Rural Go Down Evaluation

EVALUATION OF
CENTRAL SECTOR SCHEME OF

CONSTRUCTION OF RURAL GODOWNS
Submitted to: Submitted by:
Department of Agriculture & Co-operation Global Agri System Pvt. Ltd.

Ministry of Agriculture, Government of India K-13A, Hauz Khas Enclave
Krishi Bhawan, New Delhi -110 016
New Delhi Tel.: 2652 7123/35 Fax: 2656 8510
E-mail: globalagri@vsnl.net
EVALUATION OF CENTRAL SECTOR SCHEME OF
CONSTRUCTION OF RURAL GODOWNS
JULY, 2006
Submitted to: Submitted by:
Department of Agriculture & Co-operation Global Agri System Pvt. Ltd.

Ministry of Agriculture, Government of India K-13A, Hauz Khas Enclave
Krishi Bhawan, New Delhi -110 016
New Delhi Tel.: 2652 7123/35 Fax: 2656 8510
E-mail: globalagri@vsnl.net
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY........................................................................................................................................1
2 INTRODUCTION .......................................................................................................................................................5
3 METHODOLOGY FOLLOWED TO MEET THE REQUIREMENTS OF THE ASSIGNMENT ....7
4 KEY FINDINGS FROM THE EVALUATION STUDY................................................................................13
4.1 DISTRIBUTION OF RURAL GODOWNS............................................................................................................... 13
4.1.1 Basis of Findings...........................................................................................................................................18
4.1.1.1 Selection of NABARD Assisted Godowns for the Evaluation Study .................................................... 18
4.1.1.2 Selection of NCDC Assisted Godowns for the Evaluation Study.......................................................... 19
4.2 EXTENT TO WHICH THE OBJECTIVES OF THE RURAL GODOWNS SCHEME WERE MET .............................. 20
4.3 PROFILE OF GODOWN OWNERS ........................................................................................................................ 27
4.4 EXTENT TO WHICH FARMERS HAVE BENEFITED FROM THE SCHEME .......................................................... 33
4.5 STATUS OF COMPLETION OF STORAGE PROJECTS AND THEIR OPERATIONAL STATUS ............................ 33
4.6 ROLE OF RURAL GODOWNS IN HELPING THE RURAL ECONOMY ................................................................. 36
4.7 EFFECTIVENESS OF THE TRAINING & AWARENESS PROGRAMMES CONDUCTED UNDER THE SCHEME.. 38
4.8 QUALITY OF CONSTRUCTION............................................................................................................................ 40
4.9 REGIONAL IMBALANCE IN THE CONSTRUCTION OF RURAL GODOWNS........................................................ 43
4.10 W EAK M ANAGEMENT INFORMATION SYSTEMS............................................................................................. 44
4.11 ROLE OF NGOS ................................................................................................................................................... 45
4.12 TRENDS IN INDIAN A GRICULTURE .................................................................................................................... 45
5 SUGGESTIONS & RECOMMENDATIONS....................................................................................................52
5.1 EXPANSION OF THE SCHEME BEYOND 2006-2007 ......................................................................................... 52
5.2 IMPROVED MIS ................................................................................................................................................... 53
5.3 EXPANDING THE SCOPE FOR TRAINING & AWARENESS ............................................................................... 54
5.3.1 Involving NGOs in Awareness Creation and Training...........................................................................55
5.3.2 Suggested Training Modules.......................................................................................................................56
5.3.3 Training Institutions:....................................................................................................................................56
5.3.4 Awareness creation.......................................................................................................................................57
5.3.5 Meetings with Local Community Leaders / Ongoing Initiatives...........................................................57
Evaluation of Central Sector Scheme of i Global AgriSystem Private Limited

Construction of Rural Godowns Your Partner in Agri-business
LIST OF TABLES :
TABLE 1 FIELD SURVEY SCHEDULE..................................................................................................................................... 11

TABLE 2 STATEMENT SHOWING PROGRESS OF RURAL GODOWN SCHEME ................................................................... 15
TABLE 3 DISTRIBUTION OF RURAL GODOWNS ACROSS THE COUNTRY ......................................................................... 17
TABLE 4 CAPACITY WISE DISTRIBUTION OF NABARD A SSISTED RURAL GODOWNS IN THE 15 TATES THAT
COMPRISE 99% OF THE TOTAL STORAGE CAPACITIES CREATED IN THE COUNTRY THROUGH THE RURAL
GODOWNS SCHEME ...................................................................................................................................................... 18
TABLE 5 CAPACITY W ISE DISTRIBUTION OF THE SAMPLES OF GODOWNS SELECTED FOR THE STUDY.................... 19
TABLE 6 CAPACITY W ISE DISTRIBUTION OF THE SAMPLES OF GODOWNS SELECTED FOR THE ST UDY.................... 20
TABLE 7 EXTENT TO WHICH THE RURAL GODOWNS SCHEME HAS MET ITS OBJECTIVES............................................ 22
TABLE 8 REASONS BEHIND THE RURAL GODOWNS SCHEME BEING UNABLE TO MEET SOME OF THE OBJECTIVES OF
THE SCHEME .................................................................................................................................................................. 26
TABLE 9 COMMODITY WISE UTILIZATION OF STORAGE SPACE CREATED THROUGH THE RURAL GODOWNS SCHEME
......................................................................................................................................................................................... 34
TABLE 10 PRICE RISE ............................................................................................................................................................. 36
TABLE 11 W ASTAGE LEVEL.................................................................................................................................................. 37
TABLE 12 EMPLOYMENT GENERATED ................................................................................................................................ 38
LIST OF FIGURES :
FIGURE 1 STATE WISE DISTRIBUTION OF STORAGE CAPACITY......................................................................................... 14

FIGURE 2 STATE WISE DISTRIBUTION OF GODOWNS POPULATION................................................................................... 14
FIGURE 3 OCCUPATION OF THE GODOWN OWNERS .......................................................................................................... 29
FIGURE 4 EDUCATION PROFILE OF GODOWN OWNERS .................................................................................................... 30
FIGURE 5 CASTE PROFILE OF GODOWN OWNERS.............................................................................................................. 31
FIGURE 6 EXTENT OF LAND HOLDING OF THE GODOWN OWNERS................................................................................. 32
FIGURE 7 FOODGRAIN PRODUCTION (M ILLION TONS)...................................................................................................... 45
FIGURE 8 COTTON / OILSEED / SPICES PRODUCTION ........................................................................................................ 46
FIGURE 9 STORAGE GAP (CAGR)........................................................................................................................................ 48
Evaluation of Central Sector Scheme of ii Global AgriSystem Private Limited

1 EXECUTIVE SUMMARY
Gramin Bhandaran Yojana scheme was launched by Department of Agriculture & Co-
operation in 2001 with multi fold objectives. The scheme has till 31st March 2005 sanctioned
9483 projects with capacity of 14.18 MMT of which more than 80% of godowns are
operational.
Department of Agriculture & Co-operation commissioned Global AgriSystem Private

Limited to evaluate the Gramin Bhandaran Yojana scheme. The findings of the study
conducted through primary interviews of 970 godown owners across 15 states clearly shows
that the scheme has been successful in fulfilling its multiple objectives of creating scientific
storage infrastructure for the various stakeholders, developing farmers storages, creating
employment and economic value and bringing in private investment to the agricultural
sector.
Sanctioned projects include new projects in the private, government and co-operative
sectors and renovation of co-operative sector projects. New projects account for 8061 (85%)
& 12.26 MMT (86%) of capacity, renovated projects NCDC account for 1422 (15%) and 1.92
MMT (14%) of capacity. NABARD’s share of new projects is 7107 (88%) with capacity of
11.36 MMT (93%) while NCDC’s share of new projects is 954 (12%) with capacity of 0.90
MMT (7%).
REGIONAL DISTRIBUTION OF GODOWNS :

Region Share of projects Major states
North 44.0 % Punjab
South 16.4 % Karnataka
West 16.4 % Maharashtra
East 11.0 % Chhatisgarh, West Bengal
Central 09.7 % Madhya Pradesh
North East < 1.0 % Assam, Meghalaya
Union Territories 0.02 %
15 states, namely, Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, Gujarat,

Rajasthan, Madhya Pradesh, Chhatisgarh, Orissa, Bihar, West Bengal, Assam, Punjab,
Haryana & Uttar Pradesh account for almost 99% of the total storage sanctioned while 7
states of Punjab, Andhra Pradesh, Haryana, Madhya Pradesh, Maharashtra, Uttar Pradesh
and Chhatisgarh account for 73% of godowns and 88% of capacity. District wise
concentration of godowns seen for e.g. Nadia in West Bengal, Ferozepur & Bhatinda in
Punjab, Rajkot in Gujarat, Hoshangabad in Madhya Pradesh, Akola in Maharashtra, Ganjam
in Orissa
Evaluation of Central Sector Scheme of 1 Global AgriSystem Private Limited

Major Findings
§ Scheme usage has been driven by a combination of the awareness programs

conducted by NIAM & DMI, local canvassing by state offices and as well as by banks
selling loans.
§ The Scheme has been successful particularly in the development of small and medium
godowns, 76% (<1000 MT), 13% (1000 ~ 5000 MT) and 11% (>5000 MT) in the
NABARD assisted scheme
§ Godown construction quality across NABARD and NCDC assisted godowns meets
standards laid down on major quality parameters
§ 95% of godowns are used to store agricultural output, only 5% store both input
and output
§ Commodities stored are mainly local produce, While the major commodity stored is
rice, wheat and pulses, variations to this are being seen in other states for commercial
commodities such as spices (Andhra Pradesh, Madhya Pradesh, Karnataka, Rajasthan)
soy (Madhya Pradesh), cotton (Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh)
and groundnut (Gujarat, Tamil Nadu, Andhra Pradesh) and for Non Timber Forest
Produce reported from Chattisgarh and Madhya Pradesh
§ Godown owners are predominantly farmers (70%) followed by traders, business
houses and other categories.
§ Owners include high school and college graduates belonging to the general caste
and own land between 1 ~ 10 acres (majority)
§ Godown owners have benefited from the scheme through reducing post harvest losses,
increasing income through higher price realization of a reported 5 ~ 15 % and enabling
both savings and investment capability. Godown owners report employment creation as
per godown sizes
Achievements
While principal objectives of Gramin Bhandaran Yojana Scheme have been met like
creation of scientific storage capacity, prevention of distress sale, reduction of loss in
quantity and quality, creation of additional employment opportunities in rural areas,
assistance in the easy procurement of food grains by FCI and other agencies, renovation
and upgradation of existing storage capacity created by co-operatives with the assistance
of NCDC, encouraging private and co-operative sector investment in the creation of
storage infrastructure in the major producing zones and the major consumption zones in the
country and reduction in pressure on existing storage facilities with public agencies

and co-operatives and reduction in pressure on the transport system in the post-
harvest period.
Objectives which have not been met like, promotion of grading, standardization and
quality control of agricultural produce to improve their marketability which are being
addressed through separate schemes, timely availability of fertilizers, pesticides,
inputs, consumer articles, etc. to farmers which is being done through separate trade
channels, providing the facility of pledge loan and marketing credit which are not
availed by farmers due to procedural issues as well lack of knowledge and introduction of
a national system of warehouse receipts in respect of agricultural commodities stored in
such godowns which are issued by MCX & NCDEX in the godowns hired and organized by
them
Based on the findings of the field survey, secondary data and detailed interaction with DMI,
NABARD, NCDC, stakeholders, and beneficiaries, consultants have made the following
suggestions.
Suggestions
§ Scheme continuation has to be considered in view of 100 MMT storage gap based on
production and storage estimates. Scheme potential can be estimated for foodgrain and
conventional crops as well as for other crops and in states where the scheme limit is
available using a local approach
§ Scheme may incorporate provision for modern storage technology alternatives such as
silos, whether large scale or farm / co-operative scale since the first large scale project
for foodgrain is being implemented and will be operational for FCI usage. Scheme may
consider review of cost of construction of godowns given the rise in the costs as well as
for region based considerations for commodity specific storage
§ Scheme may incorporate scope for enabling Warehouse Receipt System for godowns to
upgrade to NCDEX / MCX godown standards based on standards of construction,
infrastructure, equipment and utility specified
§ Scheme may consider training through NIAM for godown operation, quality management
and warehouse maintenance, crop specific storage practices, grading, standardization
and value addition as well as business practices apart from the proposed WRS and silo
storage technology. Godown owners and operators will stand to benefit if NIAM is
enabled to offer training and awareness programs on a country wide basis, to gain
efficiency in current operations as well as have the capability to upgrade to WRS / silo
based systems
§ Scheme related training may be implemented by NIAM through a de-centralized Master
Training Approach using state specific resources, specialist training and R&D
organizations as well as the national commodities exchanges
§ Scheme has developed a valuable resource base of small, medium and large farmers
alongwith co-operatives, state enterprise and private enterprise spread across the
country which can be developed for future schemes and for piloting any projects in the
agricultural sector
§ DAC may consider incorporating a data compliance condition with implementing
agencies for enabling a robust MIS

2 INTRODUCTION
The Central Sector Scheme for Construction of Rural Godowns was launched by the
Department of Agriculture and Co-operation (DoAC) in the year 2001. The objectives that
the scheme sought to meet were:
§ Creation of a scientific storage capacity to meet the various requirements of farmers for
storing farm produce, processed farm produce, consumer articles, agricultural produce,
etc.
§ Promotion of grading, standardization and quality control of agricultural produce to
improve their marketability.
§ Timely availability of fertilizers, pesticides, inputs, consumer articles, etc. to farmers.
§ Prevention of distress sale of food grains and other agricultural produce, immediately
after harvest by providing the facility of pledge loan and marketing credit.
§ Reduction of loss of quantity and quality arising at present from storage in sub-standard
godowns
§ Reduction in the pressure on existing storage facilities with public agencies, co-
operatives, etc., particularly during the post harvest period of peak demand.
§ Reduction in the pressure on the transport system in the post-harvest period.
§ Creation of additional employment opportunities in rural areas.
§ Assistance in the easy procurement of food grains by FCI and other agencies.
§ Renovation and upgradation of existing storage capacity created by Co-operatives with
the assistance of NCDC.
§ To strengthen the agricultural marketing infrastructure of the country by paving the way
for the introduction of a national system of warehouse receipts in respect of agricultural
commodities stored in such godowns; and
§ To reverse the declining trend of investment in the agriculture sector by encouraging
private and co-operative sector investment in the creation of storage infrastructure in the
country.
In July 2005, the DoAC awarded M/s Global AgriSystem Pvt. Ltd. (hereafter referred to as
‘the Consultants’) the contract to evaluate the performance of the Scheme on various
parameters. As per the Terms of Reference (ToR) for the assignment, the Consultants were
specifically required:
§ To assess the utility of the scheme in terms of its objectives.

§ Profile the entrepreneurs who have availed the benefit for construction of rural godowns
(i.e. Farmers, Traders, Co-operatives, Corporations, NGOs, etc.)
§ To understand the extent to which farmers, especially small farmers, have benefited
from the Scheme in terms of (a) Construction of own godowns, (b) Utilization of the
Storage Space, (c) Reduction of wastages, (d) Accessing credit, and (e) Realizing
remunerative prices for their produce.
§ To assess the status of completion of storage projects, their operational status -- (a)
Capacity wise and commodity wise break up, (b) Utilization/Occupancy Pattern, (c)
Storage Charges, etc. -- and economic performance
§ To help understand the extent to which the operation of these godowns have helped the
rural economy by way of investment, rural employment and rural marketing.
§ To assess the effectiveness of training and awareness programs conducted for the
bankers, entrepreneurs and farmers through the National Institute of Agricultural
Marketing (NIAM), Jaipur
§ To assess the quality of construction of the godowns with specific reference to the
general conditions laid down in the operational guidelines for the scheme of scientific
construction; and
§ To gauge the reasons for the regional imbalance in the construction of godowns under
the scheme and suggestions for improvements in the scheme with reference to its
objectives.
This report, the Report for the assignment contains the analysis of the findings from the
study and recommendations for improvements in the scheme.
The remaining part of the report is structured as follows:
Section 2 : Describes the methodology followed by the Consultants to meet the

requirements of the Study, the sampling plan, etc.
Section 3 : Contains the Summary of key findings from the Study and the analysis of the
findings
Section 4 : Contains the key suggestions and recommendations for the improvement of
the Scheme

3 METHODOLOGY FOLLOWED TO MEET THE REQUIREMENTS OF THE
ASSIGNMENT
To meet the requirements of the assignment, the consultants undertook the following tasks
as their methodological approach.
Task 1 : Briefing Meeting of the Team Members with DMI Officials in Faridabad and
NCDC Officials in New Delhi
On being awarded the contract, the members from the consulting team met the concerned
officials at DMI in Faridabad. The purpose of the meeting was :
§ To introduce the members of the consulting team to the DMI representatives,

§ Discuss the proposed methodological approach with the DMI officials and seek their
inputs for the same
§ Discuss the secondary data requirements from DMI
§ Outline a field work schedule, and
§ Seek any other assistance from the DMI officials in Faridabad and other states
At the time when the contract was awarded to the consultants, it was understood that the
assignment involved evaluating a statistically representative sample from 5,325 projects
sanctioned upto FY 2003-04 across 24 States and one Union Territory of the country. These
projects were broken down into 4,399 NABARD assisted construction of new rural godowns,
926 NCDC assisted construction of new godowns and 1,120 NCDC assisted renovation of
existing godowns.
In the briefing meeting however, DMI requested the consultants to evaluate a statistically
representative sample of the godowns sanctioned upto FY 2004-2005. The sample frames
of the numbers of godowns to be thus evaluated went up from 5,325 to 9,483. The breakup
of this universe was: 7,107 NABARD assisted new godowns, 954 NCDC assisted new
godowns and 1,422 NCDC assisted renovation of old godowns. The consultants agreed to
do the needful.
A meeting with similar objectives was also held with representatives from NCDC in New
Delhi.

Task 2 : Collection & Analysis of Secondary Information
Immediately after meeting the DMI and NCDC representatives, the consultants began the
task of collecting secondary information on the scheme. The sources from which information
was collected included – DMI, NCDC; NABARD; FCI; DoAC;. The nature of information
sought to be collected included:
§ State wise distribution of godowns across the country (in terms of numbers of godowns
per state, size of the godowns, year-wise and capacity-wise no. of godowns sanctioned,
etc)
§ Guidelines related to the construction of godowns
§ Nos. of godowns hired by FCI and other agencies from FY 2001-2002 to FY 2004 –
2005, etc.
The nature of information collected above would have enabled the consultants to develop a
robust fieldwork schedule and meet one of the key requirements of the assignment –
namely, to have statistically relevant samples chosen for the purpose of the field study.
It must however be mentioned that the information sought from DMI was not immediately
available with NABARD and NCDC. The consultants were asked to co-ordinate with the
NABARD Office in Mumbai and its Headquarters in Mumbai and NCDC (in Delhi) to collect
this information. However, on making visits to the NABARD offices in Mumbai and Pune, the
consultants were informed that the information would only be available with the Regional
Offices of NABARD and that the consultants would have to visit these offices, should they
want the information to be made available to them. The NCDC office on the other hand
informed the consultants that the kind of information needed was not available with their
office. Hence, the consultants would need to visit each State, get in touch with the NCDC
representatives in the State headquarters and select the godowns for the purpose of the
evaluation survey on the basis of data available with state offices.
This feedback was passed on to DMI and DMI assured the consultants that they would
provide as much assistance as could be possible to procure the data. Thereafter, the
required information received from NCDC, NABARD and DMI state offices was supplied to
the consultants. However, the information supplied was not in any standardized formats and
each of the states that supplied the information did so on different formats. Moreover, some
of the information was supplied in hard copies while some other states provided soft copies.

Task 3 : Developing Questionnaire Formats for Recording Primary Information from
the Field Surveys
On getting part of the information from the states, the Consultants began developing
questionnaire schedules for collecting primary information from the field surveys.
The first drafts of these questionnaire schedules were then taken to the DMI office in
Faridabad where the consultants sought inputs and suggestions from the DMI officials on
the questionnaire schedules.
The suggestions provided by DMI on the questionnaire schedules were incorporated and a
second draft of the schedules was prepared.
Task 4 : Developing the Sampling Plan and the Associated Fieldwork Schedules
Whilst preparing the questionnaire schedules, the consultants also started work on
developing the sampling plan and the fieldwork methodologies. For preparing the sample
plan, the consultants depended wholly on the secondary information collected from DMI.
The following steps were followed in the stratification process:
§ A complete table of Rural Godowns was collected from the DMI with cut off date as 31st
March 2005 i.e. all the godowns approved till 31.03.2005 were considered.
§ Thereafter the Consultants segmented the godowns into three broad areas for the
purpose of the study. These three segments were:
- NABARD assisted new godowns
- NCDC assisted renovated godowns
- NCDC assisted new godowns
§ After this stratification, the NABARD and NCDC assisted godowns were further
segregated on the basis of their total capacities (for e.g. Small (less than 1000 MT),
Medium (between 1000 to 5000 MT) and Large (more than 5000 MT) capacities
§ The total sample size was proportionately divided into these six segments as per their
weight (total no of godowns funded).
§ Once this is done the three broad segments (i.e. NABARD assisted new godowns,
NCDC assisted renovated godowns and NCDC assisted new godowns) were treated
separately for further sampling. However the base was kept constant for each segment.
§ The sample for each segment was distributed again to various states on the basis of the
proportionate weight of each state. For e.g. If 25% of the total Godowns assisted by
NABARD were located in Punjab then 25% representation was given to Punjab in total
sample of NABARD assisted godowns, and so on.
§ Thereafter, the sampling was done using Area sampling and random sampling
techniques.
§ Total no of godowns in each district of a state was plotted on the map of the particular
state and various high-density clusters were identified.
§ The entire district falling under this cluster was taken for further sampling. Again the
sample was distributed within these districts on the basis of proportionate weight. Once
the samples for each district were decided, the respondents were thereafter selected on
the purely random basis.
Task 4 : Meeting with DoAC Officials in Krishi Bhavan, New Delhi
The second draft of the questionnaire schedules, the sampling plan, fieldwork methodology
and the tentative fieldwork schedule was discussed with DoAC officials. The consultants
also mentioned the problems in collecting secondary data and the consequent delays in
launching the fieldwork. DoAC then instructed the DMI to provide the required secondary
information to the consultants at the earliest and requested the consultants to test the
questionnaires before administering them on a large scale in the field.
Task 5 : Pilot Testing the Questionnaire Schedules in Punjab
After the meeting with DoAC and DMI officials, the consultants attempted to pilot test the
second draft of the questionnaires and the fieldwork methodology in a couple of randomly
selected districts in Punjab. The pilot testing was done on the 26th and 27th of July, 2005. A
preliminary report on the experience of the consultants during the piloting exercise was
prepared and submitted to DoAC and DMI on the 29th of July 2005. This report is included
in Annex II of this report.
On the basis of the preliminary report, DoAC once again instructed DMI to provide the
consultants with the required information and field support. DMI agreed to do so and once
again assured the consultants that all necessary assistance would be provided.
The questionnaire schedules were also refined based on the piloting of the questionnaires
and the same were submitted to DMI and DoAC for their approval. Similarly, the fieldwork
methodology and the sample sizes were also fine-tuned (basis the available secondary
data), finalized and shared with both DMI and DoAC. The final sample plan based on which
the fieldwork for the assignment was carried out and the final questionnaires for primary
data collection are provided in Annex III and Annex IV respectively of this report.

Task 6 : Constituting the Field Work Teams and Briefing Meeting with Field
Supervisors and Field Investigators
On acceptance of the final questionnaires and the sample plan, the field teams were
gathered in Delhi and a briefing meeting was held for the field research team on the 29th of
September 2005. Officials from DMI and NCDC provided the field teams with a broad
overview of the Central Sector Scheme for Construction/Renovation of Rural Godowns and
briefed the field teams on the objectives of the assignment. Thereafter wide ranging
discussions were held to respond to the queries raised by the field research team, the team
was briefed on the tasks that they would need to carry out during the primary information
gathering exercise and other critical field support related issues were discussed and agreed
upon.
Task 7 : Primary Data Collection Exercise
After the briefing meeting, the fieldwork for the assignment commenced. During the
fieldwork, face-to-face interviews were held with godown owners/ representatives of the
godown owners and farmers in the vicinity of the godowns. The field teams also physically
inspected the godowns. The responses provided by the respondents and the observations
of the field investigation teams were recorded in the questionnaires.
The actual fieldwork schedule is contained in Table 1 below:
Table 1 Field Survey Schedule

REGION / STATE Field Survey Start Date Field Survey End
Date
NORTH
Punjab 3/10/05 2/12/05
Haryana 24/10/05 15/11/05
Uttar Pradesh 17/10/05 28/11/05
Chattisgarh 02/11/05 14/11/05
Rajasthan 24/10/05 15/11/05
CENTRAL
Madhya Pradesh 3/10/05 21/11/05
SOUTH
Karnataka 18/10/05 21/11/05
Andhra Pradesh 24/10/05 24/11/05
Tamil Nadu 2/12/05 15/12/05
EAST
West Bengal 24/10/05 25/11/05
Orissa 24/10/05 10/11/05
Assam 1/11/05 20/11/05
Bihar 29/11/05 2/12/05
WEST
Maharashtra 3/10/05 15/11/05
Gujarat 24/10/05 24/11/05

It must be noted that on account of festivals like Durga Puja and Diwali, and Acts of God like
heavy rainfall and floods in many places, the fieldwork in many states got delayed. The
reasons behind these delays and the alternate remedial plans were discussed and agreed
upon with DMI. During the course of the fieldwork, DMI officials from both its respective
regional offices as well as the DMI head office in Faridabad provided the field research
teams with the required/requested assistance. For this, the consultants are grateful to DMI.
Task 8 : Data Entry, Analysis of Primary and Secondary Data and Report Writing
The information gathered from the field was entered into computers and analyzed using the
statistical software application package, SPSS, and other quantitative and qualitative
analytical tools and techniques. Thereafter, the task of report writing began. This document
and its annexes are the outcome of the exercise.

4 KEY FINDINGS FROM THE EVALUATION STUDY
4.1 Distribution of Rural Godowns
As on 31.03.2005, the state-wise distribution of Rural Godowns created by DMI is given in

Table 2 1.
It can be seen from Table 2 that 15 states, namely:
§ Andhra Pradesh
§ Karnataka
§ Tamil Nadu
§ Maharashtra
§ Gujarat
§ Rajasthan
§ Madhya Pradesh
§ Chhatisgarh
§ Orissa
§ Bihar
§ West Bengal
§ Assam
§ Punjab
§ Haryana; and
§ Uttar Pradesh
account for almost 99% of the total storage facilities created by DMI in the country (both in
terms of numbers as well as storage capacities created). Graphic charts follow on the state
wise distribution of godowns and storage capacity created.
1
Source: DMI
Assam, 0.52% Rajasthan, 0.41%
Tamil Nadu, 0.68% Bihar, 0.12% Capacity Distribution
Others, 0.54%
West Bengal, 1.34%
Punjab, 24.67% Punjab

Andhra Pradesh
Orissa, 1.87% Uttar Pradesh
Haryana
Maharashtra
Gujarat, 2.06%
Madhya Pradesh
Chhatisgarh
Karnataka, 4.43%
Karnataka
Gujarat
Chhatisgarh, 5.44% Orissa
West Bengal
Tamil Nadu
Assam
Rajasthan
Bihar
Others
Madhya Pradesh, 9.37%
Andhra Pradesh,
17.07%
Maharashtra, 9.47%
Uttar Pradesh, 12.00%
Figure 1 State wise distribution of storage capacity
Assam, 0.56% Tamil Nadu, 0.51%

Orissa, 0.90%
Others, 1.55%
Rajasthan, 1.34%
Punjab
Bihar, 1.69% Madhya Pradesh
Punjab, 31.79% Maharashtra
Chhatisgarh, 2.21%
Uttar Pradesh
Haryana, 3.45% Karnataka

Andhra Pradesh
West Bengal
Gujarat, 5.57%
Gujarat
Haryana
Chhatisgarh
West Bengal, 6.92% Bihar
Rajasthan
Orissa
Assam
Andhra Pradesh, 7.13% Tamil Nadu
Others
Madhya Pradesh, 9.66%

Karnataka, 8.36%
Maharashtra, 9.49% Godowns Population

Uttar Pradesh, 8.88%
Figure 2 State wise distribution of godowns population

Table 2 Statement Showing Progress of Rural Godown Scheme
(Position as on 31/03/2005)
Sanctioned by Sanctioned by NCDC Total new construction Sanctioned by NCDC Total
NABARD (New) (Renovation)
1 2 3 4 5 (3+4) 6 (5+6)
S. State No. of Capacity in No. of Capacity in No. of Capacity in No. of Capacity in No. of Capacity in
No projects tonnes projects tonnes projects tonnes projects tonnes projects tonnes
1 Andhra Pradesh 569 2412187 56 4300 625 2416487 51 4750 676 2421237
2 Assam 52 72781 1 650 53 73431 0 0 53 73431
3 Bihar 1 1000 157 16150 158 17150 2 500 160 17650
4 Chhatisgarh 137 415214 73 357000 210 772214 0 0 210 772214
5 Gujarat 516 248026 12 44300 528 292326 0 0 528 292326
6 Haryana 158 1178585 66 10500 224 1189085 103 230817 327 1419902
7 Himachal Pradesh 0 0 31 3600 31 3600 0 0 31 3600
8 Jammu & Kashmir 1 100 1 1950 2 2050 0 0 2 2050
9 Karnataka 751 612898 41 14825 792 627723 1 100 793 627823
10 Kerala 8 4917 27 8950 35 13867 8 1570 43 15437
11 Madhya Pradesh 631 1163833 165 93050 796 1256883 120 72616 916 1329499
12 Maharashtra 742 924651 29 157500 771 1082151 129 261300 900 1343451
13 Meghalaya 1 7983 34 3450 35 11433 3 300 38 11733
14 Nagaland 1 4000 0 0 1 4000 0 0 1 4000
15 Orissa 85 264820 0 0 85 264820 0 0 85 264820
16 Punjab 2788 3110302 14 1790 2802 3112092 213 386350 3015 3498442
17 Rajasthan 18 50998 27 3000 45 53998 82 4700 127 58698
18 Tamil Nadu 25 83397 21 12000 46 95397 2 600 48 95997
19 Uttar Pradesh 64 602827 85 143600 149 746427 693 955468 842 1701895
20 Uttaranchal 9 23762 21 13950 30 37712 0 0 30 37712
21 West Bengal 550 179215 91 9100 641 188315 15 1500 656 189815
22 U Ts 0 0 2 1400 2 1400 0 0 2 1400
Total 7107 11361496 954 901065 8061 12262561 1422 1920571 9483 14183132

The state wise contribution to the total storage facilities created is given in Table 3. As can
be seen from Table 3, approximately 7 states account for the largest share of the total
numbers and capacities of storage facilities created across the country. These states are:
§ Punjab (31.79% of the numbers and 24.67% of the total storage facilities created)
§ Andhra Pradesh (7.31% of the numbers and 17.07% of the total storage facilities
created)
§ Haryana (3.45% of the numbers and 10.01% of the total storage facilities created)
§ Madhya Pradesh (9.66% of the numbers and 9.37% of the total storage facilities
created)
§ Maharashtra (9.49% of the numbers and 9.47% of the total storage facilities created)
§ Uttar Pradesh (8.88% of the numbers and 12% of the total storage facilities created);
and
§ Chhatisgarh (2.21% of the numbers and 5.44% of the total storage facilities created)
Interestingly, 3 states account for a larger share of the numbers of godowns created and not
so much for their share in the total capacities created. These states are:
§ Karnataka (8.36% of the numbers and 4.43% of the total storage facilities created)
§ West Bengal (6.92% of the numbers and 1.34% of the total storage facilities created)
§ Gujarat (5.57% of the numbers and 2.06% of the total storage facilities created)

Table 3 Distribution of Rural Godowns across the Country
Sanctioned by NABARD Sanctioned by NCDC Total New Godowns Sanctioned by NCDC Total No. of Rural
(New) (Renovation) Godowns
1 2 3 4 5 (=3+4) 6 7 (=5+6)
S. No State % of Total % of Total % of Total % of Total % of Total % of Total % of Total % of Total % of Total % of Total
No. of Capacity No. of Capacity No. of Capacity No. of Capacity No. of Capacity
Projects Created Projects Created Projects Created Projects Created Projects Created
1 Andhra Pradesh 8.01 21.23 5.87 0.48 7.75 19.71 3.59 0.25 7.13 17.07
2 Assam 0.73 0.64 0.10 0.07 0.66 0.60 0.00 0.00 0.56 0.52
3 Bihar 0.01 0.01 16.46 1.79 1.96 0.14 0.14 0.03 1.69 0.12
4 Chhatisgarh 1.93 3.65 7.65 39.62 2.61 6.30 0.00 0.00 2.21 5.44
5 Gujarat 7.26 2.18 1.26 4.92 6.55 2.38 0.00 0.00 5.57 2.06
6 Haryana 2.22 10.37 6.92 1.17 2.78 9.70 7.24 12.02 3.45 10.01
7 Himachal Pradesh 0.00 0.00 3.25 0.40 0.38 0.03 0.00 0.00 0.33 0.03
8 Jammu & Kashmir 0.01 0.00 0.10 0.22 0.02 0.02 0.00 0.00 0.02 0.01
9 Karnataka 10.57 5.39 4.30 1.65 9.83 5.12 0.07 0.01 8.36 4.43
10 Kerala 0.11 0.04 2.83 0.99 0.43 0.11 0.56 0.08 0.45 0.11
11 Madhya Pradesh 8.88 10.24 17.30 10.33 9.87 10.25 8.44 3.78 9.66 9.37
12 Maharashtra 10.44 8.14 3.04 17.48 9.56 8.82 9.07 13.61 9.49 9.47
13 Meghalaya 0.01 0.07 3.56 0.38 0.43 0.09 0.21 0.02 0.40 0.08
14 Nagaland 0.01 0.04 0.00 0.00 0.01 0.03 0.00 0.00 0.01 0.03
15 Orissa 1.20 2.33 0.00 0.00 1.05 2.16 0.00 0.00 0.90 1.87
16 Punjab 39.23 27.38 1.47 0.20 34.76 25.38 14.98 20.12 31.79 24.67
17 Rajasthan 0.25 0.45 2.83 0.33 0.56 0.44 5.77 0.24 1.34 0.41
18 Tamil Nadu 0.35 0.73 2.20 1.33 0.57 0.78 0.14 0.03 0.51 0.68
19 Uttar Pradesh 0.90 5.31 8.91 15.94 1.85 6.09 48.73 49.75 8.88 12.00
20 Uttaranchal 0.13 0.21 2.20 1.55 0.37 0.31 0.00 0.00 0.32 0.27
21 West Bengal 7.74 1.58 9.54 1.01 7.95 1.54 1.05 0.08 6.92 1.34
22 U Ts 0.00 0.00 0.21 0.16 0.02 0.01 0.00 0.00 0.02 0.01

The distribution of godowns as shown in Table 4 indicates the size wise distribution of
godowns across the various states; that in some states there is a dominance of large sized
godowns whereas in others a dominance of small and medium scale godowns. The table
further depicts the dominance of total share of space created and by sector i.e., in the
private and co-operative sectors.
The capacity wise distribution of NABARD assisted rural godowns2 in the 15 states that
account for 99% of the storage capacities created under the rural godowns scheme is given
in Table 4 below:
Table 4 Capacity wise Distribution of NABARD Assisted Rural Godowns in the 15 tates that
comprise 99% of the Total Storage Capacities Created in the Country through the Rural
Godowns Scheme
State 5000MT and % 1000 to % Less than % Total

above 4999MT 1000MT
Andhra Pradesh 371 58 210 33 58 9 639
Assam 3 6 17 33 31 61 51
Chattisgarh 26 25 66 62 14 13 106
Gujarat 9 2 22 4 468 94 499
Haryana 90 57 27 17 42 26 159
Karnataka 34 5 44 7 587 88 665
Maharashtra 47 7 98 14 561 79 706
MP 74 8 372 41 470 51 916
Orissa 13 12 56 53 37 35 106
Punjab 166 6 25 1 2640 93 2831
Rajasthan 4 27 3 20 8 53 15
Tamil Nadu 9 20 21 47 15 33 45
Uttar Pradesh 30 42 34 47 8 11 72
West Bengal 4 1 27 4 703 96 734
Table 4 accentuates the differences between the capacity wise distributions of rural
godowns in the country.
4.1.1 Basis of Findings
The findings presented in the report are based on samples of NABARD and NCDC assisted
rural godowns that have been constructed in the country. Sections 3.1.1.1 and 3.1.1.2 of this
report highlights the basis of the findings.
4.1.1.1 Selection of NABARD Assisted Godowns for the Evaluation Study
For the evaluation study, all the 15 states that account for 99% of the total distribution of
NABARD assisted godowns were selected. From these 15 states, a process of stratified
random sampling was followed and approximately 10% of the godowns total number of
godowns in these states was selected. The final numbers of godowns selected for the study
2
Source: DMI
were proportionately distributed across the total population of the godowns in these states
as per the capacity wise variations. The final capacity wise distribution of the numbers of
godowns selected across the states is presented in Table 5 below:
Table 5 Capacity Wise Distribution of the Samples of Godowns Selected for the Study
States Total No. Sample Sample Distribution of the Sample Size across Capacities
of of Size as a Less than 1000MT 1000 to 5000 MT More than 5000 MT
NABARD Godowns %age of No. of No. of No. of No. of No. of No. of
Assisted Selected Total No. Godowns Godowns Godowns Godowns Godowns Godowns
Rural of Rural Selected Selected Selected Selected Selected Selected
Godowns Godowns as a % of as a % of as a % of
Total Total Total
Sample Sample Sample
Size Size Size
Punjab 2831 266 7.5 221 83.1 25 9.4 20 7.5
Haryana 159 31 19.5 13 41.9 3 9.7 15 48.4
Chattisgarh 106 29 27.4 3 10.3 20 69 6 20.7
West Bengal 734 59 8.0 55 93.2 4 6.8 0 0
Gujarat 499 50 10.0 46 92 2 4 2 4
Assam 51 15 29.4 10 66.7 3 20 2 13.3
Andhra 639 59 9.2 12 20.3 16 27.1 31 52.5
Pradesh
Karnataka 665 68 10.2 58 85.3 8 11.8 2 2.9
Maharashtra 706 73 10.3 59 80.8 9 12.3 5 6.8
Uttar Pradesh 72 14 19.4 1 7.1 8 57.1 5 35.7
Orissa 106 15 14.2 5 33.3 7 46.7 3 20
Rajasthan 15 5 33.3 0 0 4 80 1 20
Madhya 631 66 10.46 15 22.7 42 63.6 9 13.6
Pradesh
* Of the godowns selected in Punjab, there were 15 instances where loans had been taken and the godowns
were not constructed and neither were the amounts taken repaid and 2 instances where the amount taken as
the loan was refunded back to the banks.
4.1.1.2 Selection of NCDC Assisted Godowns for the Evaluation Study
For the NCDC Assisted godowns, the capacity wise distribution of godowns in the 15 States
could not be provided by DMI and NCDC. As such, the consultants were asked to reach the
respective State Capitals and choose the respective samples of NCDC godowns in
consultation with the local DMI and NCDC officials. The consultants followed this advice and
the final list of godowns selected is provided in Table 6 below:

Table 6 Capacity Wise Distribution of the Samples of Godowns Selected for the Study
States Total No. Sample Sample Distribution of the Sample Size across Capacities
of NCDC of Size as a Less than 1000MT 1000 to 5000 MT More than 5000 MT
Assisted Godowns %age of No. of No. of No. of No. of No. of No. of
Rural Selected Total No. Godowns Godowns Godowns Godowns Godowns Godowns
Godowns of Rural Selected Selected Selected Selected Selected Selecte d
Godowns as a % of as a % of as a % of
Total Total Total
Sample Sample Sample
Size Size Size
Punjab 227 18 7.93 1 5.55 8 44.44 9 50
Haryana 80· 21 26.25 5 23.81 5 23.81 11 52.38
Chattisgarh 73 8 10.95 -- -- 7 87.5 1 12.5
West Bengal 106 10 9.43 10 100 -- -- -- --
Gujarat 12 3 25 2 66.67 1 33.33 -- --
Bihar 159 16 10.06 16 100 -- -- -- --
Andhra 107 16 14.93 16 100 -- -- -- --
Pradesh
Karnataka 42 4 8.51 4 100 -- -- -- --
Maharashtra 158 8 5.06 1 12.5 6 75 1 12.5
Uttar Pradesh 778 53 6.81 10 18.87 33 62.26 10 18.87
Rajasthan 109 32 29.35 32 100 -- -- -- --
Madhya 285 27 9.47 11 40.74 15 55.55 1 3.7
Pradesh
Tamil Nadu 23 4 17.39 3 75 1 25 -- --
As can be seen from Table 5 and 6, the total numbers of godowns selected for the
evaluation study were representative of the total distribution of godowns in the 15 states that
account for almost 99% of the total storage capacities created through the rural godown
scheme.
4.2 Extent to which the Objectives of the Rural Godowns Scheme were met
As mentioned in Section 1 of this report, the various objectives with which the rural godown
scheme was initiated were:
Obj (i) : Creation of a scientific storage capacity to meet the various requirements of
farmers for storing farm produce, processed farm produce, consumer articles,
agricultural produce, etc.
Obj (ii) : Prevention of distress sale of food grains and other agricultural produce,
immediately after harvest by providing the facility of pledge loan and marketing
credit.
Obj (iii) : Reduction of loss of quantity and quality arising at present from storage in sub-
standard godowns
Obj (iv) : Reduction in the pressure on existing storage facilities with public agencies, co-
operatives, etc., particularly during the post harvest period of peak demand
Obj (v) : To strengthen the agricultural marketing infrastructure of the country by paving
the way for the introduction of a national system of warehouse receipts in respect
of agricultural commodities stored in such godowns;
Obj (vi) : To reverse the declining trend of investment in the agriculture sector by
encouraging private and co-operative sector investment in the creation of storage
infrastructure in the country
Obj (vii) Renovation and upgradation of existing storage capacity created by Co-
operatives with the assistance of NCDC.
Obj (viii) Creation of additional employment opportunities in rural areas.
Obj (ix) Promotion of grading, standardization and quality control of agricultural produce
to improve their marketability.
.Obj (x) Timely availability of fertilizers, pesticides, inputs, consumer articles, etc. to
farmers.
Obj (xi) Reduction in the pressure on the transport system in the post- harvest period.
and
Obj (xii) Assistance in the easy procurement of food grains by FCI and other agencies
One of the key requirements of the evaluation study was to assess the extent to which the
objectives of the scheme have been met.
From the detailed field survey, it was found that the scheme had been successful in meeting
several of its objectives. At the same time however, the scheme hasn’t been able to meet all
its objectives. The extent to which the scheme has been able to meet its objectives is
depicted in Table 7.

Table 7 Extent to which the Rural Godowns Scheme has met its Objectives
States Objectives of the Rural Godowns Scheme
Obj (i) Obj (ii) Obj (iiii) Obj (iv) Obj (v) Obj (vi) Obj (vii) Obj (viii) Obj (ix) Obj (x) Obj (xi) Obj (xii)
Punjab 3 2 3 2 1 3 2 2 1 1 2 3
Haryana 3 2 2 2 1 2 2 2 1 1 2 2
Uttar Pradesh 3 2 2 2 1 2 2 2 1 1 2 2
Madhya Pradesh 3 3 3 3 3 3 3 2 2 1 2 3
Chhatisgarh 3 2 2 2 1 2 2 2 1 1 2 2
West Bengal 3 2 2 3 1 2 2 2 1 1 2 2
Orissa 2 2 2 2 1 1 2 2 1 1 3 3
Bihar 2 1 2 2 2 1 3 2 1 1 2 3
Assam 3 2 2 2 1 2 1 2 1 1 2 2
Rajasthan 3 1 1 2 1 2 1 1 1 3 2 2
Gujarat 3 2 1 2 1 2 1 2 1 1 2 2
Maharashtra 3 2 2 2 2 3 3 2 1 1 2 2
Andhra Pradesh 3 ** 2 3 2 3 3 2 3 2 2 3
Karnataka 3 2 2 2 1 2 2 2 2 1 2 2
Tamil Nadu 3 2 3 2 3 2 1 2 1 1 2 3
Note: In Table 7, 3 different scores have been assigned to depict the extent to which the objectives of the scheme have been met. These
scores were not assigned by the respondents, but were derived from the analysis of the responses provided to the various questions asked
to different categories of respondents (Please refer to Annex 4 for detailed questionnaires that were administered to the different
respondents). The principle of assigning the scores is as follows – A score of 3 was assigned to a particular objective when the detailed
analysis of the responses revealed that a majority of the respondents (i.e. more than 75% of the respondents) felt that the construction of the
godown had largely helped (i.e. between 75 and 100%) in meeting a particular objective. Similarly, a score of ‘2’ was assigned when the
detailed analysis of the responses revealed that a majority of the respondents felt that the construction of the godown had helped to some
extent (i.e. between 25 and 75%) in meeting a particular objective; and a score of ‘1’ was assigned when the detailed analysis of the
responses revealed that a majority of the respondents felt that the construction of the godown had not helped at all/helped, but to a very
limited extent (i.e. less than 25%) in meeting a particular objective of the scheme. For details, please refer to Annex 5 of this report

From Table 7, it can be seen that some states have been able to meet the objectives of the
Scheme more than the others. It can also be seen that in most of the states, some of the
key objectives of the scheme have largely been met. These are:
§ Creation of scientific storage capacity

§ Prevention of distress sale
§ Reduction of loss in quantity and quality
§ Creation of additional employment opportunities in rural areas
§ Assistance in the easy procurement of food grains by FCI and other agencies
§ Renovation and upgradation of existing storage capacity created by Co-operatives with
the assistance of NCDC; and
§ Encouraging Private and Co-operative Sector investment in the creation of storage
infrastructure in the major producing zones and the major consumption zones in the
country
Similarly, the scheme has been able to meet, albeit to a limited extent, 2 of its other
objectives. These are:
§ Reduction in pressure on existing storage facilities with public agencies and co-
operatives
§ Reduction in pressure on the transport system in the post-harvest period
However, 4 sub-objectives of the scheme have largely remained unmet. These are:
§ Promotion of grading, standardization and quality control of agricultural produce to

improve their marketability
§ Timely availability of fertilizers, pesticides, inputs, consumer articles, etc. to farmers
§ Providing the facility of pledge loan and marketing credit.
§ Introduction of a national system of warehouse receipts in respect of agricultural
commodities stored in such godowns.

A brief objective explanation of the schemes objectives is detailed below:
States Creation of a scientific Prevention of distress sale Reduction of loss of quantity
storage capacity and quality
Punjab 3 2 3
Haryana 3 2 2
Uttar Pradesh 3 2 2
Madhya 3 3 3
Pradesh
Chhatisgarh 3 2 2
West Bengal 3 2 2
Orissa 2 2 2
Bihar 2 1 2
Assam 3 2 2
Rajasthan 3 1 1
Gujarat 3 2 1
Maharashtra 3 2 2
Andhra Pradesh 3 ** 2
Karnataka 3 2 2
Tamil Nadu 3 2 3
Creation of a § Scientific storage capacity of 14.19 million metric tons has been created
scientific § The scheme has succeeded in creating 8061 new godowns with space of 12.26 million
storage metric tons across the major states
capa city § 1422 godowns in the co-operative sector with a capacity of 1.92 million metric tons have
been renovated to modern scientific standards
§ Quality of construction of both new godowns and renovated godowns meets the major
criteria defined for construction
§ A wide spectrum of godowns in terms of ownership and capacity has been built, albeit
concentrated in 15 states with 99% of capacity
§ Farmers, traders, co-operatives, marketing federations, private sector players are the broad
ownership spectrum with capacities ranging from 100 metric tons to over 10000 metric tons
Prevention of § Farmers godowns and the godown space available to farmers allows for a uniform price
distress sale increase of 5 ~ 15% depending on state and commodity
§ Godowns are being offered for dedicated long term use in many states for public
procurement w hich allows farmers to deliver commodities within their operating zones
§ However, farmers have not availed of pledge loans facility with a uniform plea that the
banking procedures are cumbersome
§ At the same time, the majority of godown owners (0ver 98%) do not offer the facility of
warehouse receipts and pledge loans
§ Tradable Warehouse Receipts System is yet to spread to mainstream agriculture and this
will require upgradation of godowns and allied facilities as well as accreditation
Reduction of § Overall respondents claim less than 5% wastage due to the godowns
loss of quantity § The increase in price realization reflects the quality preservation aspect of the scientific
and quality storage created
States Reduction in the Introduction of a national Encouraging private and co-

pressure on existing system of warehouse operative sector investment
storage receipts
Punjab 2 1 3
Haryana 2 1 2
Uttar Pradesh 2 1 2
Madhya 3 1 3
Pradesh
Chhatisgarh 2 1 2
West Bengal 3 1 2
Orissa 2 1 1
Bihar 2 1 1
Assam 2 1 2
Rajasthan 2 1 2
Gujarat 2 1 2
Maharashtra 2 1 3
Andhra Pradesh 3 1 3
Karnataka 2 1 2

States Reduction in the Introduction of a national Encouraging private and co-
pressure on existing system of warehouse operative sector investment
storage receipts
Tamil Nadu 2 1 2
Reduction in § The addition of 14.18 million metric tons in the major production states contributes to lesser
the pressure on load
existing storage § The created capacity adds to existing public and private storage space
Introduction of § Less than 1% of owners and operators issue receipts to users, however, these receipts are
a national merely storage receipts and not marketable instruments
system of § Sample godowns are not accredited by the National Commodity Exchanges [NCDEX &
warehouse MCX] warehousing partners
receipts § Warehouse Receipt Systems will provide a single solution for output purchase, pledge
finance, marketing, storage and commodity handling as well as allowing for post harvest
operations and commodity treatment systems under a single roof
§ It is understood that the warehousing partners for MCX and NCDEX have already contracted
godowns built by SWC and CWC in select locations
Encouraging § 7107 godowns with a space of 11.36 million metric tons have been created by and for use of
private and co- the private sector
operative sector § In the co-operative sector, 954 godowns with space of 0.90 million metric tons have been
investment created
§ 1422 godowns in the co-operative sector with a capacity of 1.92 million metric tons have
been renovated
§ Private investment leads with 80% of space created and 75% of projects
§ Co- operative sector chips in with 20% of space and 25% of projects
States Renovation and Creation of additional Promotion of grading,

upgradation of existing employment standardization and quality
storage capacity NCDC control
Punjab 2 2 1
Haryana 2 2 1
Uttar Pradesh 2 2 1
Madhya 3 2 2
Pradesh
Chhatisgarh 2 2 1
West Bengal 2 2 1
Orissa 2 2 1
Bihar 3 2 1
Assam 1 2 1
Rajasthan 1 1 1
Gujarat 1 2 1
Maharashtra 3 2 1
Karnataka 2 2 2
Tamil Nadu 1 2 1
Renovation and § 1422 godowns in the co-operative sector with a capacity of 1.92 million metric tons have
upgradation of been renovated to modern scientific standards
existing storage § Godowns renovated meet over 95% of the quality needed under scheme thereby providing
capacity NCDC for quality scientific storage space
Creation of § Upto 5 employees per small godowns, 10 employees per medium godowns and 20+
additional employees per large godowns are claimed by respondents as being used for permanent and
employment causal employment under this scheme
§ However, particularly, for the large number of godowns set up by small farmers, the
employment seems to be derived from using family members as employees and only peak
time casual labour during season
§ The building of new godowns and renovation of existing NCDC assisted godowns has
provided a fillip to the construction industry in and about the facility
Promotion of § Bulk of produce is still sold to traders and govt. agencies through market yards where
grading, grading, standardization and quality control at trader / buyer level points are available
standardization § Lack of knowledge of post harvest operations & established comfort levels with common
and quality practices
control § This aspect is being covered through Ministry of Agriculture’s schemes for Development /
Strengthening Of Agricultural Marketing Infrastructure, Grading And Standardization

States Timely availability of Reduction in the pressure on Easy procurement of food
Inputs the transport system grains
Punjab 1 2 3
Haryana 1 2 2
Uttar Pradesh 1 2 2
Madhya 1 2 3
Pradesh
Chhatisgarh 1 2 2
West Bengal 1 2 2
Orissa 1 3 3
Bihar 1 2 3
Assam 1 2 2
Rajasthan 3 2 2
Gujarat 1 2 2
Maharashtra 1 2 2
Karnataka 1 2 2
Tamil Nadu 1 2 3
Timely § Very limited success since owners focus on activity relating to storage of food grains, cash
availability of crops for their own crops, trading and for public procurement
Inputs § Inputs particularly crop chemicals and fertilizers pose the chance of cross contamination
§ Inputs supplies are organized through their own marketing channels of distributors, stockists
and retailers
Reduction in § The addition of 14.18 million metric tons in the major production states contributes to lesser
the pressure on load on trucking and rail transport
the transport § Area specific storage in production belts has been created which augments existing storage
system space
Easy § Farmers without their own godowns still have access to godowns where FCI and its state
procurement of agencies and other agencies are procuring commodities
food grains
The main reasons behind the scheme being unable to meet the 4 objectives mentioned
above are given in Table 8 below:
Table 8 Reasons behind the Rural Godowns Scheme being unable to meet some of the
Objectives of the Scheme
Unmet Objectives of the Reasons behind the Scheme not being able to meet the objectives
Scheme
Promotion of grading, § Bulk of produce is still sold to traders and govt. agencies through
standardization and quality market yards where grading, standardization and quality control at
control of agricultural produce trader / buyer level points are available
to improve their marketability § Lack of knowledge of post harvest operations & established comfort
levels with common practices
§ This aspect is being covered through Ministry of Agriculture’s
schemes for Development / Strengthening Of Agricultural Marketing
Infrastructure, Grading And Standardization
Timely availability of fertilizers, § Godowns are used primarily for storage of agricultural outputs and not
pesticides, inputs, consumer fertilizers as can be correlated with the operations, occupation and
articles, etc. to farmers activity of the owners
§ Fertilizers, agricultural inputs and consumer articles are easily
available at local markets through respective trade channels .
Therefore the farmers do not feel the need to use the storage facilities
to store these products
§ Using storage facilities to store fertilizers along with wheat, rice/paddy
etc. leaves a bad odor in the output produce making it difficult to sell
later
Providing the facility of pledge § Lack of awareness about the existence of these facilities
loan and marketing credit § Amongst those farmers who were aware, a majority did not feel the

Unmet Objectives of the Reasons behind the Scheme not being able to meet the objectives
Scheme
need to avail of either pledge loans or marketing credit facilities
§ Those that did were discouraged by the rude behaviour of the bank
officials, the officials’ reluctance to assist in providing pledge
loans/marketing credit and the cumbersome procedures involved in
availing these facilities
§ Availability of local credit through godown owners and traders
Introduction of a national § Current system of Warehouse Receipt System is only used by MCX &
system of warehouse receipts NCDEX accredited storages for the commodities traded on these
[WRS] in respect of agricultural exchanges, it is also known that these exchanges are utilizing various
commodities stored in such godowns constructed by private entities as well as CWC / SWC
godowns owned ones
§ Other Godowns are used for private storage by farmers, millers,
traders as well as by state agencies / co-operatives and there is a
general lack of awareness about warehouse receipts
§ Both NCDEX & MCX have specifications and equipment / utility levels
beyond the current status of the godowns . Godown accreditation and
compatibility are yet to be built to NCDEX / MCX levels
§ Small farmers who store their produce in others’ godowns have an
established trust-based relationship with the godown owners and do
not demand receipts for storing their produce in the godowns. These
godown owners also provide credit assistance to the farmers and help
them in many other intangible ways. Most of the godown owners who
came under this category were local traders, small business owners,
transporters, etc. with whom the farmers have a complex and dynamic
relationship which makes it difficult for the farmers to demand receipts
for storing their produce.
4.3 Profile of Godown Owners
The owners of the godowns that were financed through NABARD were profile against four
different parameters:
§ Their primary occupation

§ Their educational background
§ Their category status; and
§ The extent of their landholding
The results from the profiling exercise are presented in Figure 1, 2, 3 and 4 respectively.
As can be seen from Figure 1, in most states, primarily individuals whose primary
occupation is either Farming or Trading have availed of the scheme. Even amongst these
two categories, farmers seem to have availed of the scheme more than traders, with the
only exceptions being in Orissa, Assam and Rajasthan, where traders seem to have
benefited more from the scheme than farmers. However, in states like Andhra Pradesh and
Maharashtra, several private limited companies, partnership firms, the State Government
owned agencies; Co-operative Societies and Marketing Boards seem to have also availed of
the scheme through NABARD. Such bodies have also availed of the scheme in other states,
but not as much as in Andhra Pradesh and Maharashtra.

From this it can be inferred that in the States where the farmers’ earnings from agriculture is
relatively limited, and therefore so is their ability to invest, traders and other business men
have moved in to set up storage facilities. Similarly in States where the economic profile of
farmers is relatively better off, mostly medium and big farmers have made investments in
creating storage facilities. However, even in these states where the medium and large
farmers have created their own storage facilities, there appears to be a need for additional
storage in the rural areas, and various service providers like traders, transporters, persons
engaged in the retail trade, etc. have filled in this gap by making the required investments.
Moreover, from the discussions held with DMI and NABARD officials, it was found that in the
initial years when the scheme was launched, big traders from Punjab and Andhra Pradesh
were the first set of entrepreneurs who availed of the scheme more than farmers. The
reason behind this was that just before the launch of the scheme; FCI had announced that it
wanted to augment their storage capacities by hiring space from private entrepreneurs on a
long-term basis. As a result, those traders and businessmen who came to know of both
FCI’s announcement and also about the launch of the rural godowns scheme, availed of the
scheme and constructed the godowns. These godowns were largely the medium and large
capacity godowns. These godowns were then leased out to FCI resulting in the
entrepreneurs earning a risk free income for the period of the lease.
Only in the last 3 years or so have the small farmers have been availing of the scheme more
than other entrepreneurs. This indicates that farmers have begun to realize the intrinsic
value of having their own storage facilities and are willing to take the risk of constructing
these facilities by availing of the benefits provided by the scheme. This is a positive
development and needs to be encouraged further.

Figure 3 Occupation of the Godown Owners
100
90
80
70
60
50
40
30
20
10
UP
MP
b
at
a
na
al
a
ka
nja
iss
tha
l
ad
h
jur
htr
ga
er
sa
ar
rya
es
ata
Ov
Gu
Pu
Or
iln
en
as
isg
As
jas
ad
Ha
rn
m
tB
ar
att
Ra
Pr
Ka
Ta
ah
es
Ch
ra
W
M
dh
An
Farming Trading and distributing Retail Service Others

Figure 4 Education Profile of Godown Owners
100%
80%
60%
40%
20%
0%
UP
MP
b
all
att a
at
an
Ma taka
h
nja
tra
l
n
iss
ga
h
dh Assa
er
ar
jur
rya
th
es
Or
sh
isg
Ov
Pu
en
Gu
jas
ad
Ha
ra
rn
tB
Pr
Ra
ha
Ka
es
Ch
ra
W
An
Upto 10th Upto 12th Graduate Professional No Response
The education profile of the godown owners (as shown in Figure 2) reveals that mostly
individuals who are educated below the 10th Standard, or those who have graduate level
qualifications have constructed more godowns in the country, than those who are educated
up to the 12th Standard or those who have post graduate or professional qualifications. This
distribution implies that the scheme has attracted people who either have a very basic level
of education, or those who have higher qualifications. Further classifications revealed that
the godown owners who were educated only upto the 10th Standard were primarily farmers
whereas godown owners with graduate degree and higher degrees were either Traders or
are engaged in other businesses. The farmers typically own small sized godowns (i.e.
godowns that have capacities up to 1000 MT or less) whereas the godowns owned by the
traders are either Mid Sized Godowns (between 1000 and 5000 MT capacities) or Large
Sized Godowns (over 5000 MT capacity).

Figure 5 Caste Profile of Godown Owners
100%
80%
60%
40%
20%
0%
UP
MP
Ha b
Ch yana
Pr m
at
Ra sa
tB h
l
n
tra
nja
Ka h
era
l
Ma atak
ga
W sgar
jur
tha
es
is
dh Ass
sh
Or
Pu
en
Ov
ad
Gu
r
jas
ra
rn
ti
at
ha
es
ra
An
SC ST General No Response
Again, as can be seen from Figure 3, more than 90% of the godown owners across the
country belong to the ‘General’ Caste category. While individuals from the ‘Scheduled
Caste’ and ‘Scheduled Tribes’ categories have also availed of the scheme in many states;
the composition of individuals from these communities have been negligible. This is indeed
a surprising finding given the fact that the guideline of scheme has extra subsidy assistance
earmarked for individuals belonging to the SC and ST communities.

Figure 6 Extent of Land Holding of the Godown Owners
90.00
80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
UP
MP
m
b
l
a
era
at
na
u
nja
tra
n
iss
arh
tak
sa
jar
ad
l
tha
ga
rya
es
sh
Ov
Or
Pu
As
Gu
isg
rna
il N
en
jas
Ha
ad
ara
att
tB
Ra
Ka
m
Pr
ah
Ch
Ta
es
ra
M
W
dh
An
Between 1 and 10 Acres Between 11 and 20 Acres Between 21 and 40 Acres More than 40 Acres No Response
From Figure 6 it can be seen that a majority of entrepreneurs who have availed of the rural godowns scheme (and who responded to the
enquiries on their landholding size) are small landowners (having holdings between 1 and 10 acres of land).

4.4 Extent to which Farmers have benefited from the Scheme
With reference to the State Reports given in Annex 5, it can be seen that most of the rural
godowns in the country have been done constructed by individual entrepreneurs on their
own lands. As is seen from the field research findings, the primary occupation of godown
owners is farming, trade and other business occupations apart form the co-operative and
state owned godowns. The overall view of beneficiaries is positive, that the godowns have
helped them store their produce that was prone to losses in the past. To that extent, the
entrepreneurs appear to be extremely satisfied with the role that the godowns have had to
play in reducing the extent of physical losses of their agricultural produce and they can
withhold the produce to sell at remunerative prices later on. Over the period of time that the
farmers have been storing their produce in the godowns, they feel that they have been
realizing better prices for the goods stocked in the godowns.
In most states, the farmers haven’t yet begun to access credit from banks and other formal
institutional sources against goods stored in the godowns. While the lack of awareness
about such credit facilities was a major factor for the slow progress in meeting this objective,
the reluctance of bank officials in extending such credit to the farmers and the cumbersome
procedures involved in accessing such credit facilities were other impediments towards the
realization of this objective of the scheme.
4.5 Status of Completion of Storage Projects and their Operational Status
More than 80% of the godowns in the Country have been constructed and are operational.
The remaining are either under construction or are partially constructed but operational.
The field survey also revealed that more than 95% of the godowns constructed under the
rural godowns scheme are used to store agricultural outputs only. Less than 5% of the
godowns constructed under the scheme are used to store both agricultural inputs as well as
output produce. It was also found that the godowns that are completely constructed and
operational typically see occupancy rates that are generally above 75% of their total storage
capacities. Some partially completed godowns are also being used for storage purposes.
These godowns typically witness occupancy rates that range between 25 to 50% of the total
sanctioned storage capacities.
The commodity wise utilization of storage space created through the godowns is presented
in Table 9 below:

Table 9 Commodity wise utilization of storage space created through the rural godowns scheme
States < 1000 MT 1000 ~ 4999 MT > 5000 MT

< 10% 10 ~ 25 ~ 50% 50 ~ 75% 75 ~ < 10% 10 ~ 25% 25 ~ 50% 50 ~ 75 ~ < 10% 10 ~ 25 ~ 50% 50 ~ 75 ~ 100%
25% 100% 75% 100% 25% 75%
Punjab Rice/paddy Wheat Rice/paddy, Turi Wheat Wheat
, cotton, cotton,
pulses, pulses,
vegetables vegetables
Haryana Rice/paddy Turi, Wheat Rice/paddy, Turi, Wheat Rice/ Turi, Wheat
, mustard sugarca mustard sugarcane paddy, sugarca
seeds ne seeds mustard ne
seeds
Uttar Sugarcane Rice/paddy Wheat Sugarcane Rice/paddy Wheat Sugar Rice/paddy Wheat
Pradesh cane
Madhya Rice/paddy Soybean Wheat Rice/paddy Soybean, Wheat Soybea Wheat
Pradesh , coriander, , Pulses Pulses n,
onions, Pulses
gram
Chhatis Wheat, Rice/ Wheat, Rice/pad Rice/paddy
garh Pulses, paddy Pulses, dy
Tendu Tendu
Patta Patta
West Maize, Jute Rice/ Maize, Jute Rice/pa Jute Rice/
Bengal onions, paddy onions, ddy paddy
wheat wheat
Orissa Cotton Rice/ Cotton Rice/pad Cotton Rice/paddy
paddy dy
Assam Spices, Rice/ Spices, Rice/pad Spices, Rice/paddy
pulses paddy pulses dy pulses
Rajasth Mustard Mustard Fertilizers Mustard
an Seeds Seeds , Seeds

States < 1000 MT 1000 ~ 4999 MT > 5000 MT
< 10% 10 ~ 25 ~ 50% 50 ~ 75% 75 ~ < 10% 10 ~ 25% 25 ~ 50% 50 ~ 75 ~ < 10% 10 ~ 25 ~ 50% 50 ~ 75 ~ 100%
25% 100% 75% 100% 25% 75%
pesticides
, etc.
Gujarat Wheat, Spices Cotton Wheat, Spices Cotton Wheat, Spices Cotton
Tendu Tendu Groundnu
Patta, Patta, t, Garlic
Groundnut, Groundnut,
Garlic Garlic
Maharas Rice/paddy Wheat, Rice/paddy, Wheat, Rice/pad Wheat,
htra , spices Cotton spices, Cotton, dy, Cotton,
groundnut, Soybea spices, Soybean
pulses n groundnu
t, pulses
Andhra Pulses, Rice/ Pulses, Rice/pad Pulses, Rice/paddy
Pradesh groundnut, paddy groundnut, dy groundnu
fodder, fodder, t, fodder,
husk, etc. husk, etc. husk, etc.
Karnata Spices, Rice/ Spices, Rice/pad Spices, Rice/paddy
ka pulses, paddy pulses, dy pulses,
areca nut areca nut areca nut
Tamil Wheat, Sugar, Wheat, Sugar, Wheat, Sugar,
Nadu rice, mustard rice, mustard rice, mustard
groundn seeds, groundnut seeds, groundnut seeds,
ut cotton cotton cotton
Thus usage is determined by the local production profile of the area. This data clearly brings out the fact that storage has been created to
meet the local storage needs and to that extent the storage facilities that have been created are helping the farmers of the area in realizing
remunerative marketing of their produce.

4.6 Role of Rural Godowns in helping the Rural Economy
The Rural Godowns Scheme seems to have encouraged farmers, especially the small
farmers in creating storage capacities for their produce, which was otherwise sold at low
prices immediately after the harvest season. Most of the respondents mentioned that they
are able to enjoy between 5 to 15% increase in prices for their produce by holding the same
to avoid distress sale after harvest and due to the fact that scientific storage permitted
quality preservation which helped them fetch both better realization on the saleable volumes
and the prices received.
State wise averaged price rise is depicted the chart below.
Table 10 Price Rise
States % Increase in Prices States % Increase in Prices

Punjab Upto 10% UP 10%
Haryana Upto 10% Karnataka 10%
Chattisgarh 5 ~ 8% Maharashtra 10%
West Bengal 10% Andhra Pradesh 5%
Gujarat 10% Orissa 5%
Assam 5% Rajasthan 5%
MP 5 ~ 8% Tamil Nadu 10%
The enhanced income has not only helped in marginally raising the standard of living of the
farmers but also seems to have enabled the farmers to augment their household asset
base, pay off debts, acquire more livestock, other consumer goods and/or build their savings
base. The creation of rural godowns has also helped generate additional employment
opportunities for the rural poor.
Reduction in Wastage
The setting up of the godowns has helped farmers and owners reduce wastage to a very
large extent across all states. The overwhelming majority of respondents claim wastage
levels at below 5% across all scales of godowns and across all states. Within this category
as well, there is a large body of owners and farmers who claim 1 ~ 2% wastage levels due
to the access to scientific storage levels. The findings of the survey have been encapsulated
in Table 11 below.
This clearly depicts the high level of satisfaction that owners and users experience due to
the creation of the facilities. Apart from the users claimed reduction in post harvest losses,
the creation of the godowns add to the marketable surplus hitherto in terms of the product
volumes preserved. The reduction is wastage also adds to the owners incomes.

Table 11 Wastage Level
States < 1000 MT 1000 - 4999 MT > 5000 MT

Waste Level < 5% 5 ~ 10% > 10% < 5% 5 ~ 10% > 10% < 5% 5 ~ 10% > 10%
% of respondents % of respondents % of respondents
Punjab 55.9 38.0 6.1 50.0 50.0 0.0 50.0 50.0 0.0
Haryana 76.5 17.6 5.9 60.0 40.0 0.0 37.5 60.0 2.5
Chattisgarh 77.3 22.7 0.0 100.0 0.0 0.0 100.0 0.0 0.0
West Bengal 69.2 23.1 7.7 0.0 0.0 0.0 0.0 0.0 0.0
Gujarat 81.0 16.7 2.4 100.0 0.0 0.0 100.0 0.0 0.0
Assam 100.0 0.0 0.0 100.0 0.0 100.0 0.0 0.0
Andhra Pradesh 100.0 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0
Karnataka 96.5 3.5 0.0 100.0 0.0 0.0 0.0 0.0 0.0
Maharashtra 93.7 4.8 1.6 100.0 0.0 0.0 0.0 100.0 0.0
UP 33.3 66.7 0.0 100.0 0.0 0.0 25.0 75.0 0.0
Orissa 100.0 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0
Rajasthan 100.0 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0
MP 89.3 1.8 8.9 90.0 10.0 0.0 89.0 11.0 0.0
Tamil Nadu 100.0 0.0 0.0 100.0 0.0 0.0 100.0 0.0 0.0

Respondents claim employment generated across the spectrum size of the godowns. While
state wise employment figures vary on account of the godown profile and business model
used, it can be said that a small godown (76%) generates 5 jobs, a medium scale godown
(13%) generates 5 ~ 10 jobs while a large scale godown (11%) generates 10 ~ 20 jobs.
Assuming a conservative estimate of 5 jobs per small godown, 8 jobs per medium godown
and 15 jobs per large godown and using the size distribution data available on NABARD
assisted godowns, employment estimates are,
Size Godown Population Estimated Jobs Per Godown Employment Created
Small 5401 5 27007
Medium 924 8 7391
Large 782 15 11727
Total 7107 46124
* as per NABARD godown size distribution
A summary of employment findings is depicted below in Table 12.
Table 12 Employment Generated
States < 1000 MT 1000 ~ 4999 MT > 5000 MT

No. of 1~5 6 ~ 10 11 ~ 20 > 20 1~5 6 ~ 10 11 ~ 20 > 20 1~5 6 ~ 10 11 ~ 20 > 20
Persons
% of respondents % of respondents % of respondents
Punjab 51.2 33.0 13.4 2.5 33.3 33.3 0.0 33.3 0.0 0.0 50.0 50.0
Haryana 75.0 16.7 8.3 0.0 20.0 40.0 20.0 20.0 16.7 16.7 33.3 33.3
Chattisgarh 59.1 18.2 18.2 4.5 0.0 40.0 50.0 10.0 0.0 0.0 100.0 0.0
West 46.2 31.9 13.4 8.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Bengal
Gujarat 63.4 26.8 7.3 2.4 100.0 0.0 0.0 0.0 0.0 0.0 0.0 100.0
Assam 100.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0
Andhra 9.8 68.6 11.8 9.8 20.0 40.0 37.0 3.0 0.0 0.0 29.0 71.0
Pradesh
Karnataka 67.2 25.0 1.6 6.3 30.0 35.0 31.5 3.5 0.0 0.0 63.0 37.0
Maharashtra 82.0 11.5 4.9 1.6 33.3 41.7 20.8 4.2 0.0 0.0 0.0 100.0
UP 22.2 55.6 11.1 11.1 0.0 0.0 100.0 0.0 0.0 0.0 0.0 100.0
Orissa 90.0 10.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 100.0 0.0 0.0
Rajasthan 100.0 0.0 0.0 0.0 100.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
MP 30.4 33.2 32.1 4.3 0.0 66.7 33.3 0.0 75.0 0.0 0.0 25.0
Tamil Nadu 43.2 25.3 23.1 8.3 0.0 33.3 66.7 0.0 0.0 100.0 0.0 0.0
4.7 Effectiveness of the Training & Awareness Programmes conducted under the
Scheme
NIAM has developed a comprehensive stakeholder based training and awareness program.
From the data made available by NIAM it is evident that while work done so far has been
pioneering and has contributed both to the reach and implementation of the scheme via the
stakeholders, both awareness and training need to be conducted on an intensive basis
across the states on a state crop approach and to be implemented using a state
participatory strategy.
NIAM has conducted programs, training and awareness sessions for all the stakeholders
envisaged under the scheme ranging from DMI and State Department officials, banking and
co-operative sectors as well as farmers and entrepreneurs. The results of NIAM’s work done
are depicted below.
A majority of entrepreneurs across the country who have constructed their godowns through
the rural godowns scheme came to know about the scheme through the respective branch
offices of the financing banks. This too was enabled because most of the entrepreneurs
have had past professional associations with the respective banks and are known to the
local bank officials.
Awareness about the scheme was also generated through friends and relatives of the
entrepreneurs who got to know about the scheme from their contacts in the local banks, DMI
or other government departments.
The third most prominent mode of awareness creation seemed to be newspaper

advertisements about the scheme.
These three modes of publicity / awareness creation have driven interest amongst the local
entrepreneurs to demand the scheme from the government. As such, the scheme seems to
be heavily supply driven rather than demand oriented and depends primarily on the interest
and ability of bank officials in ‘selling’ the scheme to persons known to them.
According to the detailed field survey, while a low proportion of the godown owners and
farmers claimed that they had received any training under the rural godowns scheme, the
respondents claimed that the training provided to them was ‘very useful’ and ‘relevant’ to
their needs.
However, majority of respondents claimed that they had not received any training under the
scheme and were unaware as to whether there was a provision for them to receive any
training under the scheme. Most of those who had received training could not recall the
name of the organization or agency that had provided them with the training.
At this point, it needs to be said that only a limited number of farmers and entrepreneurs
training programs have been conducted in limited states across the country in tandem with
state and other organizations. This perhaps is the reason that the respondents have low or
nil recall of the training organization.

On a futuristic note, consultants suggest that NIAM may incorporate the emerging trend of
national commodities markets, MCX & NCDEX, as captive users of godowns space as
modern warehouses. NIAM may therefore, consider, incorporating modules in training as a
vital component of Quality & Skills Development for godowns wishing to migrate to the
national network as well as for inculcating modern warehousing practices. Details of NIAM’s
training and awareness programs are available as Annexure 6.
4.8 Quality of Construction
By and large, the godowns that have been constructed under the rural godowns programme
through NABARD’s assistance have, on an average, met between 75 ~ 90 % of the different
quality of construction criteria laid down in the operational guidelines for the scheme. On the
other hand, the NCDC assisted godowns (built mostly by Co-operative Societies,
Government Corporations and Marketing Boards) that are built across the country met more
than 95 % of the different quality of construction criteria laid down in the operational
guidelines for the scheme.
For most of the NABARD assisted godowns across all the States, especially the small and
medium capacity godowns, of the 11 parameters specified under quality of construction
specifications, the parameters that have mostly been compromised on are:
§ Provision of proper drainage facilities

§ Protection measures from rodents
§ Pucca internal roads
§ Plastering of inner and outer walls; and
§ Effective controls against fire.
While effective controls against fire is a parameter that has mostly been overlooked on
account of it not registering as a significant risk in the minds of the godown owners, the
other parameters have significant cost implications (especially construction of pucca internal
roads and provision of proper drainage facilities) on account of which the godown owners
have attempted to control the escalation in the cost of construction of the godowns by not
incurring these additional expenses. Agency wise responses are indicated below in Table
12.

Table 12 Commodity-Wise Utilization of Storage Space
NABARD Punjab Haryana Chattisgarh West Gujarat Assam Andhra Karnataka Maharashtra Uttar Orissa Rajasthan Madhya
Bengal Pradesh Pradesh Pradesh
Construction of 87.4 80.6 77.9 74.2 93.5 100.0 98.2 97.0 92.9 100.0 100.0 100.0 73.0
Godown on the basis
of CPWD/SPWD
specification
Proper ventilation 89.0 71.4 96.4 81.1 93.5 83.3 100.0 100.0 95.7 100.0 100.0 100.0 100.0
Well fitted doors 85.4 80.6 100.0 94.3 93.5 100.0 100.0 98.5 97.1 100.0 100.0 100.0 98.4
Windows 60.7 67.9 100.0 74.7 87.0 78.3 89.7 98.5 95.7 100.0 90.0 100.0 100.0
Waterproof (control of 74.4 83.3 96.3 79.1 80.4 100.0 84.5 100.0 85.7 100.0 100.0 100.0 98.4
moisture from floor,
alls and roof etc)
Protection from 78.0 83.9 96.3 86.8 87.0 80.0 96.6 100.0 95.7 92.9 100.0 100.0 95.2
rodents
Protection from birds 81.3 80.6 100.0 90.6 89.1 80.0 96.6 100.0 94.3 100.0 90.0 100.0 96.8
Effective fumigation 74.6 72.4 100.0 94.0 33.3 100.0 94.7 71.6 18.6 100.0 55.6 100.0 100.0
Accessibility to Road 74.5 87.1 74.1 96.2 41.3 100.0 98.3 95.5 60.0 78.6 100.0 100.0 90.3
Pucca Internal Road 73.2 77.4 65.9 94.3 66.5 82.2 87.9 89.6 68.6 50.0 70.0 100.0 54.8
Proper drainage 69.0 80.6 68.5 65.4 79.6 50.0 81.0 92.5 67.1 50.0 100.0 100.0 46.8
facility
Effective control 79.2 73.3 74.1 65.1 69.6 80.0 81.0 70.1 70.0 92.9 50.0 100.0 88.5
against fire and theft
Plastering of outer 80.8 87.1 96.3 67.9 97.8 90.0 93.1 92.5 92.9 100.0 100.0 100.0 98.4
wall
Plastering of Inner 81.3 83.9 100.0 84.9 97.8 100.0 98.3 97.0 94.3 100.0 100.0 100.0 98.4
Wall
Pucca Flooring 78.5 83.3 96.3 84.9 93.5 90.0 91.4 100.0 85.7 100.0 100.0 100.0 98.4

NCDC Punjab Haryana Chattisgarh West Gujarat Assam Andhra Karnataka Maharashtra Uttar Rajasthan Madhya
Bengal Pradesh Pradesh Pradesh
Construction of 83.3 100.0 80.0 87.5 30.0 100.0 100.0 100.0 100.0 100.0 100.0 41.4
Godown on the basis
of CPWD/SPWD
specification
Proper ve ntilation 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Well fitted doors 100.0 100.0 100.0 100.0 100.0 100.0 93.8 100.0 100.0 100.0 96.8 100.0
Windows 100.0 100.0 100.0 100.0 80.0 100.0 75.0 100.0 100.0 100.0 100.0 100.0
Waterproof (control of 94.4 100.0 100.0 87.5 100.0 100.0 93.8 100.0 100.0 100.0 96.8 100.0
moisture from floor,
alls and roof etc)
Protection from 100.0 100.0 90.0 81.3 88.9 100.0 93.8 100.0 100.0 100.0 100.0 96.6
rodents
Protection from birds 100.0 100.0 100.0 87.5 100.0 100.0 100.0 100.0 100.0 100.0 100.0 96.6
Effective fumigation 88.9 85.7 100.0 87.5 73.3 75.0 66.7 98.2 100.0 100.0
Accessibility to Road 88.9 100.0 90.0 87.5 90.0 73.3 93.8 100.0 25.0 98.2 93.5 89.7
Pucca Internal Road 83.3 100.0 70.0 75.0 90.0 73.3 75.0 100.0 75.0 75.5 83.9 82.8
Proper drainage 77.8 81.0 70.0 81.3 80.0 73.3 73.3 66.7 75.0 75.5 100.0 89.7
facility
Effective control 94.4 100.0 90.0 75.0 30.0 73.3 43.8 100.0 75.0 49.1 100.0 96.6
against fire and theft
Plastering of outer 100.0 100.0 100.0 93.8 100.0 100.0 93.8 100.0 100.0 100.0 100.0 100.0
wall
Plastering of Inner 100.0 100.0 100.0 100.0 100.0 100.0 93.8 100.0 100.0 100.0 100.0 100.0
Wall
Pucca Flooring 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0

4.9 Regional Imbalance in the construction of rural godowns
From the distribution of rural godowns across the country, it can be seen that the Northern
Region (comprising Punjab, Uttar Pradesh, Haryana, Uttaranchal, Himachal Pradesh,
Jammu & Kashmir) account for more than 44% of the total numbers and capacities of
godowns created in the country. The Western Region (comprising Maharashtra, Gujarat and
Rajasthan) and the Southern Region (comprising Andhra Pradesh, Karnataka, Kerala and
Tamil Nadu) account for approximately 16.4% of the total numbers and capacities of
godowns created whereas the Eastern Region (comprising West Bengal, Bihar, Orissa and
Chhatisgarh) account for around 11% of the total numbers and capacities of godowns
created. Madhya Pradesh (Central Region) alone accounts for about 9.7% of the godowns
created under the rural godowns scheme. In comparison, the North Eastern Region
(comprising the Seven Sisters) account for less than 1% of the total godowns created under
the scheme and the Union Territories taken together account for less than 0.02% of the total
numbers and capacities of storage spaces created under the scheme.
Even within the regions, some states like Punjab (in the Northern Region), Andhra Pradesh,
and to some extent Karnataka (in the Southern Region), Maharashtra (in the Western
Region) and Chhatisgarh and West Bengal (in the Eastern Region) have a larger share of
rural godowns than the other States in the region.
Even within the States, some districts in the states have a disproportionately large number
of godowns than the others (for example Nadia in West Bengal, Ferozepur & Bhatinda in
Punjab, Rajkot in Gujarat, Hoshangabad in Madhya Pradesh, Akola in Maharashtra, Ganjam
in Orissa, etc.) account for a bulk of the godowns created in the State.
This distribution not only reveals a regional imbalance in the distribution of rural godowns,
but also an inter-region imbalance as well as an intra-state imbalance. While obvious factors
like proximity to the major mandis in the state, differences in the quantities of foodgrain 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 ‘selling’
the concept of rural godowns to local entrepreneurs (for example in Nadia in West Bengal
and Bhatinda and Ferozepur in Punjab), publicity and awareness created about the scheme
at the local level, etc. have 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 capacity.

Again in the North Eastern Region of the country a combination of factors like harsh
topographical conditions, limited agricultural production, low economic growth rates,
negligible presence of Co-operatives, lower outreach of banking services, lack of awareness
about the scheme, insurgency, etc. have played a major role in the limiting the popularity
and therefore the off-take of the scheme.
4.10 Weak Management Information Systems
As mentioned in the earlier parts of the report, the consultants had to spend an inordinate
amount of time co-ordinating with the DMI Headquarters in Faridabad, State Offices of DMI,
NABARD Headquarters and State Offices, DoAC and NCDC to collect even the most basic
secondary information about the scheme (viz. capacity wise distribution of rural godowns in
the States, district wise distribution of godowns in the State, date of sanction of the
godowns, names and addresses of godown owners, indicative locations of the godowns,
etc.). This kind of information was not available either at the DMI headquarters or with
NABARD. The lack of such information hampered the commencement of the study.
When the information requested was finally made available to the consultants, it was either
incomplete or incomprehensible. Also different States had furnished the information in
different formats making it that much more time consuming for the consultants to
standardize the data and make it useable for the purpose of the study.
Apparently, it is the responsibility of the branch officials of the local banks that are financing
the schemes (for NABARD assisted godowns) to collect the basic information about the
entrepreneurs availing of the scheme and furnish it to the Regional offices of the Banks. The
Regional Offices of the financing banks consolidate the information coming from various
villages/districts and send the consolidated information to the Bank Headquarters. At the
Headquarter level, the information is further compiled and sent to NABARD State Offices
from where it goes to DMI. Mostly financial information is collected through this chain and
there is almost no emphasis on collecting information that could, in some way, enable
agencies like DMI and/or DoAC to understand how the scheme is performing (i.e. whether
the scheme is being able to meet its stated objectives or not and if not then what could be
done to ensure that it does). This is a major area of weakness of the scheme and needs to
be addressed urgently.

As for the godowns assisted by NCDC, the information available with the NCDC
Headquarters in Delhi about the scheme was rather limited and even in the State offices of
NCDC the state wise data on NCDC assisted godowns under the rural godowns scheme
was sketchy. This too needs to be addressed effectively in order to ensure that DoAC and
DMI have the required information to take critical management and policy decisions.
4.11 Role of NGOs
Though the guidelines to the scheme mention that NGOs can participate in the construction
of godowns, there hasn’t been a single example of NGO participation in the scheme. While it
is likely that NGOs would not construct and operate godowns under the scheme, their role in
creating awareness about the scheme at the grassroots level, enabling demand creation
and facilitating the training programs for local entrepreneurs needs to be explored
thoroughly.
4.12 Trends in Indian Agriculture
Food grain, the main commodity stored has grown at a CAGR of 1% over a period covering
1994 – 1995 to 2004 – 2005. Volumes have grown from 191.5 million tons in 1994 – 1995 to
206.39 million tons in 2004 - 2005. Production across Kharif and Rabi cycles have almost
equalized compared to previous years based on growth in Rabi cycle due to increase in rice,
cereals, pulses, maize and the principal crop, wheat.
Foodgrain Production (Million tons)
250
Million Tons
200
Kharif
150
Rabi
100
Total
50
0
1994 - 1995
1995 - 1996
1996 - 1997
1997 - 1998
1998 - 1999
1999 - 2000
2000 - 2001
2001 - 2002
2002 - 2003
2003 - 2004
2004 - 2005
Years
Figure 7 Foodgrain Production (Million tons)
Projections in production for the next 5 years sensitized to CAGR on pessimistic and
optimistic growth rates are as depicted under.

Foodgrain Production Estimates
(in million tons) @ CAGR %
0.5% 1.0% 1.5% 2.0%
2007 - 2008 209.50 212.64 215.82 219.02
2008 - 2009 210.55 214.77 219.05 223.40
2009 - 2010 211.60 216.92 222.34 227.87
2010 - 2011 212.66 219.09 225.68 232.43
2011 - 2012 213.72 221.28 229.06 237.08
Other commodities / major crops storable in the godowns include Oilseed, Spices and
Cotton which are grown dominantly in specific states. Cotton grown in Gujarat, Andhra
Pradesh, Maharashtra and Punjab is processed generally within the states before being
shipped to textile mills in state and outside. Spices cover Seed spices in Rajasthan, Madhya
Pradesh and other spices in Chattisgarh, Kerala, Karnataka, and Orissa are grown and
processed to a lesser extent in the growing states as they are consumed in direct and
processed forms before being shipped nationally in whole and processed forms. Oilseed, a
deficit crop is stored and processed in the home states mainly before being shipped in
processed forms to home and other states.
COTTON OILSEED SPICES

PRODUCTION
35
30
25
MILLION TONS
Oilseeds
20 Cotton
Spices
15
Total
10
0
1999 - 2000 - 2001 - 2002 - 2003 - 2004 -
2000 2001 2002 2003 2004 2005
YEARS
Figure 8 Cotton / Oilseed / Spices Production
Projections in production for the next 5 years sensitized to CAGR on pessimistic and
optimistic growth rates are as depicted under.

Oil Seed Cotton Spice Production Estimates (in million tons) @ CAGR %
0.5% 1.0% 1.5% 2.0%
2007 - 2008 31.11 31.42 31.74 32.05
2008 - 2009 31.27 31.74 32.21 32.69
2009 - 2010 31.43 32.06 32.70 33.34
2010 - 2011 31.58 32.38 33.19 34.01
2011 - 2012 31.74 32.70 33.68 34.69
Other significant products storable include Non Timber Forest Produce including Tendu leaf,
Sal Seed, Karanj Seed, Niger Seed, broom grass and others from the major producing
states including the North East. Procurement and storage are done through a combination
of TRIFED, State specific Forest Departments & Corporations, Government agencies and
private traders.
High value specialty crops include dried mushroom products in the states of Himachal
Pradesh and Jammu & Kashmir. Products include various types of mushroom including the
prized morels. In Jammu & Kashmir, a significant other product is Walnuts which is unique
to the state again with a small farmer base which can be supported.
In the Southern part of the country, coffee and cocoa, both high value crops, focused within
area clusters in Kerala and Karnataka, albeit with a small farmer production base which can
be developed to use the scheme.
Storage includes covered and CAP storages as detailed under on the basis of data made
available for FCI, CWC, SWC and DMI assisted godowns.
Storage Capacity (in million tons)

FCI CWC / SWC Gramin Total
Bhandaran
Yojana Scheme
2000 – 2001 NA 22.11 - -
2001 – 2002 35.65 25.18 - -
2002 – 2003 30.38 29.72 - -
2003 – 2004 25.44 29.64 10.81 * 65.89
2004 – 2005 26.12 29.64 14.18 * 69.94
* Sanctioned
Storage needs have been worked out on a basis of approximately 70% of annual production
to balance Kharif and Rabi cycles to consumption and arrive at an informed estimate of
likely gaps on the basis of capacity available at this stage.

Projected Storage Gap Estimates (in million tons) @ CAGR %
[Foodgrains, Cotton, Oilseed, Spices]
0.5% 1.0% 1.5% 2.0%
2007 - 2008 98.48 100.90 103.35 105.80
2008 - 2009 99.33 102.61 105.94 109.32
2009 - 2010 100.18 104.34 108.58 113.44
2010 - 2011 101.02 106.08 111.26 116.56
2011 - 2012 101.88 107.84 113.97 120.44
Conservative growth estimates in agricultural production could mean a 98 million ton gap by
2007 – 2008 between production and storage rising to just over a 100 million tons by 2011 –
2012. As per the CAGR evidenced over the last decade of about 1%, gap in 2007 – 2008
will be 100 million tons rising to 107 million tons by 2011 – 2012. Should India experience
higher production either on account of bumper crop, area under production or yield rises, the
gap can be depicted by higher growth estimates.
Storage Gap ( CAGR )
130
120
110
100 2.00%
1.50%
1.00%
MillionTons
90
0.50%
80
70
60
50
40
2007 - 2008 2008 - 2009 2009 - 2010 2010 - 2011 2011 - 2012
Figure 9 Storage Gap (CAGR)
Recent trends in the Agricultural Sector that will impact the agricultural production and
storage industry include,
v Warehouse Receipt Trading Systems through establishment of National

Commodity Exchanges like National Commodities & Derivatives Exchange
Limited [NCDEX] & Multi Commodity Exchange of India Limited [MCX]
- National Commodity & Derivatives Exchange Limited (NCDEX) is a professionally

managed online multi commodity exchange promoted by ICICI Bank Limited (ICICI

Bank), Life Insurance Corporation of India (LIC), National Bank for Agriculture and
Rural Development (NABARD) and National Stock Exchange of India Limited (NSE),
Punjab National Bank (PNB), CRISIL Limited (formerly the Credit Rating Information
Services of India Limited), Indian Farmers Fertiliser Cooperative Limited
(IFFCO) and Canara Bank.
- NCDEX currently facilitates trading of 44 commodities - Castor Seed, Chana, Chili,
Coffee - Arabica, Coffee - Robusta, Common Parboiled Rice, Common Raw Rice,
Cotton Seed Oilcake, Crude Palm Oil, Expeller Mustard Oil, Groundnut (in shell),
Groundnut Expeller Oil, Grade A Parboiled Rice, Grade A Raw Rice, Guar gum,
Guar Seeds, Gur, Jeera, Jute sacking bags, Indian 28 mm Cotton , Indian 31 mm
Cotton , Lemon Tur, Maharashtra Lal Tur, Masoor Grain Bold, Medium Staple
Cotton, Mentha Oil , Mulberry Green Cocoons , Mulberry Raw Silk , Rapeseed -
Mustard Seed, Pepper, Raw Jute, RBD Palmolein, Refined Soy Oil , Rubber,
Sesame Seeds, Soy Bean, Sugar, Turmeric, Urad (Black Matpe), V-797 Kapas,
Wheat, Yellow Peas, Yellow Red Maize, Yellow Soybean Meal.
- Multi Commodity Exchange of India Limited MCX an independent and de-mutulised
multi commodity exchange works on facilitating online trading, clearing and
settlement operations for commodity futures markets across the country. Key
shareholders of MCX are Financial Technologies (India) Ltd., State Bank of India,
NABARD, NSE, HDFC Bank, State Bank of Indore, State Bank of Hyderabad, State
Bank of Saurashtra, SBI Life Insurance Co. Ltd., Union Bank of India, Bank Of India,
Bank Of Baroda, Canara Bank, Corporation Bank.
- NBHC is an end-to-end solution provider in warehousing and bulk handling of agri-
commodities dedicated to MCX members. Operations include storing goods at and
effecting delivery through Exchange designated warehouses. NBHC aims to manage
a chain of accredited warehouses across India. Other than promoting a franchisee
business model for setting up warehouses, the Company also offers the following
services to its direct depositors, like, international quality systems for storage,
preservation and protection, grading and assaying, standard quality purchases,
offloading and disposal services, demating of warehouse receipts for expedient
transfer of ownership, etc. NBHC's Accredited Warehouses across India function
under stringent International Quality Assurance Procedures, Structural Standards
Policy and Operational Practices. The warehouse accreditation process includes
Operational, Technical, and Financial parameters.
- With respect to the godowns to be franchised, NBHC examines godown design and
installations for pest / contamination risks, stock protection and fire fighting systems,
ventilation systems, IT enabled warehouse management systems, storage and
retrieval – handling systems, receiving and weighing systems and pest control apart
from the location, capacity and strategic importance for crop storage.
- As spelt out above, rural godowns construction and facility design play a key role for
accreditation to Warehouse Receipts system as operates in the country today and to
avail of attendant services for availing of pledge loans and commodity trading.
- As it stands, NBHC has franchises country-wide covering a gamut of private, SWC
and CWC warehouses. The general scope of migrating to a WRS will depend on the
godown adhering to technology and design basis detailed above apart from strategic
trading and commercial viewpoints for hiring the godown.
v Corporate – Contract Farming Frameworks & E-Procurement Initiatives
- Key initiatives have been undertaken by leading Indian and MNC corporate houses
with the active support of state governments to set up integrated supply chains for
agricultural products. Procurement models over the last 5 years include the multi role
E-Choupals of ITC Limited, Shriram Groups Hariyali, Mahindra & Mahindra’s Shubh
Labh and the Contract Models of Rallis India, PepsiCo, Escorts Limited programs
which conduct custom production, post harvest and procurement programs in the
agriculturally dominant states. Leading processing houses like Satnam Overseas,
KRBL, and United Breweries have also started direct programs for meeting their raw
material needs, to have control over the supply chain and gain pricing and access to
farmers.
- To facilitate direct procurement, state governments have stepped in with amending
APMC Acts and exempting procurement related taxes and duties. The corporate /
contract farming models work on a specific crop program integrating farmers,
providing standardised inputs and technical support and perform procurement
functions.
- The implications for storage needs are clearly in the fact that these companies will
need larger scale storage for both input and output, which would have facilities for
post harvest operations, quality and standardisation. Typically, models are worked
out on a basis of procurement and technical centers and the need for quality
godowns is clear.

v Technology Initiatives - Bulk Handling Storage & Transport Systems
- India’s first large scale [1.8 million ton] bulk grain handling silo storage and rail
transport infrastructure is being set up by Adani Group on the basis of 100%
dedicated use for 1st 10 years and 75% for the next 20 years. So far, experimental
efforts were made for silo storage of grain. This marks a departure towards two
significant paths, [a] introducing world class systems for handling, storage and rail
transport to offer higher quality and reduce post harvest losses and [b] development
of large scale integrated facilities with private sector development.
- The ramifications on existing storage are clear that Central Pool stocks may migrate
to such networks given the past record of losses on storage and subsidy quantum’s
using traditional systems of storage. It is also imperative to improve design and
configuration of godowns beyond basic storage for warehouse safety, quality
retention, stock management and overall yield given the needs of both the Central
Pool and the growing trend of well equipped warehouses accredited to Commodity
Exchanges.

5 SUGGESTIONS & RECOMMENDATIONS
From the findings of the evaluation study, it can be seen that the rural godowns scheme has
been generally successful and has been able to meet many of its objectives. However, there
are certain key issues that need to be considered and/or strengthened. These are:
§ Expanding the scheme beyond 2006-2007

§ MIS
§ Training and awareness; and
§ Choice in the nature of loan repayment
The subsequent sections of the report outline the nature and scope of improvements in the
scheme.
5.1 Expansion of the Scheme beyond 2006-2007
The Central Sector Scheme for Rural Godowns has met the primary objectives well. The
recent trends in corporatisation of Agribusiness, development of national level commodity
markets linked to WRS System & agricultural marketing revisions as well as the private
sector initiatives for storage development will impact scope for need and quality of storage
space.
Projected Storage Gap Estimates (in million tons) @ CAGR %
[Foodgrains, Cotton, Oilseed, Spices]
0.5% 1.0% 1.5% 2.0%
2007 - 2008 98.48 100.90 103.35 105.80
2008 - 2009 99.33 102.61 105.94 109.32
2009 - 2010 100.18 104.34 108.58 113.44
2010 - 2011 101.02 106.08 111.26 116.56
2011 - 2012 101.88 107.84 113.97 120.44
Conservative growth estimates in agricultural production could mean a 98 million ton gap by
2007 – 2008 between production and storage rising to just over a 100 million tons by 2011 –
2012. As per the CAGR evidenced over the last decade of about 1%, gap in 2007 – 2008
will be 100 million tons rising to 107 million tons by 2011 – 2012. Should India experience
higher production either on account of bumper crop, area under production or yield rises, the
gap can be depicted by higher growth estimates.
Prima facie, the scheme therefore has adequate scope to be extended to meet multi level
needs of small farmers, medium scale farmers, large farmers as well as co-operatives and
private sector players in view of the projected storage gaps.
§ As such, it is recommended that DMI follow an umbrella approach to meet the storage
needs of all types of godown developers (state corporations, co-operatives, private
traders and farmers) without imposing any caps on the capacity that a state can develop

under the scheme and to follow promotional thrust for the states (outside of 99%
concentrated in 15 states) which have availed low assistance
§ It is also recommended that the scheme be appropriately modified to support both
developments of WRS compatible models as well as facilitate upgradation of existing
godowns to WRS levels
§ It is also further recommended that the scheme consider revising cost, design and other
specifications for the godowns and incorporate these elements in its future plans.
In doing so, it may be worthwhile to keep in mind that the cost of construction has risen
based on rising prices of input materials. As such, it is suggested that DMI develop
benchmark cost estimates across the spectrum of godowns to cover crop – area - quality
aspects, infrastructure and facility standards and basic qualities needed for warehouse
accreditation under NCDEX, MCX and specialised corporations like National Bulk
Handling Corporation [a subsidiary of MCX]. Alongwith the cost estimates, DMI may
consider developing a basis for periodic evaluation of rates of construction.
§ DMI should concentrate on a mixed strategy of encouraging farmers to participate in the

scheme, involve promising area - crop specific state with promotions and enable the
development of the listed initiatives above through the scheme.
In the event that DoAC decides to carry the scheme into the next Five Year Plan, it is
imperative that improvements in MIS, enhancing the scope of training and awareness
creation and changing the nature of the subsidy release mechanism be brought about.
Recommendations on these issues are highlighted in the subsequent sections.
5.2 Improved MIS
During the course of the evaluations study, it was found that there was no centralized
database from which one could get an overall picture about the scheme. So much so that
even names of the godowns owners, addresses of the godowns, capacities created, profile
of the owners, etc. were not readily available. Moreover, every state had a different format
for collecting and disseminating even this basic level of data making it extremely difficult for
the managers of the scheme to get an overall picture to take management and/or policy
decisions.
To overcome this weakness, it is strongly recommended that a robust MIS be created and
implemented which could make such information easily available on demand.

As such, at the tim e when an entrepreneur approaches the financing bank for assistance in
constructing a godown, along with the project report, necessary land documents, etc.
information on the profile of the entrepreneur as indicated in Annexure 8 also needs to be
collected in quadruplet.
While the local branch of the financing bank would need to retain one copy of the
information collected in the format suggested in Annexure 8 above and the other mandatory
documents (viz. project report, copies of land documents, etc.), a copy of the information
collected through Annexure 8 needs to be forwarded to the Bank’s Regional Office /
Headquarters, one to the local NABARD office and one copy to DMI’s regional office.
The DMI regional offices need to compile the information collected through Annexure 8 on
easily retrievable database management software (for example MS Excel or MS Access) in
standardized formats and send soft copies of this information to the DMI Headquarters in
Faridabad on a quarterly basis.
Establishing protocols for the timely collection and dissemination of information, adhering to
the same, standardizing the formats in which the collected information is stored and
ensuring uniformity in the use of a standard database management software in which the
collected information is stored will, over a period of time, help DMI in improving the
management of the rural godowns scheme and in ensuring far better monitoring and
evaluation mechanisms.
5.3 Expanding the Scope for Training & Awareness
From the understanding of NIAM’s programs and work done and the detailed field survey, it
was found that the local financing banks had played a major role in ‘selling’ the concept of
rural godowns to the local entrepreneurs. Awareness creation and publicity of the scheme
was very limited at the grassroots level and restricted only a few states and programs where
NIAM conducted which may be a major reason behind farmers, especially small farmers not
knowing of the scheme as much as was envisaged.
Hence in order to popularize the scheme at the grass roots level and improve the off take of
the scheme, the following steps are recommended:

5.3.1 Involving NGOs in Awareness Creation and Training
Local NGOs, given their presence in the villages and their on-going work with rural
communities at the village level, can play a major role in creating awareness about the
scheme and then providing training to small farmers in scientific aspects of storage.
As such, DMI’s regional offices could create a database of all NGOs working in the districts
of their respective states. On creation of such a database, the regional offices could select
an appropriate number of NGOs that work with farmers in the field of agriculture and rural
development. Representatives of these NGOs should then be invited for an
orientation/awareness creation workshop about the scheme and be invited to work in
partnership with the Government to popularize the scheme in the areas in which they work.
It is possible that only a few of the NGOs invited for the orientation/awareness creation
workshop would attend the workshop, and of these, a smaller number may wish to
undertake the task of popularizing the scheme. However, the NGOs that wish to work with
DMI could then be given a more thorough orientation of the mechanisms envisaged by the
DMI to manage the scheme and representatives of these NGOs could be sent to NIAM for a
more rigorous training.
On completing the training and coming back to the field, the NGOs would be expected to
evolve their own mechanisms to create awareness about the scheme amongst the rural
communities; train interested farmers and local entrepreneurs in making project reports and
meeting the other requirements of the scheme, assist them in developing proposals and
project reports and pre-screen applications from the interested parties and assist the
farmers in co-ordinating with the local financing banks and DMI.
After the sanction of the project to the entrepreneurs availing of the scheme through the
NGOs, the NGOs would be required to train these entrepreneurs in scientific aspects of
storage and ensure that the entrepreneurs construct the godowns as per the mandatory
specifications and that storage takes place in the godowns along the same lines. On
completion of the godowns and release of the final installment, a certain proportion of the
project cost should be made available to the NGOs as fees/commission for their efforts
towards popularizing the scheme.

5.3.2 Suggested Training Modules
The farmers/local entrepreneurs ought to be provided training on issues such as enhancing

the viability of the project and highlighting areas where the beneficiaries can maximize their
incomes not only from enhanced capacity utilization, but also from a smart play in the
marketplace to get higher remuneration for the produce stored in the godowns.
Since a majority of the godown owners don’t have high levels of educational qualifications, it
is necessary that training inputs be provided to develop entrepreneurial skills. As such, the
training programme must have a basic capsule on development of entrepreneurial skills and
understanding business risks. This module needs to be conducted right after the
beneficiaries’ application for the construction of the godown has been approved. It is
expected that with such a training input, the beneficiaries would follow the basic scientific
management approaches in managing their godown operations. In addition, the training
module should also cover issues such as:
§ Basic management of the godown, repair and maintenance

§ Account keeping,
§ Business development: capacity utilization through multi-product storage
A second training module on quality management also needs to be imparted to the

entrepreneurs to help the entrepreneur to maintain the quality of stored produce or
maximize benefit from storage. This module could include, but not be restricted to issues
such as:
§ Crop/product specific storage practices

§ Grading and standardization
In addition, a third training module may be considered to enable the entrepreneurs to take
advantage of, and add value to the rural economy through emerging marketing systems like
Warehouse Receipt System and trading through commodity exchanges. This training
should be given jointly with the commodity exchanges so that the entrepreneurs are trained
to meet the criteria and requirements of these exchanges.
5.3.3 Training Institutions:
Keeping in view the dispersion of the scheme in terms of geographical spread and extensive
coverage of agro climatic zones, it is suggested that NIAM be given the responsibility to
develop Master Training Modules which can thereafter be implemented using specialised
trainers locally, where NGO’s, State Agriculture Departments and Co-operative Training

Institutes may be the local resource to fully utilize the scheme as per local area conditions
matched to the quality standards of the Master Training Program.
For NCDEX / MCX and their warehousing counterparts, it is suggested that the training for
upgradation of potential godowns be carried out in partnership with the Exchanges and their
technical counterparts.
5.3.4 Awareness creation
In addition to newspaper advertisements, NIAM could consider using radio spots in the local
radio channels (All India Radio, etc.), seminars, focused workshops in potential areas, local
cinema halls (before the beginning of movies and at the ‘interval’ period), creative posters
and pamphlets, etc. in popularizing the scheme amongst the rural communities.
Awareness creation may now be considered on a state potential basis where DMI estimates
both a higher need for storage and availability of scheme for the state. So far, the
dominance of the scheme has existed in food grain production belts where the state limits
on scheme support are being approached. For other areas with non foodgrain production
capability, wherever possible, joint awareness programs can be conducted alongwith state
agencies, specialised agencies of both the Central and State governments. For instance, for
states like Andhra Pradesh, Rajasthan, Madhya Pradesh, and Kerala which dominate spice
production; efforts may be made alongwith state government departments and agencies as
well as the Spice Board. Similarly, for Coffee in Karnataka, Kerala and Tamil Nadu, with the
Coffee Board and for NTFP with the various specialised agencies like TRIFED and others.
It may also be considered useful to discuss with the non FCI agencies mandated with
maintaining MSP and commodity procurement functions to promote the scheme, for
instance agencies like NAFED. For the co-operative sector, the major succes s in
agribusiness have been the various milk federations structured to link to villages and small
farmers. NIAM may consider developing special programs for the co-operatives in order to
develop storage either as co-operative owned godowns or as a promotional path for
developing small farmer godowns along the milk chain.
5.3.5 Meetings with Local Community Leaders / Ongoing Initiatives
It is also recommended that the DMI officials, on their Joint Inspection/other visits to the
villages, make a conscious effort to seek out and meet the village sarpanch, and other
village elders to create awareness about the scheme. In addition, DMI could also orient
Agriculture Extension officers and the Block Development Officers in the States and hand
over copies of the posters/pamphlets for them to distribute during their visits to the villages.
States have ongoing programs for farmers development covering various links from
production, post harvest, marketing and processing which are conducted by Central, State
and even internationally funded efforts. DMI can interface with the State agencies to
evaluate the scope for usage of the scheme within the programs and thereafter lead the
initiative to utilize the scheme.
It is envisaged that a combination of all these efforts would have a significantly positive
impact on popularizing the scheme and encourage larger numbers of farmers and other
entrepreneurs to avail of the scheme.


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EVALUATION OF

CENTRAL SECTOR SCHEME OF

Submitted to: Submitted by:

Department of Agriculture & Co-operation Global Agri System Pvt. Ltd.

Submitted to: Submitted by:

Department of Agriculture & Co-operation Global Agri System Pvt. Ltd.

Evaluation of Central Sector Scheme of i Global AgriSystem Private Limited

TABLE 1 FIELD SURVEY SCHEDULE..................................................................................................................................... 11

FIGURE 1 STATE WISE DISTRIBUTION OF STORAGE CAPACITY......................................................................................... 14

Evaluation of Central Sector Scheme of ii Global AgriSystem Private Limited

Department of Agriculture & Co-operation commissioned Global AgriSystem Private

REGIONAL DISTRIBUTION OF GODOWNS :

15 states, namely, Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra, Gujarat,

Evaluation of Central Sector Scheme of 1 Global AgriSystem Private Limited

§ Scheme usage has been driven by a combination of the awareness programs

Evaluation of Central Sector Scheme of 2 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 4 Global AgriSystem Private Limited

§ To assess the utility of the scheme in terms of its objectives.

The remaining part of the report is structured as follows:

Section 2 : Describes the methodology followed by the Consultants to meet the

Evaluation of Central Sector Scheme of 6 Global AgriSystem Private Limited

§ To introduce the members of the consulting team to the DMI representatives,

Evaluation of Central Sector Scheme of 7 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 8 Global AgriSystem Private Limited

Task 4 : Meeting with DoAC Officials in Krishi Bhavan, New Delhi

Task 5 : Pilot Testing the Questionnaire Schedules in Punjab

Evaluation of Central Sector Scheme of 10 Global AgriSystem Private Limited

Task 7 : Primary Data Collection Exercise

The actual fieldwork schedule is contained in Table 1 below:

Table 1 Field Survey Schedule

Evaluation of Central Sector Scheme of 11 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 12 Global AgriSystem Private Limited

4.1 Distribution of Rural Godowns

As on 31.03.2005, the state-wise distribution of Rural Godowns created by DMI is given in

It can be seen from Table 2 that 15 states, namely:

Punjab, 24.67% Punjab

Madhya Pradesh, 9.37%

Figure 1 State wise distribution of storage capacity

Assam, 0.56% Tamil Nadu, 0.51%

Haryana, 3.45% Karnataka

Madhya Pradesh, 9.66%

Maharashtra, 9.49% Godowns Population

Figure 2 State wise distribution of godowns population

Evaluation of Central Sector Scheme of 14 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 15 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 16 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 17 Global AgriSystem Private Limited

State 5000MT and % 1000 to % Less than % Total

4.1.1 Basis of Findings

4.1.1.1 Selection of NABARD Assisted Godowns for the Evaluation Study

4.1.1.2 Selection of NCDC Assisted Godowns for the Evaluation Study

Evaluation of Central Sector Scheme of 19 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 21 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 22 Global AgriSystem Private Limited

§ Creation of scientific storage capacity

§ Promotion of grading, standardization and quality control of agricultural produce to

Evaluation of Central Sector Scheme of 23 Global AgriSystem Private Limited

States Reduction in the Introduction of a national Encouraging private and co-

Evaluation of Central Sector Scheme of 24 Global AgriSystem Private Limited

States Renovation and Creation of additional Promotion of grading,

Evaluation of Central Sector Scheme of 25 Global AgriSystem Private Limited

Evaluation of Central Sector Scheme of 26 Global AgriSystem Private Limited

4.3 Profile of Godown Owners