJECT AND FINANCE MIX:
The total cost of project has been estimated at Rs. 65.00 lakhs as per the details
given below:
1. Purchase of Warehouse 65.00

2. Misc. Fixed Assets 0.00
3. Contingencies 0.00
4. Preliminary & Preoperative Expenses 0.00
Total 65.00
 Building and Other Civil Works: The proposed warehouse will construct
suitable building on the selected plot in the village. The total cost of site
development and building is estimated at Rs. 65.00 lakhs. The details about type of
building, their built up area and construction rates are provided in Annexure - B.
 Misc. Fixed Assets: the different asset has been taken based on information
furnished by the concern and collected from local area.
 Contingencies : A provision of 0.00% of the cost of fixed assets has been

considered in the project cost to take care of the escalation of prices of fixed
assets during implementation of the project.
 Preliminary and Pre-operative expenses: Pre-operative expenses like

interest during construction, mortgage expenses, insurance, establishment
and traveling expenses during construction have been estimated. The details
are provided in Annexure-D.
Finance Mix
The total investment of the project is arrived at Rs. 65.00 lakhs and it is proposed to
be finance in the following manner:
S. No. Particulars Total Cost (Rs in lacs.)
1. Promoters Contribution 13.00
2. Subsidy through NABARD
3. Term Loan from Bank 52.00
Total 65.00
On the basis of above finance mix the debt equity ratio for the proposed project is
estimated at 4:1
34
X COST OF STORAGE AND PROFITABILTY ESTEMATES:
Operating cost and revenue generation from the Project during eleven operating
years has been estimated and shown in Annexure - E. This is based on the marketing
and technical data given in the earlier sections of the report. Profitability estimates
are based upon the following assumptions:
 The warehouse is assumed to be operating at an optimum of 90% capacity

utilization during third year and onwards of its operation.
 The financial projections are prepared based on the current market prices. It
is assumed that the prices will remain constant during the period under
consideration.
 Salaries and wages are increased annually at the rate of 5% of the basic pay
and the benefits to the employees are considered at 20% of the salary and
wages.
 Insurance is calculated at the rate of 1.75% on all the fixed assets. Provision
of repairs maintenance has been considered @ 1% of the fixed cost.
 Offices overhead are considered on lump sum basis and these are estimated
at Rs. 0.10 lakhs on per annum basis. These include the expenses like
stationary, traveling and telephone.
 No stocking commission has been considered in the project; as the proposed
project area have sufficient demand of the activity.
 Pre-operative and contingency expenses have been apportioned to various
fixed assets based on their cost as given in Annexure - .
 The interest on term loan has been taken @ 10.00% per annum as per the
guidelines of Banks. Quarterly estimates of interest are given in Annexure.
XI CONCLUSION:
In the post green revolution era, there is a significant growth in the production and
productivity in Indian agriculture, the country has become self sufficient in food
grains and achieved a remarkable growth in the production of pulses, oilseeds and
fibers to meet the requirements of the country. However, due to non-availability of
good storage the farmer have to sell its product in the market during season itself.
This gives less return to the farmer and more return to businessperson if they further
store it. Thus farmer become poor and poor going further down every year, after
producing good crops.
The above status of farmers reveals that the good grain producing area like ASHTA
must have sufficient capacity of warehouses. In this M/s. MARUTINANDAN
KISHAN BHANDAR at Village-DALPATPURA, Tehsil- Ashta and District-
SEHORE is proposing to build and run warehouse of 3918 MT in Village.
35
This Warehouse for nearby farmers so that they can utilize the warehouse facilities
on pay-and-use basis. As per the market trend we can take as rent. In return farmers
can avail bank loan against warehouse receipt. Here you have to adhere with
guidelines of Warehousing (Development & Regulation) Act 2007 and you should
be eligible to issue ‘Negotiable Warehouse Receipt (NWR)’ by fulfilling the
documentation & procedures for accreditation & registration of warehouse.
Another option is to apply for ‘rent agreement’ with state warehousing corporation
after construction of godowns as per norms. Provided the warehouse construction is
as per norms and it has got good road connectivity the state warehousing
corporations in our area could execute rent agreement as per their norms. We have
to inquire State Warehousing Corporation in our area to ensure that at what stage
state warehousing corporation will take the proposed warehouse on rent and what
rental they will give. We can also talk to PDS department in our state.
Another option is lease to private companies and for goods other than foodgrains.
Lots of companies need storage facilities near big cities and they can give you
attractive rent. This project may be viable given high rent paid by private
companies. Once the income stream is secured by way of rent agreement they
decided to complete the warehouse as soon as possible; and straightaway putting the
project proposal with their bank.
The need for storage areas is essential for wholesalers and c&f agents. If we are
wholesalers/distributors and paying rent to someone else, then it is profitable option
to build our own warehouse.
Hence the challenge is to complete the warehouse structure at minimum cost

without compromising with acceptable standards for laying down durable structure
and which is termite proof, rodent proof & damp proof. And during the process of
implementation we have to continuously lookout for suitable lessee.
Storage of harvested crops is also part of the agricultural marketing process. This is
especially true when the crops involved are connected with futures contracts in the
commodities market. Once harvested, the crops can be transported to storage
facilities, where the holder of the contract can then arrange for their sale, making it
possible to earn a return on the investment. The agri-marketing effort continues,
allowing those investors to connect with buyers and complete transactions that are
ultimately beneficial to all parties concerned.
At the present position 96 villages surrounding in SEHORE from 10-15 distance of

our project site and grain, pulses, oil seeds and other agricultural produce for
auction in SEHORE. Manly FCI, State Civil Supply deptt. State Warehousing and
Logistics Corporation and MCX/NCDX are also requiring more and more storage
capacity in area for commodities of agricultural produce.
36
Agriculture Produce Market Committee, SEHORE is one of the most important

Produce Market Committee in Madhya Pradesh.
Looking to the Demand - Supply gap of warehouse in the area the Consultants opine
that the proposed venture is technical feasible, economical viable and deserves
support agencies involved in the warehousing. Promoter is also careful and assure
for running warehouse from backward and forward linkage.
In a country where millions go hungry every day and where food prices are breaking
the back of the common man, a bumper harvest is rotting in godowns. Headlines
Today correspondents across the country found the shocking truth.
Project is technically & financially viable. At present there is no warehouse in the

village. Hence there is ample scope of private housing separation while no any other
warehouse in surrounding area so big farmers, agriculturist and businessman
demand storage godowns.
Backward Linkage with farmers with reference to either providing services or

purchase of raw material: The promoter also itself engaged in production of
fruits/vegetables as well as having good contacts with the progressive farmers of
their area. The beneficiary has already its own raw materials for sorting, grading,
cleaning & primary processing as per the demand of market. Moreover number of
other farmers willing to provide their raw materials for storage of produces. Approx.
500-1000 farmers to be benefited.
Forward Linkages- Analysis of domestic and export markets, tie up made for sale
of Produce and branding aspect: Due to the shortages of storage capacity in the area,
the farmers have to go faraway places for storages of foodgrains. Thus there is
ample of potential for more modern technology based warehouse units in that area.
Instead of trying to solve the problem, the government plans to increase

procurement and has also disallowed exports to meet the projected requirement of
grain under the proposed Food Security Act.
Estimates are that foodgrain production including wheat, rice, pulses and coarse
cereals will go up to a record 235.88 million tonnes this year compared to the earlier
record of 234.47 million tonnes in 2008-09.
Hundreds of tonnes of wheat and rice are rotting in godowns across the nation - the
reason being there is simply no space. So, while paddy sacks are dumped inside
classrooms in Andhra Pradesh, wheat is left to rot on the roadside in Kurkshetra and
37
sacks can be seen lining up parking lots of residential areas in the fertile wheat belt
of Punjab and Haryana.
The current storage capacity is 62.8 million tonnes, which is proving inadequate.
India had record rice and wheat stocks of 65.6 million tonnes in its godowns in early
June. Officials say the problem will only get worse after the kharif harvest arrives
by September-October.
The bumper rot is in spite of the Supreme Court's 2010 directive to the Centre to
ensure free distribution of food grains to the hungry poor of the country instead of
allowing it to rot in the FCI godowns.
Blame game
With the government clearly unequipped to deal with the grim situation, states and
the Centre are now busy in a blame game while the grain is not made available to
those who need it - a starving population, BPL families or cattle.
A bumper crop in states like Punjab, Bihar and Madhya Pradesh has become a bane.
Deputy Chief Minister of Punjab says, "We can't do anything. It's the decision of the
government of India. It's been two years...we saw the crisis coming. The
government of India would be responsible for this crisis."
There may be still time to salvage the situation if the states and the central
government were to take corrective measures together.
The Union Food Minister has charged the Bihar government of not lifting additional
grain allotted to the state by the Centre. In Patna's Phulwarisharif, Headlines Today
cameras recorded an FCI godown complex overflowing with grain. Stored in the
open, the monsoon is raining havoc on the stock.
The state government has lashed out against New Delhi for not issuing any real
help. Food and Civil Supplies Minister says, "We need warehousing facilities to
store 12 lakh metric tonnes of grain, but the present capacity is only half of that.
There is no assistance to remove rotting grains either. We have written to Minister
for Food & Public Distribution K.V. Thomas and he promised to help us, but all that
was just lip service."
A lot of damage is already done and by the time the state government and the
central government decide on a plan of action, all may be lost.
'Distribute the food'
38
Agricultural sector is one of the most important components of the Indian economy.
An efficient agricultural marketing structure is essential for the development of the
agricultural sector. To benefit the farming community agriculture and agricultural
marketing system needs to be integrated and strengthened. Government of India has
initiated agricultural marketing reforms and has taken many steps for creation of
marketing infrastructure.
The National Agricultural Policy announced in July 2000 recognized the positive
role of forward and futures market in price discovery and price risk management,
especially in agricultural commodities. In pursuance thereof the Government
permitted 54 more commodities for futures trading.
A large majority of the farmers are marginal and small and cannot influence the
market individually and operate in a very disadvantageous buyer’s market. They
have usually little marketable surplus and also do not have holding capacity or
storage facilities with them. The farmer very often is compelled to go in for distress
sale because he has to pay back the credit availed, or to meet his obligations. This
situation is often exploited by traders and with the result farmers do not get the right
price for their produce.
39

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M/s.

MARUTINANDAN KISHAN BHANDAR

M/s. MARUTINANDAN KISHAN BHANDAR

JKM & ASSOCIATES

1 PROJECT REPORT ON : AGRICUTURE MARKETING INFRASTRUCTURE UNIT

2 NAME OF THE CONCERN : M/s. MARUTINANDAN KISHAN BHANDAR

10.2 TERM LOAN : 52.00

13 SALES ESTIMATION AT THE

AT SECOND YEAR 80% : 27.58

AT THIRD YEAR 80% : 30.34

14 CONSUMABLES AT 100 % : 0.31

17 BREAK EVEN POINT : 67%

18 IMPLEMENTATION PERIOD : NIL

to store it. Awareness of farmers on different components of market information and

Challenges faced by Agriculture Market

1. Improper Warehouses: There is an absence of proper ware housing facilities in

3. Inadequate Transport Facilities: Transport facilities are highly inadequate in

4. Presence of a Large Number of Middlemen: The chain of middlemen in the

5. Malpractices in Unregulated Markets: Even now the number of unregulated

6. Inadequate Market Information: It is often not possible for the farmers to

HOW WE CAN OVERCOME FROM THESE CHALLENGES

5. The number of intermediaries should be as small as possible, so that the

In order to avoid isolation of small-scale farmers from the benefits of agricultural

Agricultural marketing covers the services involved in moving an agricultural

Agricultural marketing can be defined as the commercial functions involved in

Agricultural marketing is a form of marketing that encompasses all goods and

As with most forms of marketing, agricultural marketing is focused on creating a

Warehousing storage infrastructure plays a very vital role in promoting agriculture

For commodity derivatives market to work efficiently, it is necessary to have a

Storage is one of the essential requirements of each agriculture produces like

M/s. MARUTINANDAN KISHAN BHANDAR at Village-DALPATPURA,

The warehousing capacity available in India, in public, cooperative and private

In 2000, a High Level Expert Committee set up by the government to consider

Accordingly, in 2001 the government launched Gramin Bhandaran Yojana for

Scientific storage leads to maintain quality of food grains.

In godowns, frequent spraying of insecticides and fumigation of food grains make

Remunerative price is realised for food grain, stored in Godowns leading to

The farmers can expect pledge loan of 70 % against stored produced.

If godown is run on commercial and professional lines by farmers Cooperative sales

The Government of India has introduced a negotiable warehouse receipt system in

After detailed deliberations, the Working Group made the following

(i) A comprehensive “Post-Harvest Management Scheme at farm level” should be

(viii) Warehousing sector should be given the status of full-fledged infrastructure so

(x) Setting up of Agricultural Economic Zones (AEZs) on the lines of Special

(xi) Warehouses may be declared as mandis by the State Governments.

(xii) The Government may encourage development of modern integrated storage

(xiii) The procedures for conversion of land use need to be simplified.

(xiv) Procurement of foodgrains through NWR may be taken up in a few districts in

(xix) A study through some professional organization for creation of Indemnity

(xx) Planning Commission may identify the Ministry/Department for formulating

(xxii) Study for the assessment of post-harvest losses in important agricultural

In future we also registered with WDRA-

THE WAREHOUSING (DEVELOPMENT AND REGULATION) ACT, 2007

An Act to make provisions for the development and regulation of warehouses,

In exercise of the powers conferred by sub-clause (n) of clause (2) of section 35 of

2. Qualitative specifications/standards for above commodities will be of Agmark.

3. For commodities requiring chemical or allied laboratory analysis, all Agmark

4. In addition, all Central/State Government laboratories and other laboratories

We confirm that we have constructed the warehouse godown to the as per