India Wastes Up to 30% of Annual Foodgrain Production Due to Poor Storage Facilities, Claims Study

April  09,  2014

The Associated Chambers of Commerce and Industry of India (ASSOCHAM) says in a report that around 20 - 30% of total foodgrain harvest in India is wasted annually due to poor storage facilities.

ASSOCHAM says that around 30-40% foodgrains is stored in an unprofessional manner during the peak marketing season in India. This along with other factors such as inadequate storage capacity, regional imbalance in warehouses, lack of adequate scientific storage and inefficient logistic management leads to wastage of around 20-30% of total foodgrain production in India.

According to ASSOCHAM, the market size of warehouse in India stood at over Rs. 22,800 crore (about $4.5 billion using historical exchange rates) in FY 2011 (April – March). The warehousing capacity for major foodgrains available in India, in public, co-operative and private sector is over 112 million tons. However, there is an extreme dearth of about 35 million tons of warehousing capacity and a massive foodgrain storage shortfall of about 8 million tons in the country to be filled by 2017. “India needs to recalibrate its strategy to mitigate the challenges of high food grain wastage due to lack of scientific storage facilities,” says ASSOCHAM.

ASSOCHAM also says that most warehouses in India have been built following the traditional norms and without proper specification but even some of the modern warehouses do not meet international standards.

Total foodgrain production in India stands at around 255 million tons which includes around 105 million tons of rice (milled basis). In 2012, the government claimed that the state foodgrains buying agency, the Food Corporation of India (FCI), has reduced wastage of foodgrains from 2.5% five years ago to 0.006% in 2012 despite the 150% growth in foodgrain stocks during the period. The Food Minister had called the reduction in wastage a major achievement of the FCI.

According to ASSOCHAM, about 70% of warehousing space in India is owned by government agencies.

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