India losing 30% grain output due to poor storage: study

About 40 per cent of India's grain output is stored in an "unprofessional" manner due to an acute shortage of storage capacity, which needs to be increased by 35 million tonnes, a study by the Associated Chambers of Commerce & Industry (Assocham) said on Wednesday.

Currently, 70 per cent of the total warehousing capacity of 112 million tonnes is owned by the government. An additional 35 million tonne of storage capacity is required in the current 12th Five Year Plan period (2012-17), it said.

"About 30-40 per cent of foodgrain is stored in an unprofessional manner during the peak marketing season in India," said a joint Assocham-Yes Bank study.

There is a dearth of grain storage capacity of about 35 million tonnes and there is an urgent need to augment modern and scientific storage facilities to keep pace with the marketable surplus, it said.

Due to inadequate storage capacity and inefficient logistics, Assocham general secretary D S Rawat said, "Around 20-30 per cent of the total grain harvest is wasted ... each grain bag is handled at least six times before it is finally opened for processing."

To build additional storage capacity, he emphasised the need to renovate existing warehouses and implement a robust Negotiable Warehouse Receipt (NWR) system.

The study also said that only 12 per cent of the total warehouse capacity accounts for agricultural commodities, while the maximum is industrial warehousing.

The warehousing market, which is growing at 9 per cent annually, is expected to cross the Rs 35,000 crore market in the 2015-16 financial year, the study said.

According to Assocham, warehousing is the backbone for developing trade and commerce and agro-processing industry, as it plays a very crucial role in strengthening agricultural supply chain, ensuring food security and price stabilisation.

Besides, it also solves the problem of glut and scarcity by maintaining uninterrupted supply of agricultural commodities in off season.